Forgot Your Bitcoin Password? That Could Be a Problem
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What is the main topic discussed in this episode?
This is Your Money Matters from The Wall Street Journal.
Welcome to Your Money Matters. I'm Anne-Marie Fertoli in New York. Bitcoin is notorious for its volatility. The cyber currency plunged nearly 25 percent last week after soaring to record new heights in November and December. That has investors watching closely. But imagine this. You want to cash in or get out, but you can't remember your password. We've all had the experience of forgetting a password to an online account. But for Bitcoin, it's very different because there's no official authority to contact to help you reset it. Joining me now in our studio to talk about this particular challenge are Wall Street Journal reporters Allison Sider and Stephanie Yang. So, Allison, there's a great phrase in the piece you both wrote for The Wall Street Journal that really gets to the crux of the problem.
What happens when Bitcoin owners forget their passwords and why is it different from regular accounts?
It's like losing a bank password, but there's no bank to contact. It's not like you can just call someone for help or click a forgot password link and get an email to reset it.
Yeah. And the interesting thing is that's really that was part of the appeal to a lot of people who bought Bitcoin. They wanted to sort of get away from financial institutions and sort of cut the middlemen, the banks out of transactions. But that puts a lot of responsibility on the individual person who owns Bitcoin. You sort of have to become your own bank.
Stephanie, typical password requirements seem to be getting more and more complex, but Bitcoin passwords are in a league of their own. Can you explain the password requirements?
Right. So to move Bitcoin around, as we wrote in the story, you need a public key and a private key. And so what you really want to protect is that private key, which is a long string of incoherent letters and numbers. I've looked at them or examples of them, and I just would never be able to remember that. So basically what people do is they make up passwords to protect their private key and then passwords on top of that, and then recovery tools. And then you have all these layers of security that you have to get through. And most of the time, it seems like with a lot of people who bought Bitcoin when it was worth, I don't know, $10, $15, $20, they've forgotten at least one, maybe more of those codes that they originally had needed.
Right. And as you mentioned in the article, there was actually an episode of The Big Bang Theory where this happened. And you both talked to investors who had bought in years ago and are now watching Bitcoin soar and are unable to do anything to get their money.
Yeah, it's really frustrating for a lot of people. We talked to a lot of people who, you know, maybe forgot they even bought Bitcoin. And now that the prices are so high, you know, Bitcoin at one point almost hit $20,000 per Bitcoin price. Now that prices are so high, people really would love to get back into those accounts and they're finding that for a lot of different reasons they can't. Maybe they wrote their password down and they had a typo and it's off by one digit and they can't remember it. Or maybe their hard drive that it was stored on has been corrupted or thrown out. There's just a lot that can go wrong.
Especially as prices have been going higher and higher, I think we found people are more willing to do out there drastic things in order to get it back because the stakes are so much higher. For example, we wrote in this story that there was this guy in Wales who threw away his hard drive in 2013. At that time, he thought, well, I'd really like to get this back. But if there's nothing I can do, then, you know, I'm kind of stuck. And now the value of that hard drive and that private key is upwards of $100 million. And so as you see that value keep climbing, you think, okay, well, it's worth it to try and do something really big now in order to get it back.
Yeah.
Yeah, I think some of the people we talk to are, you know, very seriously thinking about hypnosis. Wow. You know, hiring hackers to get into their accounts, just thinking, you know, it's either I trust this guy and he might clean me out or he'll take a 20 percent cut or I've got nothing.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:02–0:57
2
What happens when Bitcoin owners forget their passwords and why is it different from regular accounts?
0:57–7:22
3
How do Bitcoin public and private keys work and why are private keys so hard to remember?
7:22–9:20
4
Why did early Bitcoin adopters forget codes and what real-life examples show the problem?
9:20–11:06
Speakers
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