• Stefan Thomas has just two more tries before his lost password locks him out of his 200 million euro Bitcoin windfall.
• Thomas argues for routine backups and, based on his experiences, doubts the viability of handling one’s own digital money.

German-born programmer Stefan Thomas lives in the center of San Francisco, among the technological bustle that characterizes the city. His background seems more like a warning story from a future novel than it does from actual life.

The situation he was in? A digital fortune is enticingly out of reach behind a forgotten password, valued at about 200 million euros in BTC.

Stefan Thomas: First Days of a Bitcoin Pioneer

A somewhat lesser-known Thomas was given 7,002 Bitcoins back in 2011 as a thank you for making the instructional film “What is Bitcoin?” In those days, Bitcoin was only beginning to gain attention outside of the IT community; it was valued less than a euro at first, then more than 20 euros.

Thomas is credited with popularizing Bitcoin with his movie, which, at the time, simplified the then-novel idea of digital currency and went on to receive around 10 million views on YouTube.

Thomas’ digital wallet rose in value in tandem with Bitcoin. Early in 2021, the price of one Bitcoin was just over thirty thousand euros. But Thomas’s ability to retrieve his money depended on a little piece of technology called the IronKey storage gadget.

There are just ten password-protected attempts at entry before this gadget locks permanently. Thomas had tried unsuccessfully eight times over the years to input his password. The piece of paper on which he had originally scrawled the password was long gone.

The Psychological Cost of Access Denied

Thomas’s anguish is vividly depicted in interviews and reports, such as this one from the New York Times. Every now and again, he wanted to let go and stop the agony of what might have been—millions of euros locked away. Thomas told himself, expressing a resignation to maybe never recovering his digital treasure, “Let this be a thing of the past, for your own sanity.”

The Crypto World Hears a Warning Story

Thomas’s predicament is typical of a larger problem in the bitcoin space. According to industry estimates, forgotten keys or passwords are the reason for about 20% of all BTC being deemed lost.

Not alone is this phenomenon related to forgotten access; it also contains heartbreaking stories of Bitcoin owners dying without leaving behind their digital legacy and hard drives filled with thousands of BTC winding up in landfills.

Acknowledging Historical Errors

Thomas called his experience a “painful memory” and hoped that others would draw a cue from his errors in an open reflection he posted on Twitter. Insisting on the need for foresight—an ounce of which may have spared him ten years of regret—he said:

“Test your backups regularly to make sure they are still working.”

Thomas is now doubting the wisdom of the decentralized banking philosophy that Bitcoin promotes—that of having your own bank. He asked sarcastically in an interview, “Do you make your own shoes?” comparing the complex workings of a bank to the difficulties involved in handling one’s finances.

Even with the dismal prognosis, Thomas has optimism. Waiting for developments in cryptography that might eventually crack the code to his digital safe, he stores the IronKey in a safe place. Remarkably, former Facebook security head Alex Stamos made a jokey offer to help unlock the IronKey in exchange for a ten percent share of the earnings.

Past the Missing Bitcoin

Luckily, Thomas’ story isn’t just about his BTC that is locked away. He became well-known in the cryptocurrency world during his time as Chief Technology Officer at Ripple, and he still has access to other Bitcoin holdings.

These encounters have also ensured that Stefan Thomas is still a significant figure and a seasoned veteran in the developing story of cryptocurrencies, which has influenced his opinions on digital riches.

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