Markets

Lost passwords lock millionaires out of their Bitcoin fortunes

Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million.

The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7,002 bitcoins. While the price of Bitcoin dropped sharply on Monday, it is still up more than 50 percent from just a month ago when it passed its previous all-time high of around $20,000.

The problem is that Thomas years ago lost the paper where he wrote down the password for his IronKey, which gives users 10 guesses before it seizes up and encrypts its contents forever. He has since tried eight of his most commonly used password formulations — to no avail.

“I would just lay in bed and think about it,” Thomas said. “Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”

Bitcoin, which has been on an extraordinary and volatile eight-month run, has made a lot of its holders very rich in a short period of time, even as the coronavirus pandemic has ravaged the world economy.

By Nathaniel Popper

c.2021 The New York Times Company

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