Home Cryptocurrency News Bitcoin A Fifth of All Bitcoin Is Missing. These Crypto Hunters Can Help

A Fifth of All Bitcoin Is Missing. These Crypto Hunters Can Help

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With bitcoin trading around $6,000, a waylaid slip of paper, misplaced USB drive or damaged hard drive containing a password could be the key to a small fortune.


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Think of them as the metal detectors of the digital age. Instead of combing beaches for gold, these experts use everything from supercomputers to hypnotherapy to reunite people with their lost cryptocurrency.

According to Chainalysis, a blockchain-analysis firm based in New York City, about a fifth of all bitcoin—around $20 billion—is lost, most of it permanently. When people purchase bitcoin, the details of their transactions are stored in software called a “wallet,” which they can unlock with a personal-identification number. Unlike an ATM PIN, this password can’t be recovered easily, since there is no bank to retrieve it.

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In the early 2010s, when bitcoin was trading under $10, some investors were careless with their PINs. Now that the currency is trading around $6,000, a waylaid slip of paper, misplaced USB drive or damaged hard drive containing a password could be the key to a small fortune. (Bitcoin makes up the majority of missing cryptocurrency because it existed before the recent explosion in value, Chainalysis said.)

To the rescue: A small group of crypto hunters. Here, what they offer, how successful they are and what they cost.

THE DECODER

Hunter: Wallet Recovery Services, an online company that recovers passwords and corrupted cryptocurrency wallets. The firm’s four employees, who are anonymous, communicate with the outside world by email using the pseudonym Dave Bitcoin.

Method: “A brute-force attempt at decryption,” Dave Bitcoin said. The firm uses specialized software to generate and test millions of potential passwords, essentially breaking into a client’s digital wallet.

Price: 20% of what’s recovered. Dave Bitcoin takes the fee from the recovered currency, then tells the client the password.

Time: Months

Success Rate: Around 30%, depending on how much information the client has. “They might remember that the password was a seven-character French word with a two-digit number suffix,” Dave Bitcoin said. “This type of information is normally more than sufficient for the recovery of their money.”

Biggest Obstacle: Memory. “Many of my customers misunderstand the difficulty of being your own bank, and how hard it is to have processes so that you can remember/preserve passwords and wallets even many years down the track,” Dave Bitcoin said.

THE HYPNOTIST

Hunter: Jason Miller, a hypnotist in Greenville, S.C., who is certified by the International Certification Board of Clinical Hypnotherapists

Method: Through hypnosis, Miller helps patients remember their password or the location of their hard drives—much as he’d help them recover a lost wedding ring. “Everybody has a photographic memory,” Miller said. “With skilled hypnotic regression, you can access that photograph.”

Price: 0.5 bitcoin upfront, plus 5% of the amount recovered. (Clients either buy more bitcoin or pay from other bitcoin accounts; Miller also accepts Ethereum and litecoin.) Miller never has direct access to the digital currency, “but usually when [clients] find their lost bitcoin, they’re so excited that they have no problem sending the commission on that reward,” he said.

Time: Days or weeks for the memory to emerge from the subconscious. Clients typically attend three weekly sessions via Skype. “I’ve also gotten emails two months later saying they finally found where they put it,” Miller said.

Biggest Obstacle: Faith. “If someone comes in and tells me they don’t really believe in hypnosis, I say, ‘I hope you find some other way to get into your account because I won’t take your case,’” Miller said.

Success Rate: 50% of the cases Miller accepts. He says he gets about a dozen inquiries a year and accepts fewer than half.

THE DATA WHISPERER

Hunter: Tal Haksim, CEO and founder of WeRecoverData, a New York City-based data recovery service that says it has worked with governmental agencies and large technology companies.

Method: The firm employs the same technology it uses to recover other files from deleted, corrupted or partially overwritten data. WeRecoverData has also used a technique borrowed from hackers: Many people record their PINs in a text file, allowing hackers—or data recovery services—to see the password in the file’s raw data.

Cost: $500 to $2,500, depending on the condition of the corrupted file.

Time: A couple of days

Success Rate: More than 95%

Biggest Obstacle: Trust. Online forums are full of stories of users handing over their corrupted hard drive to data recovery services—only to have the service return the data without the bitcoin. WeRecoverData says that it runs background checks on its engineers, and only the engineer working with the client has access to his or her data.

THE CRIMESTOPPER

Hunter: Rather than working with individual investors, Chainalysis locates cryptocurrency for the FBI and other law enforcement agencies to stop crypto crime. “Maybe you could tell your readers that we don’t help people find lost bitcoin,” said Kim Grauer, senior economist.

Method: Chainalysis has developed software programs that analyze the blockchain, the digital ledger that records cryptocurrency transactions

Cost: “More than you can afford,” Grauer said. Since the beginning of 2016, the FBI has awarded over $750,000 worth of contracts to Chainalysis, according to public records.

Time: Seconds.

Success Rate: All bitcoin transactions are visible on the blockchain, but some buyers and sellers mask their identity. Chainalysis said it can identify at least one counterparty for 80% of all bitcoin transactions.

Biggest Obstacle: Privacy. Some cryptocurrency owners who want to remain anonymous—including criminals—use software called a “mixer” that obscures their identities on the blockchain. Others forgo bitcoin altogether and invest in private cryptocurrencies such as Monero. “As long as the criminals cash out on an exchange, there are ways to unmask them,” Grauer said.

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