Bitcoin: Meet Stefan Thomas who lost $777 million to a forgotten password

Passwords: we all forget them from time to time. It’s normal, even expected. Thankfully, there’s usually a way to recover them. But for one man, forgetting a password may have cost him a fortune.

Meet Stefan Thomas, the man who can’t unlock a digital wallet containing 7,002 Bitcoins, now worth an estimated $777 million. He has just two password attempts left before the hardware erases itself forever.

Here’s everything we know about Stefan Thomas, his millions in Bitcoin, and how it all ended up locked away.

Who is Stefan Thomas?

Why is Thomas famous?

In 2011, Thomas created the animated explainer video “What is Bitcoin?”, which became a pivotal resource for millions trying to understand cryptocurrency. He also founded WeUseCoins.com, which became the largest information hub for new Bitcoin users at the time.

With over 15 years of experience as an open-source developer, Thomas co-invented the Interledger Protocol, a groundbreaking open payments standard that connects different payment networks.

What has he worked on?

Thomas has held high-profile roles in the crypto industry. He was previously the Chief Technology Officer at Ripple, where he helped develop projects like Codius (a smart contracts platform) and Mojaloop, aimed at expanding financial inclusion.

He currently leads Coil, a platform focused on web monetisation.

Thomas’s early life and interest in crypto

Born in 1986 near Munich, Germany, Thomas demonstrated an early aptitude in technology, coding apps as a teenager. After graduating with top honours in computer science from the Technical University of Munich, he began his career in tech and became interested in Bitcoin around 2011.

Why did he move to the US?

In 2012, Thomas moved to the US to further pursue opportunities in blockchain development. At Ripple, a San Francisco-based cryptocurrency blockchain company, he developed key technologies, including Interledger and Mojaloop, and rose to become the CTO and Chair of the Interledger Foundation.

Thomas and the power of cryptocurrency

Thomas is a firm believer in the potential of cryptocurrencies to democratise finance. He views digital currencies as a means to include underserved communities in the global economy, thereby bypassing the limitations of traditional financial systems.

What happened to his crypto fortune?

In 2011, Thomas received 7,002 Bitcoins as payment for his “What is Bitcoin?” video. At the time, they were worth about $2,000. He stored them in an IronKey — a highly secure digital wallet — and wrote the password down on paper. That paper was lost.

Today, with Bitcoin trading at around $111,000, his crypto stash is worth $777 million.

Why can’t he recover the bitcoins?

IronKey allows only 10 password attempts before permanently locking the device and deleting its contents. Thomas has already used eight of those tries, bit2me crypto news reports. With just two chances left, he’s reluctant to risk losing everything forever.

Were there attempts to unlock the digital wallet?

Yes. Over the years, Thomas tried various methods to regain access to his fortune, according to a report in Coinpaper. He sought help from friends and hackers who specialise in password recovery, but they were unable to crack the USB drive’s high security.

What about cybersecurity experts?

Cybersecurity firm Unciphered reportedly discovered a way to unlock IronKey devices using a process involving 200 trillion simulated password attempts without triggering the device’s self-destruct mechanism.

Unciphered reached out to Thomas, offering to help recover the Bitcoin. However, he declined, citing a prior verbal agreement with two other teams, promising them a share if they succeeded in unlocking the wallet.

Was the wallet ever unlocked?

As of now, there is no public confirmation that the wallet has been successfully accessed. If it has been unlocked, the information is likely to remain confidential for security or legal reasons.

What are the lessons from Thomas’s case?

Thomas’s story is a stark reminder of the importance of password security and safe storage. It also highlights how far cybersecurity has come with firms like Unciphered pushing the limits of what’s possible. However, it ultimately underscores the high stakes in the world of digital finance, where a single forgotten password can cost hundreds of millions of dollars.

Are there other cases like this?

Thomas’s story is not an isolated one. In 2021, cryptocurrency data company Chainalysis estimated that approximately $140 billion worth of Bitcoin was lost or left in wallets that could not be accessed.