What Would You Do to Recover Lost Bitcoins?
Volatility, flash crashes, hacks and scams: life in the crypto demimonde can be tough, but perhaps the worst fear of every trader is the harrowing possibility that, after earning a tidy profit in bitcoin or ethereum, they lose their wallet signature or air-gapped drive.
As nightmarish as this sounds, it actually does happen. There have been numerous cases of misplaced hardware wallets and forgotten keys in recent months, and if nothing else these highlight how the humble human is the weak link in the supposedly inviolable cryptographic security of blockchains. Blockchains provide us with immutable records of our funds and with nigh-on unbreakable encryption of our accounts, but we often go and spoil it all by failing to losing our private keys, or by simply throwing our crypto storage in the trash.
To the take the most recent example, a Swiss man – known only as “Thomas T.” – offered a reward to anyone who could reunite him with his Keepkey and Ledger Nano S hardware wallets, both of which were lost when he went shopping in Lucerne in April. Initially, the reward he offered for these two wallets – which together contained cryptocurrencies worth CHF 800,000 (approx. EUR 672,000) in total – was CHF 40,000.
However, after almost a month had passed without any promising lead, Thomas more than tripled the reward to a hefty 135,000 CHF, a move that has only increased the emails he’s being swamped with on a regular basis by people who think they ‘might’ve seen’ his wallets at the Eiffel Tower or on the peak of the Matterhorn.
According to Thomas’ version of events, he wasn’t sure whether he’d left his bag in his unlocked car, or if he’d put it down somewhere while out shopping and left it behind. Either way, it shows that the moral of this story is that, if your crypto is secure only for as long as you keep it in your physical possession, then you really ought to keep it in your physical possession.
Petitioning the City Council
Human oversight and forgetfulness is also what struck in a case in Newport, Wales, where an early miner of bitcoin accidentally threw out an hard drive during a spring cleaning session. According to James Howells, this laptop contains the private key to the 7,500 bitcoins he mined in 2009.
As of writing, these 7,500 coins are now worth almost USD 57 million. Unsurprisingly, such a princely sum has led Mr Howells to repeatedly petition Newport City Council to let him excavate the local landfill site, where his old Dell hard drive is most likely buried. Also unsurprisingly, the council has refused his requests, citing the huge financial and environmental costs involved.
What’s funny/sad about this is that Howells still has the public address of his bitcoin wallet, enabling him to check that his 7,500 bitcoins are still there, but not enabling him to move them to the nearest bank.
“It’s a little like looking at your bank account containing millions of dollars but not being able to spend it,” he says.
When All Else Fails: Hypnotherapy
The main issue in the cases of both Howells and Thomas T. is the loss of the private keys needed to authorise payments from a particular bitcoin wallet. In other words, their problems could be solved if only they could recall what their 64-character private keys are (good luck with that). This is an issue that has affected many other people recently, and some of them have in fact begun turning to hypnosis as a means of remembering their forgotten keys.
This, at least, is what is being claimed by South Carolinian hypnotist James Miller, whose website reveals that he’s charging 0.5 BTC for his “Crypto-Hypnotist” service and then a 5% commission in the event of a successful retrieval.
The fact is, given the 64-character length of private bitcoin keys, it seems highly unlikely he could actually help anyone.’ That said, he asserts that the human subconscious “has a photographic recall once tapped into,” while he also offers to help clients remember where they might have left their lost hardware wallets.
So far, however, Miller is giving no indication of just how successful he’s been in helping people retrieve their lost bitcoins. As such, most people would probably be better off not losing them in the first place, if only because cryptocurrencies are designed precisely so that ‘lost’ coins can never be found.