A Man Lost His Password To An Encrypted File Which Contained $300,000 Of Bitcoin, But A Cryptographer Successfully Cracked It And Recovered The Bitcoin

April 7, 2020 / by Crypto.IQ

In 2016, during the depths of a long crypto bear market, a man purchased $10,000-$15,000 of Bitcoin (BTC), and placed the private keys in an encrypted file. Eventually he lost the password to the encrypted file. The value of his Bitcoin (BTC) rose to $300,000 and usually that would be the end of a sad Bitcoin (BTC) story. However, this story has a happy ending.

The man stumbled across a paper by Mike Stay, a professional cryptographer who is skilled in breaking encrypted files. The man proceeded to contact Stay and asked him if he could break through the file’s encryption.

Mike Stay originally estimated that it would take a Graphics Processing Unit (GPU) farm 1 year to break the encryption, since there would be 2^73 keys to test and this operation would cost $100,000. To Mike Stay’s shock, the man said yes, since the Bitcoin (BTC) was worth $300,000.

However, the man still had the original laptop and knew the exact time the file was encrypted. That greatly lowered the entropy of the encryption, meaning it was far easier to crack.

That being said, Mike Stay still had to go through numerous complex steps, including reworking all of his algorithms and fixing errors in his previous work and properly setting up the GPU farm data feeds.

Ultimately, once the algorithms were working correctly it only took 1 day to crack the encrypted file and recover the Bitcoin (BTC).

Thus, this story is one of the only examples of someone recovering Bitcoin (BTC) private keys after losing the password to an encrypted file, and perhaps this story gives hope to anyone who is in a similar situation.

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