Lost Password, Lost Millions? More than Bitcoin Fortunes are at Risk

by | Jan 26, 2021 | Uncategorized | 0 comments

Last week we learned about Stefan Thomas, a man who is on the brink of losing $220 million because he can’t find the paper where he wrote down a password for his IronKey, the secure device holding the password that lets him open his digital wallet.

Mr. Thomas has a lot of company. According to a recent article from The New York Times, around 20% of all Bitcoin –about $140 billion – evaporates because of lost wallets or keys. Recovery is an exercise in frustration. At the heart of Bitcoin is the concept that anyone can open a digital bank account and no government can regulate it. But the same technology that makes Bitcoin untouchable by governments makes it vulnerable to humans, who are known for losing important things like passwords.

Bitcoin and other cryptocurrency exchanges rely on heavily encrypted tools like the IronKey to protect multi-million dollar assets. But anything that relies on a password is vulnerable, whether it’s a $200 million cryptocurrency account, business documents or family videos.

A growing awareness of the importance of protecting digital assets of all kinds is starting to enter the mainstream. Almost all states now understand that digital assets have value: financial, operational, and sentimental. The relationship between the platforms that hold and control access to the digital assets (data and content) and end users is still fraught with problems.

The big tech companies create the infrastructure and own it—the end user who enjoys the benefit of access to the infrastructure is like a tenant in a large apartment complex. Renters are not owners, and while they may own the contents of their apartment, they have no ownership of common areas, the land the building stands on, or the real property assets.

Estate planning attorneys and financial advisors have begun to recognize the value of this new asset class and have started addressing it in estate plans and business succession plans.

For end users to successfully protect their digital assets, a password protection vault is not good enough, or worse, they can create bigger problems.

Directive Communication Systems offers professional advisors, individual users, and content providers a means to keep digital assets visible and accessible and protects account holders with a proprietary system that delivers compliance, security, and efficiency. For crypto account holders, DCS is an additional layer of security.

DCS invites Stefan Thomas to contact us – we’d be happy to get him a free DCS account so he can start over, confident in the knowledge that even if he lost his IronKey, he would still be able to access all of his online accounts.