The Million Dollar Password
Bitcoin and cryptocurrency have been hot topics of discussion these days. Viewed as a haven against inflation, investors are flocking to cryptocurrencies like Bitcoin. But unlike fiat currencies, investors can’t just store millions of dollars’ worth of cryptocurrency in a bank account.
Many people use something called a digital wallet to hold their cryptocurrency. A digital wallet is essentially a software program one can use to send and receive digital currency and keep track of their balance. To unlock their digital wallets, investors need a private key, which is accessed with a password. But what happens if someone forgets the password to their private key?
According to the cryptocurrency data firm, Chainalysis, of the 18.5 million existing Bitcoin, around 20%, worth about $140 billion today, appears to be in lost or abandoned wallets. Can you imagine how frustrated you would be if you could not cash in on your Bitcoin fortune because you forgot your password?
In a recent article published by the New York Times, Stefan Thomas, a programmer living in San Francisco, has only two guesses left to access his digital wallet worth about $220 million. Stefan forgot his private key password and is now locked out of his fortune of 7,002 Bitcoin. Bitcoin has skyrocketed over 300% in the past 12 months, making many of its investors rich in a short period.
What would you do if you were in Stefan’s situation?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.