Last week, programmer stefan thomas revealed that he has only two attempts left to unlock a cryptocurrency wallet (opens in new tab) containing hundreds of millions of dollars worth of bitcoins (opens in new tab).
In an interview with the new york times (opens in a new tab), he explained that the private key of a wallet containing 7,000 units of bitcoin is stranded on an encrypted ironkey usb drive (opens in a new tab) , for which you have forgot the password.
Reading: Bitcoin iron key
After a bull run (or period of growth) dating back to November, bitcoin is currently hovering around a valuation of around $37,500, valuing inaccessible holdings at approximately $260 million.
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The manufacturer of the ironkey drive, Kingston Technology, has since confirmed that it is powerless to help Thomas recover his private key, even if he wanted to.
“kingston’s full line of encrypted usb flash drives, including the military-grade ironkey line with additional tamper protections, allow a maximum of ten password attempts, after which the encryption key is erased and therefore Therefore, the data cannot be recovered. a company spokesperson told techradar pro.
“The drive then forces a reformat and requires a new password to start over. this policy helps thwart possible brute force attacks. kingston has no way of recovering the data, as designed.”
bitcoin wallet tragedy
according to kingston, this is not the first time a customer has been blocked, or nearly blocked, from their encrypted drive. but there is no secret backdoor built into the devices, to prevent the opportunity for abuse by hackers, and there are no other alternatives.
“There is no backup password or alternative method, apart from the original password that the user set to recover the data. the default setting is ten attempts when units leave our factory,” the firm explained.
In some cases, customers are demanding an even stricter approach to protecting data stored on their encrypted drives.
“We have high-end corporate, government, and military clients requesting an even lower number [of attempts] as their data protection needs are highly sensitive,” the spokesperson added.
In short, all Kingston can do to help customers avoid data loss is to advise them to “check for keyboard malfunction” before entering a password and to recommend “that all data on USB storage also be backed up elsewhere to protect against loss, theft, or damage.”
While his situation is certainly not enviable, Thomas is not the first (and probably won’t be the last) to lose a large sum in bitcoin.
In 2013, it emerged that a UK IT technician had accidentally dropped a hard drive (opens in a new tab) containing 7,500 bitcoins, believed to be buried in a nearby landfill.
Hundreds of millions of dollars worth of bitcoin were also lost to the quadriga cryptocurrency exchange after the untimely death of its CEO, Gerald cotten, who was the only person with access to the wallets containing the funds.
The reason so much bitcoin is lost is that the network is not overseen by a single entity, so there is no security mechanism to prevent loss. decentralization is part of what draws many people to crypto, but it also involves playing with fire to some degree.
If crypto owners choose to keep their holdings in a non-custodial wallet, outside of an exchange (opens in a new tab), forgetting or losing the private key becomes a fatal mistake.
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