in the event of a loss of access?”
I recently came across the story of Stefan Thomas, a programmer who was paid 7,002 Bitcoin (BTC) in 2011 to make an animated video explaining BTC to the general public. He stored the BTC in a digital wallet and the private keys to this digital wallet in an IronKey hard drive.
The problem is that this IronKey hard drive is password-protected and he has lost the paper where he put the password on. This hard drive allows the user to have 10 guesses for the password before seizing the contents and encrypting itself, making it inaccessible to anyone forever. He has already tried eight times, leaving him with only two tries left. At today’s price, the 7,002 BTC is worth a staggering **$206 million**.
What’s worse is that Stefan Thomas isn’t the only one in this situation. According to Chainalysis, in 2022 it is estimated that there are 3.7 million BTC (about 17.6% of the max supply) lost or in stranded wallets. Many of these people likely lost their hard drives or lost access to it, making this one of the realities of self-custody in the crypto world.
So, how can you make sure that you don’t become one of these people? First, you need to make sure that you are properly securing your hardware wallets. This means ensuring that your passwords are secure and that you have a plan in place in the event of a loss of access. You should also make sure that you are backing up your wallets, so that if you ever do lose access, you can still recover your funds.
Having a contingency plan is also vital. For instance, you could set up a system where you have multiple hard drives with multiple wallets, each backed up and stored in different locations. This way, if you ever lost access to one, you would still have your other wallets.
Ultimately, by taking the proper precautions and planning ahead, you can make sure that you don’t become another sad statistic. So, make sure that you are storing your hardware wallets securely and that you have a backup plan in case of loss of access.