losses bitcoin

Man loses Bitcoin password with over Rs 1,800 crore in cryptocurrency

NEWS:-

A German programmer based in San Francisco has lost his Bitcoin password which has over Rs 1,800 crore in cryptocurrency.

Stefan Thomas, a German programmer based in San Francisco, has lost his Bitcoin password. As per a report in the New York Times, Thomas was given 7,002 Loses Bitcoins back in 2011 which is now worth $245 million, or almost Rs 1,800 crore. However, his account is about to lose all his Bitcoins as he has exhausted eight of his ten attempts to get the correct password.

As per a report in News18, Thomas stored all of his Bitcoin keys in a tiny, encrypted hard drive called IronKey the digital equivalent of the medieval cryptex. “However, there is a catch to storing things in IronKey anyone in possession of the drive will get 10 attempts to unlock it by entering the right password, failing which the drive will encrypt itself forever, no second chances ever,” said the report.

The ordeal faced by Thomas exposes one of the biggest downfalls of Bitcoin. Since Bitcoin operates on the laws of cryptocurrency which essentially makes sure that the cryptographic key, which serves as the identifier of a cryptocurrency (in this case, a Bitcoin), is completely unique, and only the one in possession will ever know it.

“There are no organizations or a centralized body that has the power, or a master key, to access all or any of this data unless the key is specifically shared with them. Hence, if you forget the password to your crypto wallet, there is no company or helpline that can help reset it or give you back access to it the way a standard financial institution or bank would,” the report said.

The volatile nature of Bitcoin has also come to light through Thomas’ incident. “Unlike equities or any commodity for that matter, Bitcoin is not attached to any material of physical value, as a result of which the transactions that fluctuate its valuation cannot be controlled by any regulatory body. It is also theoretically possible for dark web bodies with possession of significant amounts of Bitcoin to manipulate its value without leaving behind any traces to track, or any law to hold them accountable for,” said the report.

The Times report claims that as much as 20 percent of all Bitcoin, amounting to as much as $130 billion or Rs 9.5 lakh crore in ‘real’ money, is stuck in such crypto wallets with forgotten passwords that may never, ever be found or unlocked again. The amount of money stuck in this form is titanic more than the GDP of many nations around the world, even. Of this, Thomas’s ordeal represents 0.2 percent of the total amount estimated to be stuck behind a forgotten password.

The article first appeared on the Indiatoday.

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