Lost Passwords Lock Would-Be Millionaires Out of Their Bitcoin Fortunes

Nathaniel Popper, reporting for The New York Times:

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 Bitcoin. 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 Mr. 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,” Mr. Thomas said. “Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”

Matt Levine, in his column at Bloomberg, makes the point that no one loses stock this way. But another lesson: use a good password manager, and print your most important passwords and recovery codes on paper, stored where you store other important documents.

★ Tuesday, 12 January 2021