With Bitcoin soaring in value and newspapers publishing reams of explanatory articles about Blockchain, it is becoming obvious that this technology is on the verge of crossing into the mainstream.
We have also noticed a steadily increasing flow of news stories of ordinary people who have been locked out of their now lifechanging Bitcoin fortunes due to discarded hard drives or lost passwords.
While most of the stories are heartbreaking tales of ordinary people struggling to meet day to day expenses while they have a steadily increasing Bitcoin fortune just out of their reach, the fact that they cannot unlock their fortunes, is actually fantastic news.
1. Their inability for Bitcoin holders to access their fortunes when they lose or misplace their credentials is not a design fault with the Blockchain at all but a function of misfortune or carelessness. It is no different to taking a diamond engagement ring in the surf and losing it in the waves – devastating but hardly the ocean’s fault.
2. Following on from the diamond ring analogy – if someone else found the ring they would have a very nice little windfall that they could monetise with no issues. This is distinctly different to the Bitcoin situation in that the coins haven’t been lost. They are still 100% securely held in the account of the legal owner – remember the Blockchain is an immutable (unchangeable), transparent ledger and as such ownership of the Bitcoin is without question.
3. There is nearly $140 Billion in Bitcoin that is inaccessible. That is a lot of incentive for hackers or legitimate Bitcoin recovery companies to find a way to break into the Blockchain. Yet, despite a prize on par with the annual GDP of Ukraine being on offer, nobody has been able to recover or extract the lost Bitcoin from the Blockchain.
Basically, inaccessible Bitcoin fortunes are clear evidence of the best of breed security that the Blockchain has.
Where this begins to get extremely interesting is when you replace Bitcoin (basically a digital version of gold) with Digital Assets (such as digital artwork, music, video, and even intellectual property). Digital assets all have a degree of value and as such it is desirable to have a way to store them securely – however centralised or analogue systems are simply not fit for purpose in this regard.
Blockchain on the other hand is the perfect structure to solve this security and storage issue as it also can facilitate transactions between people thereby enabling the safe and secure movement of digital assets in exchange for currency. As you can see – when you follow this line of thought a whole new world of possibilities opens.
What should you do if you have Bitcoin and you don’t want to have it become inaccessible?
The best answers we can offer at this point is to either use paper wallets (https://news.bitcoin.com/how-to-set-up-bitcoin-paper-wallet/) or alternatively think about what you would do with a pile of Bearer Bonds (you’d likely invest in a safety deposit box with a bank or place it into the custody of your lawyer).
Overall – lost Bitcoin fortunes, while causing us to wince as we read them, are a fantastic measure of the security of the Blockchain and the promising future lying ahead for anything that requires secure transferring and storing of information.
If you want to know more about the world of Blockchain to see what all the fuss is about, or are interested in understanding our Nordic-built Blockchain, reach out to us HERE.
Author: Peter Coco, CEO Vleppo