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How I recovered cryptocurrency from a broken laptop

239 points by 11thEarlOfMar 9y ago

hatsunearu 9y ago
Oh man! At least the poor guy got his money back. UX on cryptocurrency software seems absolutely terrible even today--I've had countless problems trying to get my ethereum wallet working (still hasn't worked!)
- maxencecornet 9y ago
  Have you tried exodus wallet ? It's UX/UI is really good, I mean for a crypto wallet >UX on cryptocurrency software seems absolutely terrible even today I still have nightmares about multibit UX, it was horrible
bdamm 9y ago
The cold wallet problem has vexed me. The solutions seem immature given how widespread this need is. For example, nobody seems to have developed a Shamir's secret sharing approach to cold wallets, which seems like a natural fit. Also, there remain these warnings that one must be very careful about how to transfer funds out of a cold wallet (e.g. in one transaction) which seems to defeat the entire purpose of having a cold wallet (which is safety of the funds.)
- dreit1 9y ago
  IMO it should be done like this. You have a hot wallet, probably on your phone that has a half key. You keep a QR code somewhere else with the other half. Combine these two and you have the cold storage private key. Additionally you could have the full private key in a safe or whatever that you never touch. In this system you can top up your hot wallet by specifying all transaction details and then scanning the QR with the half code to sign the transaction and send it off. This would roughly as secure as some sort of 2FA method. The attacker needs to have both the phone compromised, and the paper with the half key compromised.
  - siculars 9y ago
    I appreciate everything you just said and agree that this could work well for some people. On the other hand, reading it through the eyes of the 99% of people I know who can barely check their email, everything you said may as well be written in Klingon. It is simply too difficult for most people to understand.
    - chairmanwow 9y ago
      Cryptography is a necessary lesson that we need to teach in 2017. Lowest common denominator is a hard threshold to design security for.
      - deleted 9y ago
        [deleted]
    - prawn 9y ago
      It's not an unsolvable problem with good apps/software though. A key as a sequence of characters is confusing, but depicting an actual key cut in half, that needs to be combined with another, would make sense to people. As was said elsewhere, a lot of this will come as the space matures.
  - theEXTORTCIST 9y ago
    The attacker only needs to have compromised the device which spends from the wallet file
    - dreit1 9y ago
      Only a half key exists in permanent storage on device. The other half paper key is loaded into memory for transaction signing, and then removed from memory the moment the transaction is sent off You would need both halves to sign a transaction
      - theEXTORTCIST 9y ago
- mrb 9y ago
  «nobody seems to have developed a Shamir's secret sharing approach to cold wallets» This has been developed. Search for multisig wallets, N-of-M, etc
- nolemurs 9y ago
  > nobody seems to have developed a Shamir's secret sharing approach to cold wallets I mean, what is there to develop? Take the wallet's private key, and run it through your favorite implementation. I'm not really sure what a bitcoin specific implementation would do! Just autoload it into your specific bitcoin client for you?
thisisit 9y ago
This is a good read. Count me on the same boat, thanks to the shitty Multibit wallet but I am not in a hurry to open the wallet yet. That said: > Four years ago, I was living in Hong Kong when a fellow journalist named Mike* and I decided to invest in bitcoin. I bought four while Mike went in for 40; I spent about $2,000 while he put in $15,000. Invest? Really? That is called speculation with the amount of money you can afford to lose. If you were investing you would go all in and track the progress and protect the password.
- mrgordon 9y ago
  What is the problem with Multibit? Just recovered a 2013 wallet a few days ago. Got a password on it or something?
  - thisisit 9y ago
    It's the issue highlighted in the article. > Most users only need one wallet, but MultiBit practically demands that you set up multiple. On top of this, it allows you to add multiple passwords to each wallet, even though these aren't required. So it gets confusing fast. Then: > I tracked down an old version of the now discontinued software and discovered that there were multiple ways to restore wallets using MultiBit So you got links for the old version?
    - mrgordon 9y ago
      Mine didn't have a password (only worth a few $) but yeah that sucks I was able to just save the wallet (as a .dat I believe) and then inspect it with a text editor. The contents were my private key and the date the wallet was created. I then used my private key and my address to import the wallet into a modern program.
siculars 9y ago
I'd call myself a developer and a "computer" expert, especially relative to 99% of the people I know in real life. I've also been in the bitcoin game a long time. I run full bitcoin and monero nodes. Absolutely none of this is easy and frankly, at times it can be absolutely terrifying considering the sums of real dollars you may be transferring. To think that the market cap of Bitcoin and Crypto in general is where it is is actually shocking considering how absolutely UNfriendly the entire endeavor is from step 0 to actually buying, selling, transferring coins or buying goods and services. When using cryptocurrency becomes as easy as pumping gas or sending an email or depositing a check - watch out, because it inevitably will become that simple. It will make the run up we've seen in 2017 seem absolutely darling. I'm certain the usability will come. Personally, I'm waiting for Square Cash to figure it out and then integrate with Twitter.
- cstejerean 9y ago
  I don’t know, for buying and selling Coinbase seems to be pretty user friendly. You can sign up for an account, link it to your bank account and start trading in minutes. Not sure how much easier it could get.
  - siculars 9y ago
    Right, I was gonna say that Coinbase is currently the best way to buy and sell coins today. I can say that as I have accounts on a number of exchanges. Still, Coinbase does not let you know that they also operate GDAX.com, where you can "make a market" and buy/sell for no fee. A buy/sell on Coinbase is basically a market order on GDAX.
    - syntheticcdo 9y ago
      Navigate to coinbase.com, scroll to bottom: Products - GDAX. Hardly a secret.
      - netsharc 9y ago
        Sigh... "You just had to go the basement bathroom past the sign that says beware of the leopard!" (To misquote Douglas Adams). I had to have a friend tell me that there's seamless transfer between yhr 2 systems, if they really wanted to let you know they would've had this trading capability as no. 4 in their "Getting Started"..
llazzaro 9y ago
Had a similar issue. when I realised that multibit was legacy I though I lost all. I recover priv. keys modifying the source code of multibit. pain in the ass with hemorrhoids
cryptodogemoon 9y ago
>People .. ridicule cryptocurrencies, dismissing bitcoin as a scam, a Ponzi scheme or a bubble. >Wealth disparity is at record levels and the ultrarich have cornered the market on every asset class, but with bitcoin, an entirely new economy has sprung into existence. That's the pitch for decentralized cryptocurrencies: They offer hope that there might be another, fairer way of doing things. The irony here is Bitcoin, like most other cryptocurrencies are structured similar to a pyramid scheme and highly favor existing capital to control the supply and exploiting users who join the network past a certain date where barrier to entry increases. They tell the story of acquiring this digital asset for a small capital sum, and simply passing it off to someone else for a greater sum. The intention is not utility but psychological exploitation of greater fools. http://bitcoin.stackexchange.com/questions/86/is-it-possible-to-estimate-the-gini-coefficient-for-bitcoins-and-if-the-trend-is http://bitcoin.stackexchange.com/questions/86/is-it-possible... http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 Best estimates (2014) are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent
- pmorici 9y ago
  That maybe true of Bitcoin Core today but that isn't the vision expressed in the original Bitcoin. The true spirit of Bitcoin lives on today in Bitcoin Cash.
  - cryptodogemoon 9y ago
    What?.. All versions of Bitcoin share the exploitative inverse log curve for distribution and work input. Bitcoin cash further changed the difficulty algorithm to benefit ASIC miners during a very brief window of time. Fees are reduced, and bandwidth has increased but the same design flaws are shared from Satoshi's algorithm. So you're completely incorrect.
    - 9y ago
brailsafe 9y ago
I feel like Engadget could use their screen real-estate a bit more effectively ;) https://imgur.com/a/TwXwA https://imgur.com/a/TwXwA
- ladberg 9y ago
  That's your adblocker blocking the ad but failing to remove the surrounding frame.
  - brailsafe 9y ago
    Interesting that you point that out. In a sense you're right, but actually that's the default tracking protection built into Firefox now. No adblocker required. I was actually referring — in jest, in case that wasn't clear — to the fact that the only content above the fold on this ultrawide display is a stretched image of Hong Kong.
hitekker 9y ago
This was a fun read although as others have pointed out, the end conclusions are not supported very well by, and maybe are irrelevant to, the article as a whole.
deleted 9y ago
[deleted]
tlb 9y ago
Are there good estimates of the amount of bitcoin lost every year due to carelessness? Based on many anecdotes like this, I fear it's pretty large. Bitcoin was supposed to be slightly inflationary, due to mining. But if a sufficient fraction is lost every year due to hardware failures and forgotten passwords, it will end up being deflationary. Someday (around log(1e6)/log(1+x) years from now, where x is the fraction lost every year), there'll be only 21 bitcoins left in the world, trading either at 0 or a number with 3 or 4 commas. [edit: fixed in/de-flation mixup]
- LeoPanthera 9y ago
  It would be a trivial fork to increase the amount that each bitcoin can be subdivided by, so if the currency does inflate a lot, liquidity can still be maintained.
  - pavel_lishin 9y ago
    Is there such a thing as a trivial fork in the bitcoin world? You'd have to get buy-in for most of the developers, and most of the users too, or risk splitting into two currencies. Again.
- coinqueror 9y ago
  One could argue that the universe of avail bitcoins (those with known passwords) will asymptotically approach zero. Ie, there's a small chance of a user screwing up. And since there's no recourse, always a perpetual small chance of someone losing their bitcoins. Maybe Poissonian?
- throwaway13337 9y ago
  This would make bitcoin even more deflationary. Inflation is when a currency loses value. Less and less of something would mean it would gain value creating deflation.
  - coinqueror 9y ago
    What recourse is there for bitcoin provider services that screw up? Ie, if one day Coinbase says something like, "sorry, we lost the password to one of our internal coin wallets due to technical error, and your 5.1 bitcoins are lost." I bet there's some clause in their terms that tries to shield them from this, but wonder how enforceable it would be. Ie, a regular bank presumably couldn't just say, "sorry we lost your $50k deposit due to technical error". They'd be liable.
Double_a_92 9y ago
And that's why i never put passwords or other keys on data that I need to keep safe (as in an archive e.g.). The chances of me messing something up and losing it forever is bigger then the chance of somebody actually steeling it.
graniter 9y ago
I can identify with the emotions in the article. I spent the better part of the day wrangling with an old version of MultiBit to get some bitcoin out of an old wallet. And I'm currently in process of trying to recover access to an old Coinbase account that I'm pretty sure has a few bitcoin in it. Part of the problem with all the security around cryptocurrencies is that it can be really hard to keep access and not lose them. So many passwords, two-factor authorizations, Authy tied to phone numbers, etc. I am not using nearly as much security on my bitcoin stuff now. I think the risk of getting hacked is lower than the risk of me losing access.
- Fredej 9y ago
  Exactly. I've made this point before: The least appealing thing about crypto to me is one of the selling points - That I can be my own bank. I don't trust myself nearly enough to be my own bank. I want to pay someone I trust to take care of that for me. I don't want hacking or forgetting a password to be something that in any way affects my holdings.
- swah 9y ago
  I actually have no idea how to recover Authy/2FA if my phone is taken away..
  - letsgetphysITal 9y ago
    Authy keep the seed so you can recover the 2FA token providing you can still log in to your Authy account. That's why I use Google Authenticator. I don't want the seed kept (or even known) by a third party. I'll keep my own backup far, far away from any device which also can be used to recover account credentials.
    - burger_moon 9y ago
      If you use Gemini exchange I believe they only support Authy, at least that's what I had to use. Which is a little annoying having to use both Authy and Google Authenticator depending on which exchange I'm using.
HN15718653 9y ago
I'm still confused (starting to fill with regret?) about bitcoin. I remember lively discussions with friends circa 2012. None of us bought. We'd be centi-millionaires? Is HN now full of mega-millionaires, since the community is full of tech-savvy early adopters? Raise your hand if you made over a million. Raise both hands if you've made over 10 million.
- maxencecornet 9y ago
  >I remember lively discussions with friends circa 2012. None of us bought. We'd be centi-millionaires? Most people talked about it, few did buy. But the feeling when you've bought and lost the ability to recover your wallet is even worse then not having bought some ! I actually did buy some, but lost my wallet, like so many I know my adress, and the coins are still there, but I can't do anything about it, not idea where my backup wallet.dat is.. I mean, it's pretty tough to keep track of your digital assets for years, while your mind in thinking about work, friends ect..
- Grangar 9y ago
  I sold almost all my over 2000 coins back in 2011. No one who has bought big back then has held on all this time, the only new crypto millionaires are those who find old wallets just now.
- joshstrange 9y ago
  Ehh, I tell this story often enough when BTC comes up but here it goes: I mined (on a CPU) 100 BTC solo back when it was first released. They weren't worth even a $1 at that time. Here I am now and I doubt I even still have the hard drive that I mined them on and if I did have it I have formatted it many times over. Those BTC are lost for forever. Whenever I feel a pang of anger/guilt I just remind myself that I would have sold when BTC hit $8 if not even sooner than that and in some ways that would be worse than what really happened.
- twayamznacct 9y ago
  Thoughts like these are what have really reduced my will to live. If I had made a simple decision back then there's a good chance I'd never have to waste my life working again. I could have been freed by now, to live a life dedicated to whatever I wanted to do, whenever I wanted to do it.
Shoothe 9y ago
Ha, funny, just this Monday I had to recover wallet.dat from a slightly corrupted HDD drive. What I needed is just the private key bytes (32), unfortunately the disk was unreadable. What helped was RAW access to data on disk coupled with this little tool that scans for private key signatures: https://www.makomk.com/gitweb/?p=bitcoin-wallet-recover.git;a=summary https://www.makomk.com/gitweb/?p=bitcoin-wallet-recover.git;... Then of course the bytes had to be converted to addresses to check which one had the money (and if I found it) and then to WIF to import in Electrum. After half a day of stress I did numerous copies now.
graniter 9y ago
I wonder, how many of us here actually understand Bitcoin and cryptocurrencies? I know several of us probably use them, but even amongst the tech-savy, there seem to be very few who actually understand it, and even fewer of those who participate in the programming of it. I understand the descriptions of blockchains and it's advantages, but I've never looked at any code. And I realize that anyone could in theory look at the code and participate, but it's out of the reach of most programmers I think, let alone regular people. So while on the one hand it seems to be a great "power to the people" currency option, it's really still in the hands of a few.
- nolemurs 9y ago
  > but it's out of the reach of most programmers It's actually really not all that difficult. There are lots of details, and understanding it all end to end is definitely a task most people will never do, but the issue is simply one of effort and motivation, not of fundamental difficulty.
- ric2b 9y ago
  The white-paper is about 10 pages long and completely approachable to programmers with some knowledge of hashing functions and public-key cryptography. The biggest challenge is understanding how all the pieces fit together, the pieces themselves aren't any kind of ground-breaking computer science.
JepZ 9y ago
Anybody knows a good choice for a long-living bitcoin wallet software nowadays (cold-storage)? Currently I am considering Electrum but I have no idead if thats a smart choice. I do not require a GUI, but it should be maintained for a while (so a large user base should help).
- StavrosK 9y ago
  The wallet doesn't matter, as long as you have a BIP39-compatible seed (which you can generate with many utilities), any software (or hardware) wallet can be used.
- pault 9y ago
  As far as I know the best option is still printing a newly created address and private key on archive quality paper and putting it in a bank safe deposit box. If you don't ever spend from that address the key should be safe. Best practice is to use an airgapped computer running a live CD so the key will never have been on a network. It should be easy to find tutorials on paper wallets. It's not user friendly for sure, but if you want to protect a large amount of Bitcoin it's the best option.
- andymal 9y ago
  Look into the Ledger Nano S. Supports each BTC chain, other cryptos, and is super easy to use IMO. Uses a seed to create the wallet so you can drop that in a safe deposit box and restore if anything ever happens to the hardware wallet. Edit: this is the hardware version of storing cryptocurrencies.
BLanen 9y ago
People critical of increasing wealth disparity vouching for bitcoin is pretty ironic and just highly stupid.
- ric2b 9y ago
  Why is that? Simply because of the current distribution? That doesn't matter much, what matters is what the system incentivizes. Fiat incentivizes bailouts and devaluing poor people's savings by printing (or QE'ing) money into gigantic financial middle-men.
  - drngdds 9y ago
    >poor people's savings I've got some bad news about poverty for you, buddy
nolemurs 9y ago
Weird choices all around for how to solve this problem. The author of the post could have saved himself a lot of trouble by just focusing on the key backup files and moving the keys to a bitcoin client like electrum that doesn't require a full blockchain sync.
jakewins 9y ago
Someone else might find this tool I wrote useful, it finds BTC wallets by scanning raw block devices: https://github.com/jakewins/findbtc https://github.com/jakewins/findbtc I deleted 26BTC a while back when reinstalling a laptop, because they were effectively worthless. A few years later, they weren't anymore, so I wrote this to get them back. As long as the file system isn't encrypted, it scans the raw bytes on the disk to find remnants of wallets. It also unzips compressed files it finds and does the same scanning in there.
- joshstrange 9y ago
  How do you build this? I see it's go and I have that installed on my laptop but I'm not familiar with the commands to run to build it and the last 15min or so of googling around have been fruitless.
  - jakewins 9y ago
    If you have Go installed as per https://golang.org/doc/install https://golang.org/doc/install you can build/install this project like this: > go install github.com/jakewins/findbtc I'll update the readme! If that's giving you trouble, I can cross compile it here and upload a binary to github for you if you tell me your OS and processor - although since this is potentially sensitive software, I'd advice building it from source
  - deleted 9y ago
    [deleted]
- alinspired 9y ago
  I've tried your test wallet and got an offset for file location - any hints on how to get the wallet's content, with dd i presume?
  - jakewins 9y ago
    Yeah, the tool doesn't help much past this, it'll just tell you where the raw bytes are. Basically, what is at that offset is (remnants of) a Berkeley DB file; you'll need manually do the forensic work to get the key out of it past that. Alternatively, there are services that will recover locked/corrupted wallet files I think, so you could extract a big blob around that byte offset and find someone that will do the forensic work for you.
sireat 9y ago
This is very similar to what I had to go through to recover a few BTC in my old Multibit wallets from 2013 this summer. I had the same problem of underpaying for the transaction because I had to sweep many small wallets. There are many old wallets around which contain amounts too small to recover. Let's say you have 100 addresses each containing $1, it is no longer economical to sweep them into a single address. Originally in 2011-2013 it was considered a good practice to create many different addresses for receiving.

239 points by 11thEarlOfMar 9y ago

Oh man! At least the poor guy got his money back. UX on cryptocurrency software seems absolutely terrible even today--I've had countless problems trying to get my ethereum wallet working (still hasn't worked!)

maxencecornet 9y ago
Have you tried exodus wallet ? It's UX/UI is really good, I mean for a crypto wallet >UX on cryptocurrency software seems absolutely terrible even today I still have nightmares about multibit UX, it was horrible

bdamm 9y ago

The cold wallet problem has vexed me. The solutions seem immature given how widespread this need is. For example, nobody seems to have developed a Shamir's secret sharing approach to cold wallets, which seems like a natural fit. Also, there remain these warnings that one must be very careful about how to transfer funds out of a cold wallet (e.g. in one transaction) which seems to defeat the entire purpose of having a cold wallet (which is safety of the funds.)

dreit1 9y ago
IMO it should be done like this. You have a hot wallet, probably on your phone that has a half key. You keep a QR code somewhere else with the other half. Combine these two and you have the cold storage private key. Additionally you could have the full private key in a safe or whatever that you never touch. In this system you can top up your hot wallet by specifying all transaction details and then scanning the QR with the half code to sign the transaction and send it off. This would roughly as secure as some sort of 2FA method. The attacker needs to have both the phone compromised, and the paper with the half key compromised.
- siculars 9y ago
  I appreciate everything you just said and agree that this could work well for some people. On the other hand, reading it through the eyes of the 99% of people I know who can barely check their email, everything you said may as well be written in Klingon. It is simply too difficult for most people to understand.
  - chairmanwow 9y ago
    Cryptography is a necessary lesson that we need to teach in 2017. Lowest common denominator is a hard threshold to design security for.
    - deleted 9y ago
      [deleted]
  - prawn 9y ago
    It's not an unsolvable problem with good apps/software though. A key as a sequence of characters is confusing, but depicting an actual key cut in half, that needs to be combined with another, would make sense to people. As was said elsewhere, a lot of this will come as the space matures.
- theEXTORTCIST 9y ago
  The attacker only needs to have compromised the device which spends from the wallet file
  - dreit1 9y ago
    Only a half key exists in permanent storage on device. The other half paper key is loaded into memory for transaction signing, and then removed from memory the moment the transaction is sent off You would need both halves to sign a transaction
    - theEXTORTCIST 9y ago
mrb 9y ago
«nobody seems to have developed a Shamir's secret sharing approach to cold wallets» This has been developed. Search for multisig wallets, N-of-M, etc
nolemurs 9y ago
> nobody seems to have developed a Shamir's secret sharing approach to cold wallets I mean, what is there to develop? Take the wallet's private key, and run it through your favorite implementation. I'm not really sure what a bitcoin specific implementation would do! Just autoload it into your specific bitcoin client for you?

thisisit 9y ago

This is a good read. Count me on the same boat, thanks to the shitty Multibit wallet but I am not in a hurry to open the wallet yet. That said: > Four years ago, I was living in Hong Kong when a fellow journalist named Mike* and I decided to invest in bitcoin. I bought four while Mike went in for 40; I spent about $2,000 while he put in $15,000. Invest? Really? That is called speculation with the amount of money you can afford to lose. If you were investing you would go all in and track the progress and protect the password.

mrgordon 9y ago
What is the problem with Multibit? Just recovered a 2013 wallet a few days ago. Got a password on it or something?
- thisisit 9y ago
  It's the issue highlighted in the article. > Most users only need one wallet, but MultiBit practically demands that you set up multiple. On top of this, it allows you to add multiple passwords to each wallet, even though these aren't required. So it gets confusing fast. Then: > I tracked down an old version of the now discontinued software and discovered that there were multiple ways to restore wallets using MultiBit So you got links for the old version?
  - mrgordon 9y ago
    Mine didn't have a password (only worth a few $) but yeah that sucks I was able to just save the wallet (as a .dat I believe) and then inspect it with a text editor. The contents were my private key and the date the wallet was created. I then used my private key and my address to import the wallet into a modern program.

siculars 9y ago

I'd call myself a developer and a "computer" expert, especially relative to 99% of the people I know in real life. I've also been in the bitcoin game a long time. I run full bitcoin and monero nodes. Absolutely none of this is easy and frankly, at times it can be absolutely terrifying considering the sums of real dollars you may be transferring. To think that the market cap of Bitcoin and Crypto in general is where it is is actually shocking considering how absolutely UNfriendly the entire endeavor is from step 0 to actually buying, selling, transferring coins or buying goods and services. When using cryptocurrency becomes as easy as pumping gas or sending an email or depositing a check - watch out, because it inevitably will become that simple. It will make the run up we've seen in 2017 seem absolutely darling. I'm certain the usability will come. Personally, I'm waiting for Square Cash to figure it out and then integrate with Twitter.

cstejerean 9y ago
I don’t know, for buying and selling Coinbase seems to be pretty user friendly. You can sign up for an account, link it to your bank account and start trading in minutes. Not sure how much easier it could get.
- siculars 9y ago
  Right, I was gonna say that Coinbase is currently the best way to buy and sell coins today. I can say that as I have accounts on a number of exchanges. Still, Coinbase does not let you know that they also operate GDAX.com, where you can "make a market" and buy/sell for no fee. A buy/sell on Coinbase is basically a market order on GDAX.
  - syntheticcdo 9y ago
    Navigate to coinbase.com, scroll to bottom: Products - GDAX. Hardly a secret.
    - netsharc 9y ago
      Sigh... "You just had to go the basement bathroom past the sign that says beware of the leopard!" (To misquote Douglas Adams). I had to have a friend tell me that there's seamless transfer between yhr 2 systems, if they really wanted to let you know they would've had this trading capability as no. 4 in their "Getting Started"..

llazzaro 9y ago

Had a similar issue. when I realised that multibit was legacy I though I lost all. I recover priv. keys modifying the source code of multibit. pain in the ass with hemorrhoids

cryptodogemoon 9y ago

>People .. ridicule cryptocurrencies, dismissing bitcoin as a scam, a Ponzi scheme or a bubble. >Wealth disparity is at record levels and the ultrarich have cornered the market on every asset class, but with bitcoin, an entirely new economy has sprung into existence. That's the pitch for decentralized cryptocurrencies: They offer hope that there might be another, fairer way of doing things. The irony here is Bitcoin, like most other cryptocurrencies are structured similar to a pyramid scheme and highly favor existing capital to control the supply and exploiting users who join the network past a certain date where barrier to entry increases. They tell the story of acquiring this digital asset for a small capital sum, and simply passing it off to someone else for a greater sum. The intention is not utility but psychological exploitation of greater fools. http://bitcoin.stackexchange.com/questions/86/is-it-possible-to-estimate-the-gini-coefficient-for-bitcoins-and-if-the-trend-is http://bitcoin.stackexchange.com/questions/86/is-it-possible... http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 Best estimates (2014) are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent

pmorici 9y ago
That maybe true of Bitcoin Core today but that isn't the vision expressed in the original Bitcoin. The true spirit of Bitcoin lives on today in Bitcoin Cash.
- cryptodogemoon 9y ago
  What?.. All versions of Bitcoin share the exploitative inverse log curve for distribution and work input. Bitcoin cash further changed the difficulty algorithm to benefit ASIC miners during a very brief window of time. Fees are reduced, and bandwidth has increased but the same design flaws are shared from Satoshi's algorithm. So you're completely incorrect.
  - 9y ago

brailsafe 9y ago

I feel like Engadget could use their screen real-estate a bit more effectively ;) https://imgur.com/a/TwXwA https://imgur.com/a/TwXwA

ladberg 9y ago
That's your adblocker blocking the ad but failing to remove the surrounding frame.
- brailsafe 9y ago
  Interesting that you point that out. In a sense you're right, but actually that's the default tracking protection built into Firefox now. No adblocker required. I was actually referring — in jest, in case that wasn't clear — to the fact that the only content above the fold on this ultrawide display is a stretched image of Hong Kong.

hitekker 9y ago

This was a fun read although as others have pointed out, the end conclusions are not supported very well by, and maybe are irrelevant to, the article as a whole.

deleted 9y ago

[deleted]

tlb 9y ago

Are there good estimates of the amount of bitcoin lost every year due to carelessness? Based on many anecdotes like this, I fear it's pretty large. Bitcoin was supposed to be slightly inflationary, due to mining. But if a sufficient fraction is lost every year due to hardware failures and forgotten passwords, it will end up being deflationary. Someday (around log(1e6)/log(1+x) years from now, where x is the fraction lost every year), there'll be only 21 bitcoins left in the world, trading either at 0 or a number with 3 or 4 commas. [edit: fixed in/de-flation mixup]

LeoPanthera 9y ago
It would be a trivial fork to increase the amount that each bitcoin can be subdivided by, so if the currency does inflate a lot, liquidity can still be maintained.
- pavel_lishin 9y ago
  Is there such a thing as a trivial fork in the bitcoin world? You'd have to get buy-in for most of the developers, and most of the users too, or risk splitting into two currencies. Again.
coinqueror 9y ago
One could argue that the universe of avail bitcoins (those with known passwords) will asymptotically approach zero. Ie, there's a small chance of a user screwing up. And since there's no recourse, always a perpetual small chance of someone losing their bitcoins. Maybe Poissonian?
throwaway13337 9y ago
This would make bitcoin even more deflationary. Inflation is when a currency loses value. Less and less of something would mean it would gain value creating deflation.
- coinqueror 9y ago
  What recourse is there for bitcoin provider services that screw up? Ie, if one day Coinbase says something like, "sorry, we lost the password to one of our internal coin wallets due to technical error, and your 5.1 bitcoins are lost." I bet there's some clause in their terms that tries to shield them from this, but wonder how enforceable it would be. Ie, a regular bank presumably couldn't just say, "sorry we lost your $50k deposit due to technical error". They'd be liable.

Double_a_92 9y ago

And that's why i never put passwords or other keys on data that I need to keep safe (as in an archive e.g.). The chances of me messing something up and losing it forever is bigger then the chance of somebody actually steeling it.

graniter 9y ago

I can identify with the emotions in the article. I spent the better part of the day wrangling with an old version of MultiBit to get some bitcoin out of an old wallet. And I'm currently in process of trying to recover access to an old Coinbase account that I'm pretty sure has a few bitcoin in it. Part of the problem with all the security around cryptocurrencies is that it can be really hard to keep access and not lose them. So many passwords, two-factor authorizations, Authy tied to phone numbers, etc. I am not using nearly as much security on my bitcoin stuff now. I think the risk of getting hacked is lower than the risk of me losing access.

Fredej 9y ago
Exactly. I've made this point before: The least appealing thing about crypto to me is one of the selling points - That I can be my own bank. I don't trust myself nearly enough to be my own bank. I want to pay someone I trust to take care of that for me. I don't want hacking or forgetting a password to be something that in any way affects my holdings.
swah 9y ago
I actually have no idea how to recover Authy/2FA if my phone is taken away..
- letsgetphysITal 9y ago
  Authy keep the seed so you can recover the 2FA token providing you can still log in to your Authy account. That's why I use Google Authenticator. I don't want the seed kept (or even known) by a third party. I'll keep my own backup far, far away from any device which also can be used to recover account credentials.
  - burger_moon 9y ago
    If you use Gemini exchange I believe they only support Authy, at least that's what I had to use. Which is a little annoying having to use both Authy and Google Authenticator depending on which exchange I'm using.

HN15718653 9y ago

I'm still confused (starting to fill with regret?) about bitcoin. I remember lively discussions with friends circa 2012. None of us bought. We'd be centi-millionaires? Is HN now full of mega-millionaires, since the community is full of tech-savvy early adopters? Raise your hand if you made over a million. Raise both hands if you've made over 10 million.

maxencecornet 9y ago
>I remember lively discussions with friends circa 2012. None of us bought. We'd be centi-millionaires? Most people talked about it, few did buy. But the feeling when you've bought and lost the ability to recover your wallet is even worse then not having bought some ! I actually did buy some, but lost my wallet, like so many I know my adress, and the coins are still there, but I can't do anything about it, not idea where my backup wallet.dat is.. I mean, it's pretty tough to keep track of your digital assets for years, while your mind in thinking about work, friends ect..
Grangar 9y ago
I sold almost all my over 2000 coins back in 2011. No one who has bought big back then has held on all this time, the only new crypto millionaires are those who find old wallets just now.
joshstrange 9y ago
Ehh, I tell this story often enough when BTC comes up but here it goes: I mined (on a CPU) 100 BTC solo back when it was first released. They weren't worth even a $1 at that time. Here I am now and I doubt I even still have the hard drive that I mined them on and if I did have it I have formatted it many times over. Those BTC are lost for forever. Whenever I feel a pang of anger/guilt I just remind myself that I would have sold when BTC hit $8 if not even sooner than that and in some ways that would be worse than what really happened.
twayamznacct 9y ago
Thoughts like these are what have really reduced my will to live. If I had made a simple decision back then there's a good chance I'd never have to waste my life working again. I could have been freed by now, to live a life dedicated to whatever I wanted to do, whenever I wanted to do it.

Shoothe 9y ago

Ha, funny, just this Monday I had to recover wallet.dat from a slightly corrupted HDD drive. What I needed is just the private key bytes (32), unfortunately the disk was unreadable. What helped was RAW access to data on disk coupled with this little tool that scans for private key signatures: https://www.makomk.com/gitweb/?p=bitcoin-wallet-recover.git;a=summary https://www.makomk.com/gitweb/?p=bitcoin-wallet-recover.git;... Then of course the bytes had to be converted to addresses to check which one had the money (and if I found it) and then to WIF to import in Electrum. After half a day of stress I did numerous copies now.

graniter 9y ago

I wonder, how many of us here actually understand Bitcoin and cryptocurrencies? I know several of us probably use them, but even amongst the tech-savy, there seem to be very few who actually understand it, and even fewer of those who participate in the programming of it. I understand the descriptions of blockchains and it's advantages, but I've never looked at any code. And I realize that anyone could in theory look at the code and participate, but it's out of the reach of most programmers I think, let alone regular people. So while on the one hand it seems to be a great "power to the people" currency option, it's really still in the hands of a few.

nolemurs 9y ago
> but it's out of the reach of most programmers It's actually really not all that difficult. There are lots of details, and understanding it all end to end is definitely a task most people will never do, but the issue is simply one of effort and motivation, not of fundamental difficulty.
ric2b 9y ago
The white-paper is about 10 pages long and completely approachable to programmers with some knowledge of hashing functions and public-key cryptography. The biggest challenge is understanding how all the pieces fit together, the pieces themselves aren't any kind of ground-breaking computer science.

JepZ 9y ago

Anybody knows a good choice for a long-living bitcoin wallet software nowadays (cold-storage)? Currently I am considering Electrum but I have no idead if thats a smart choice. I do not require a GUI, but it should be maintained for a while (so a large user base should help).

StavrosK 9y ago
The wallet doesn't matter, as long as you have a BIP39-compatible seed (which you can generate with many utilities), any software (or hardware) wallet can be used.
pault 9y ago
As far as I know the best option is still printing a newly created address and private key on archive quality paper and putting it in a bank safe deposit box. If you don't ever spend from that address the key should be safe. Best practice is to use an airgapped computer running a live CD so the key will never have been on a network. It should be easy to find tutorials on paper wallets. It's not user friendly for sure, but if you want to protect a large amount of Bitcoin it's the best option.
andymal 9y ago
Look into the Ledger Nano S. Supports each BTC chain, other cryptos, and is super easy to use IMO. Uses a seed to create the wallet so you can drop that in a safe deposit box and restore if anything ever happens to the hardware wallet. Edit: this is the hardware version of storing cryptocurrencies.

BLanen 9y ago

People critical of increasing wealth disparity vouching for bitcoin is pretty ironic and just highly stupid.

ric2b 9y ago
Why is that? Simply because of the current distribution? That doesn't matter much, what matters is what the system incentivizes. Fiat incentivizes bailouts and devaluing poor people's savings by printing (or QE'ing) money into gigantic financial middle-men.
- drngdds 9y ago
  >poor people's savings I've got some bad news about poverty for you, buddy

nolemurs 9y ago

Weird choices all around for how to solve this problem. The author of the post could have saved himself a lot of trouble by just focusing on the key backup files and moving the keys to a bitcoin client like electrum that doesn't require a full blockchain sync.

jakewins 9y ago

Someone else might find this tool I wrote useful, it finds BTC wallets by scanning raw block devices: https://github.com/jakewins/findbtc https://github.com/jakewins/findbtc I deleted 26BTC a while back when reinstalling a laptop, because they were effectively worthless. A few years later, they weren't anymore, so I wrote this to get them back. As long as the file system isn't encrypted, it scans the raw bytes on the disk to find remnants of wallets. It also unzips compressed files it finds and does the same scanning in there.

joshstrange 9y ago
How do you build this? I see it's go and I have that installed on my laptop but I'm not familiar with the commands to run to build it and the last 15min or so of googling around have been fruitless.
- jakewins 9y ago
  If you have Go installed as per https://golang.org/doc/install https://golang.org/doc/install you can build/install this project like this: > go install github.com/jakewins/findbtc I'll update the readme! If that's giving you trouble, I can cross compile it here and upload a binary to github for you if you tell me your OS and processor - although since this is potentially sensitive software, I'd advice building it from source
- deleted 9y ago
  [deleted]
alinspired 9y ago
I've tried your test wallet and got an offset for file location - any hints on how to get the wallet's content, with dd i presume?
- jakewins 9y ago
  Yeah, the tool doesn't help much past this, it'll just tell you where the raw bytes are. Basically, what is at that offset is (remnants of) a Berkeley DB file; you'll need manually do the forensic work to get the key out of it past that. Alternatively, there are services that will recover locked/corrupted wallet files I think, so you could extract a big blob around that byte offset and find someone that will do the forensic work for you.

sireat 9y ago

This is very similar to what I had to go through to recover a few BTC in my old Multibit wallets from 2013 this summer. I had the same problem of underpaying for the transaction because I had to sweep many small wallets. There are many old wallets around which contain amounts too small to recover. Let's say you have 100 addresses each containing $1, it is no longer economical to sweep them into a single address. Originally in 2011-2013 it was considered a good practice to create many different addresses for receiving.