They lost a fortune in “forgotten” Bitcoins

Forgotten Bitcoins already add up to a fortune! There are approximately 7.8 million units of Bitcoin (BTC) – or almost 40% of the total issued to date – lost, as calculated by the analysis house Glassnode. There are US$530 billion (R$2.6 trillion) in cryptocurrencies, an amount greater than the market value of companies such as Tesla It is JPMorganand more than five times the Petrobras (PETR4).

Cryptocurrencies “disappear” because investors lose their access key. In a simplified way, the Bitcoin it has two “addresses” – a public one, which functions as the bank’s branch and account numbers; and another private, which is an alphanumeric password of 12 or 24 words. The problem is in this second one.

If someone forgets their bank password, just ask for a new one via the app or at a bank branch. O Bitcoin, however, is not controlled by companies or governments. Therefore, there is no one to turn to.

“When you lose the private key or the sequence of words, you lose access to the ‘safe’. By way of comparison, the difficulty of finding a private key at random is 10⁷⁷. It would be like deciding to find a specific atom in the entire universe.”explained Rudá Pellini, co-founder of Arthur Inc.

Custodial Bitcoin

Here’s an addendum: only investors who self-custody their cryptocurrencies in private cryptocurrency wallets need to worry about alphanumeric passwords. This is because, in the case of users who use exchanges or funds and ETFs, the security of numbers and letters is the responsibility of the custodian.

Why do investors lose their keys? As cryptocurrency investors are constantly attacked by hackers – the Brazilian who lost R$1 million in cryptocurrencies after a virtual attack says so – some tend to write the private key on paper or metal plates, and keep it well hidden. But if you keep it so well that you can’t find it anymore, get ready to have Bitcoins forgotten and goodbye to cryptocurrencies.

Two other main reasons are damaged hard drives (in the case of people who keep the password on the computer) and the death of the Bitcoin owner. In 2021, for example, investor Mircea Popescu drowned off the coast of Costa Rica, aged 41, leaving a fortune estimated at more than US$2 billion (R$10 billion) in BTC at the time.

How to recover forgotten Bitcoins?

How to recover a lost Bitcoin? There is no formal password/private key recovery process, says Luiz Hadad, blockchain consultant at Sherlock Communications. However, says the expert, there is a possibility in the case of a damaged HD.

“If the private key is stored in it, it is possible to reverse the damage and restore it in some cases. Of course this depends on the extent of the damage and how encrypted or protected the data was.”explains.

In recent years, some startups like Wallet Recovery Services and Anchorage have specialized in recovering cryptocurrencies. In practice, they use software to generate and test millions of potential passwords, managing to “invade” the wallet from time to time. To the The Wall Street JournalWallet said it has a 30% success rate.

There are also those who use hypnosis. Jason Miller, a hypnotist from South Carolina, USA, became famous in 2018 for helping investors remember their password or the location of their hard drives. At the time, he charged 0.5 BTC upfront, plus 5% of the amount recovered. Also to the WSJ, he said he was able to help half of the patients.

Tips for not losing Bitcoin

Following expert tips, for more advanced users, it is recommended to use password protection tools, such as a password manager, and leave cryptocurrencies in hardware wallets (physical wallets), in addition to being very careful when exposing your public address and interacting with unknown websites; If you choose to leave cryptocurrencies with brokers, the ideal is to choose reliable and safe platforms with a good track record. In this case, however, it is necessary to take into account the “broker’s risk” – that is, they can also suffer hacks, as happened with Mt. Gox and CoinEx, for example. Be extremely cautious of anyone asking for private key information, as this is likely a scam. As the internet is full of phishing cases, another recommendation is to only access known websites.