The German-American programmer revealed that he had 7002 Bitcoin (BTC) safely stored in a digital wallet but had forgotten the password. His BTC money will be locked up forever if he forgets the code to open the hard drive on which his cryptocurrency treasure is stored.
Thomas claimed that he had previously written down the password on a piece of paper, but that he had misplaced it. With Bitcoin’s current market pricing, the Bitcoins (BTC) safely held on IronKey hard drives would be worth more than $240 million.
Thomas told the New York Times that he only had two more guesses before his cryptocurrency riches was permanently encrypted and the contents became unrecoverable. When the former Ripple Chief Technology Officer forgot his password, he had already used up eight of the ten tries that IronKey allotted to its customers.
According to Thomas:
“I would just lay in bed and think about it. Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”
It’s not uncommon for people to lose their keys, as Thomas did. According to bitcoin data analytics firm Chainalysis, almost 20% of the presently circulating 18.5 million Bitcoin is lost for good, held on stranded wallets to which owners have forgotten the private key and thus are unable to access.
This demonstrates that managing your own wealth and eliminating the need for a third-party intermediary comes at a cost with Bitcoin – technicalities and mishaps that a banking institution would normally oversee and account for, such as a way to recover one’s password, are not available with digital assets like Bitcoin.
After all, Satoshi Nakamoto’s Bitcoin is based on the concept that no central bank or government can regulate it. By simply opening a digital bank account, everyone in the world can possess Bitcoin, allowing for financial inclusion. What happens, though, when people find it impossible to be their own bank? This was confirmed by Thomas, who stated:
“This whole idea of being your own bank – let me put it this way: Do you make your own shoes? The reason we have banks is that we don’t want to deal with all those things that banks do.”
The fear of losing one’s personal digital keys has deterred major investors from investing in Bitcoin. Peter Schiff, a well-known gold bull, is among those who have sworn off Bitcoin after losing access to his wallet years ago.