The recent surge in bitcoin prices has left most early investors significantly better off. But not everyone is able to celebrate their growing fortunes.
Early investor Philip Neumeier bought 15 BTC back in 2013, when the currency was valued at just $260. His investment of $3900 today is worth over $300,000. But while on paper Neumeier has enjoyed a significant increase in his net worth, he is prevented from accessing those coins.
Secured by a password long forgotten, Neumeier now finds himself in an agonizing position. Without any hope of recalling the complex, secure password securing his wallet full of coins, Neumeier has taken drastic action to attempt to unlock his stash.
According to media reports, Neumeier has eschewed offers of hypnosis to recall his password, instead opting to build a supercomputer to attempt to uncover the password by brute force.
The supercomputer stands at over 5 ft tall, and relies on a water tank of some 1,200 litres to control the heat emitted by the computer.
However, even with the help of the supercomputer, Neumeier estimates it could take up to 300 years to unlock the code: “I should probably be about 332 years old by then — hopefully bitcoin will be worth something.”
The problem stems from the two keys required to hold bitcoin – a public key and a private key. Without the private key being securely stored, funds can be lost forever. Indeed, by some estimates, there are as many as 3.8 million lost bitcoins, like Neumeier’s.
IT worker James Howells earned some 7,500 bitcoins by mining. But in 2009, an office clearance saw his hard-drive containing the private key thrown away in error. The drive is now thought to be worth over £123 million.
While instances of this kind are hugely frustrating for the individuals involved, they serve as a reminder of the specific decentralized nature of bitcoin.
Further, they are a reminder to anyone buying and holding bitcoins to make certain they have secured and backed up their private key at all times.
So next time you find yourself clicking on the ‘Forgot Password’ link, think yourself lucky – as the case of Philip Neumeier proves, it could be significantly worse.