A Bit of Password Bother

Password security is an issue that often has cyber-professionals pulling their hair out, owing to the high prevalence of simplistic passwords used across multiple accounts, providing easy pickings for hackers. However, a story with a twist on this topic has emerged recently.

With the value of Bitcoin surging, particularly over recent months, a number of individuals who purchased the cryptocurrency years ago now find themselves sitting on vast fortunes. The only problem is that many are unable to access the money because they cannot remember their original passwords!

Unlike traditional bank accounts and online wallets, which can reset forgotten passwords, Bitcoin does not store passwords; instead, it is governed by a network of computers, which can confirm the accuracy of passwords to allow transactions without seeing or knowing them.

This means that without the correct password there is simply no way into your Bitcoin wallet. According to cryptocurrency data company Chainalysis, 18.5 million Bitcoins, worth approximately $140bn, are in lost or stranded wallets. One person affected more than most by such a memory lapse is Stefan Thomas, a programmer living in San Francisco. Holding 7002 Bitcoins at an estimated value of $220m, he only has two more guesses of his password to allow him access to his IronKey, which holds the private keys to this vast fortune.

Thomas lost the paper on which he wrote down his password, and has failed with eight out of the 10 attempts he is allowed before the IronKey encrypts its contents forever.

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

The issue has provided a very stark lesson in the importance of keeping password details safe and secure. Commenting on the story, Ian Pitt, CIO, LastPass by LogMeIn, said: “As would-be millionaires are currently scrambling to figure out how to access their Bitcoin fortunes, the importance of proper password management and investing in a password manager cannot be stressed enough.”

He added: “If anything can be learned from this unfortunate situation, it’s that you shouldn’t leave your most important information vulnerable to your own memory; safeguard it with a password management solution.”

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