13 January 2021

The New York Times: “Lost Passwords Lock Millionaires out of their Bitcoin Fortunes”

Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis. Wallet Recovery Services, a business that helps find lost digital keys, said it had gotten 70 requests a day from people who wanted help recovering their riches, three times the number of a month ago.

Through the years I would say I have spent hundreds of hours trying to get back into these wallets, said Brad Yasar, an entrepreneur in Los Angeles who has a few desktop computers that contain thousands of Bitcoin he created, or mined, during the early days of the technology. While those Bitcoin are now worth hundreds of millions of dollars, he lost his passwords many years ago and has put the hard drives containing them in vacuum-sealed bags, out of sight.

I don’t want to be reminded every day that what I have now is a fraction of what I could have that I lost, he said.

Nathaniel Popper

The future of money, indeed… If you lose the password and with it access to your Bitcoin wallet, does the money still exist? If all your assets are invested in Bitcoin, but you cannot spend your fortune, are you actually wealthy?

Mr. Thomas, the programmer, said he was drawn to Bitcoin partly because it was outside the control of a country or company. In 2011, when he was living in Switzerland, he was given the 7,002 Bitcoin by an early Bitcoin fanatic as a reward for making an animated video, “What is Bitcoin?”, which introduced many people to the technology.

That year, he lost the digital keys to the wallet holding the Bitcoin. Since then, as Bitcoin’s value has soared and fallen and he could not get his hands on the money, Mr. Thomas has soured on the idea that people should be their own bank and hold their own money.

This whole idea of being your own bank — let me put it this way: Do you make your own shoes? he said. The reason we have banks is that we don’t want to deal with all those things that banks do.

Bitcoin’s original raison d’être was distrust of government and financial institutions. Looks like people are starting to realize that acting as their own bank is not as straightforward as it may seem. For most if us in fact it is more trouble than it’s worth.

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