How much can a lost password cost you? In the case of Stefan Thomas, about $220 million. As reported by the New York Times, Mr. Thomas has 7,002 Bitcoin securely tucked away in a digital wallet — so securely that even he can’t access it, because he lost the password to the wallet years ago.
He’s tried to access the wallet using eight of his most commonly used passwords. None of them worked, and he can’t simply keep guessing. This particular digital wallet gives its users only 10 guesses before it locks up, forever encrypting its contents.
“I would just lay in bed and think about it,” Mr. Thomas told the New York Times. “Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”
Mr. Thomas is far from alone. Cryptocurrency data firm Chainalysis estimates that about 20% of the Bitcoin in existence, totalling approximately $140 billion, are in lost or otherwise inaccessible digital wallets. Wallet Recovery Services, which helps people track down lost digital keys, told the Times that about 70 potential customers contact them daily.
The Perils of Being Your Own “Bank”
In case this is all Greek to you, here’s a brief primer. A cryptocurrency is a public-private key pair and a public ledger of all transactions called a blockchain. The public key is tantamount to a cryptocurrency “address,” and owners freely share their public keys to facilitate transactions to their digital wallets. Conversely, private keys are used to cryptographically sign messages to prove that the user owns any balance that may be stored at a specific public address. Without the private key, users cannot access their digital wallets or initiate any transactions.
You can think of a public key as being your street address, while the private key unlocks your house.
This is where things get hairy. Private keys can take a few different forms, but they are for example comprised of a random series of 51 alphanumeric characters. This is far too long and complex for most people to remember, so many people do what Mr. Thomas did; they write their private keys down on slips of paper. Unfortunately, if they lose that slip of paper, they can no longer access their digital wallet, even if it contains a fortune.
This is one of the many differences between keeping your money in cryptocurrency and keeping it in a bank. A bank has failsafes. If you lose your debit card or even misplace your account number, you can visit a bank branch, present proof of identity, and get back into your account. With Bitcoin and other cryptocurrencies, you’re essentially your own “bank.” There are no failsafes — unless you set them up.
Get Keeper & don't stress about forgetting the password to your digital wallet.
Keeper Makes Being Your Own “Bank” Safer, and It Secures the Rest of Your Digital Life, Too
Keeper’s password manager is the failsafe you need to ensure that a lost password never stands in between you and your digital currency stash. Keeper uses zero-knowledge AES 256-bit encryption; the keys used to encrypt and decrypt the passwords stored in your Keeper vault are derived on the device level. Since the keys are derived on and never leave your device, nobody has the ability to decrypt any data you store within your Keeper digital vault — not even Keeper employees!
Keeper allows you to securely store your data — all of it, not just the private keys for your crypto — with backup mechanisms to access it should you forget your password. You can use Keeper to store every account, every login, every seemingly unimportant file for safe access later. Want a backup image of your passport, your driver license or other ID, or your will? You can stash them all in Keeper so that they’re always accessible when you need them.
Here are just some of the ways that Keeper can help you secure and organize your digital life:
- Automatically generate unique, high-strength, random passwords for all your sites and apps, and store them in a personal, encrypted digital vault. You’ll never lose or forget another password again.
- Store multi-factor authentication (2FA) codes and make 2FA verification a breeze.
- Put more than just passwords in your encrypted digital vault; Keeper can protect your sensitive files, documents, photos, and videos, too!
- Securely scan and store your payment cards for faster checkout on websites and apps.
- Works on every mobile device and computer that you use and syncs instantly.
- Supports all two-factor authentication methods, including Windows Hello, fingerprint ID, SMS, and security devices such as YubiKey.
- Protect the entire family with Keeper Family! Secure and easily share passwords, insurance forms, medical records, estate planning documents, tax documents, photos, videos, and more.
Many early adopters of Bitcoin and other cryptocurrencies never expected their crypto’s value to surge into the stratosphere. They mined a few coins, or a friend gave them a few coins, and they forgot all about them. At the time, the coins were only worth a couple of dollars, so they didn’t think it was important to hold onto their private keys. Now that a single Bitcoin is worth nearly $45,000 as of this writing, it’s hugely important. This is true of many different kinds of data.