Vitalik Buterin Calls for Solution to Lost Crypto

According to Ethereum’s co-founder (ETH), Vitalik Buterin, theft is often discussed when it comes to crypto security. However, he pointed out that there are also many losses due to negligence and accidents. Wallet solutions should also address these risks.

In a recent post on X, Buterin highlighted that many people do not lose their crypto due to theft, but due to actual loss cases, such as forgotten passwords, software errors, or lost devices. Crypto fraud gets a lot of attention, especially after the recent theft of $1.46 billion at Bybit (which covered the loss with loans, whale deposits, and Ether purchases). Buterin emphasizes that real losses in crypto are often ignored in discussions about security. He argues that robust wallet security should not only protect against hacks but also provide solutions for all forms of loss.

Tragic story of lost Bitcoin

The story of James Howells is one of the most famous and tragic examples of crypto loss. In 2013, his hard drive containing 8000 Bitcoin (BTC) – now worth hundreds of millions of pounds – was accidentally thrown away by his ex-partner. Presumably, the hard drive ended up at a landfill site of the Newport city council. Despite legal steps, Howells has never managed to find the device.

The landfill site will close within two years, and Howells is now considering his options: to file an appeal or try to buy the site with the help of investors. Recovering his digital wallets has thus become a life mission for Howells. He stated:

“This fight is my full-time job – I won’t stop until I have my £620 million in Bitcoin back.”

Howells’ situation is extreme, but it does underline a common problem. Many people lose their crypto due to negligence or accidents. About 20% of all Bitcoin mined so far is currently considered lost, according to a report by Chainalysis from 2020. This is because the Bitcoin is stuck in wallets that have not been used for years.

Success stories just a small part

There are, however, a few rare success stories of recovery. A notable example is that of Stefan Thomas, who for 11 years could not access his IronKey hard drive, which held 7002 BTC, because he had forgotten his password. He eventually managed to recover his Bitcoin with the help of hacker Joe Grand and security researcher Bruno Requião da Cunha. They developed a unique method to crack the password by analyzing the software that had generated it.

However, recovering lost crypto remains extremely difficult, despite the occasional successes. As Buterin points out, the industry should not only focus on preventing hacks but also provide better recovery options for users who lose their crypto due to accidents or human errors.