Bitcoin

How Hackers Finally Gain Access to $3 Million Worth of Bitcoin After 11 Years

Digital wallets offer a convenient way to store cryptocurrency, but losing access can be a significant setback, especially when substantial sums are involved. This is precisely what transpired for one anonymous individual who misplaced the password to a Bitcoin wallet containing 43.6 BTC for 11 years, a holding worth approximately $3 million at the time of writing.

A Password Predicament

The owner’s predicament stemmed from the decision to utilize a password generator called Roboform to create a complex password for their Bitcoin wallet. While password generators are generally recommended for enhanced security, a critical flaw in the older version of Roboform used by the owner compromised this approach.

Unlike ideal password generators that produce entirely random outputs, this specific version exhibited a determinism, meaning it could recreate the same password given identical conditions.

Ironically, the owner’s heightened security concerns during the password creation contributed to the situation. Fearing unauthorized access through their computer, the owner opted not to store the password electronically alongside the encrypted wallet file. Unfortunately, this also meant the password wasn’t preserved elsewhere, leaving them no way to regain access.

Enter the Hacking Expert

As explained in a YouTube video, the owner’s predicament remained unresolved for several years until they learned about electrical engineer Joe Grand, also known online as “Kingpin.”

In 2022, Grand garnered recognition within the cryptocurrency community for successfully assisting another individual in recovering access to a lost $2 million crypto holding. The owner, recognizing Grand’s expertise, contacted him for assistance.

After accepting the case, Grand meticulously analyzed the situation. He identified the vulnerability in the outdated Roboform software and formulated a strategy to exploit it.

In a perfect scenario, password generators produce unique outputs for each request. However, the flaw in Roboform allowed Grand, through trial and error, to essentially rewind time to 2013, the year the password was created.

Collaboration and a Touch of Luck

Grand wasn’t alone in this endeavor. He collaborated with a colleague, Bruno, to generate potential passwords within the narrowed timeframe created by the time manipulation.

This meticulous approach, coupled with a degree of luck as Grand himself admitted, ultimately yielded success. By recreating the specific conditions under which the original password was generated, they were able to crack the code and unlock the Bitcoin wallet.

This incident serves as a valuable reminder of the importance of robust password management practices. While password generators offer a layer of security, it’s crucial to ensure they utilize entirely random outputs and implement secure storage solutions for the generated passwords.

For users who may possess older versions of password management software, this case highlights the potential risks and underscores the importance of updating to current versions that address such vulnerabilities.

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Solomon Odunayo

Solomon is a trader, crypto enthusiast, and analyst with over four years of experience in the industry. He strongly believes that crypto assets and the blockchain will continue to gain prominence. At TimesTabloid.com, he focuses on news, articles with deep analysis of blockchain projects, and technical analysis of crypto trading pairs.