In 2011, Stefan Thomas invested in a cryptocurrency called Bitcoin. At the time Thomas invested, one Bitcoin was worth $2 and the California resident purchased a total of 7,002 in the digital tokens. The price of one Bitcoin today is around $37,000, bringing his fortune to around $250 million.

The only problem is that Thomas forgot his password to the thumb drive with the Bitcoin inside. Thomas has used 8 of his 10 attempts to get the password right, and when he is out of attempts, all of the money is gone. 

Thomas’ 7,002 Bitcoins have been out of his reach since 2012. Through those nine years, Thomas has understood and processed this potential loss. In an interview with KGO-TV, the California resident said, “time heals all wounds,” describing the first moments when he realized he forgot the password as very painful and distressing. “You sort of question your own self-worth: ‘What kind of person loses something that important?”

This is the reality of cryptocurrency. The security that comes along with Bitcoin ensures that you remember your password and if you don’t the consequences are dire. Should there be a backup? Why isn’t there a way to recover your password?  The answer lies in how Bitcoin works. Bitcoin is a decentralized system.  If you hold your Bitcoins in an independent wallet (like Thomas) and not with an exchange or a bank or an institution, it’s just like cash or gold – if you lose it there is no recovery process.

The good news for current Bitcoin users is that there are now a lot of solutions to avoid the situation that Thomas finds himself in but those didn’t exist back in 2011 – unfortunately for Thomas.