Let me explain my reaction to the news that a San Francisco-based programmer has nearly £ 200million in bitcoin but can’t remember the password. According to the New York Times, Stefan Thomas has only two more guesses to access the keys to a digital wallet containing his fortune. Otherwise, he loses the lot.
I think there was a brief moment where I found it hilarious. Then I found it too painful to think about it. Now I have reached a state of acceptance.
This is the kind of Sliding doors moment that we all fear – and if we never met our partner, and if we took that plane, what would happen (in my case) if I had slipped while jumping off a ledge into a rock pool. Life could have been so different.
Accidents happen, especially for bitcoin investors. It is estimated that 20% of digital currency is blocked – held, for example, by people who cannot remember how to access it. I thought these guys were against the right to be forgotten?
A colleague at the Financial Times wisely wrote the passphrase for his bitcoin, which is now worth a few thousand pounds. Unfortunately, he wrote it wrong. As long as he doesn’t write things badly in the FT, he’ll be fine. But other forgetful bitcoiners will bang their heads against their Tesla prospectuses, as the dollar value of their currency has more than tripled in the past year. A Welsh computer scientist claims he stashed a laptop with £ 230million worth of bitcoin and spent eight years asking the council for permission to search its landfill.
There are serious implications for bitcoin, which wants to be a store of value, but has a clear focus on the storage part. Remember, this is the most environmentally damaging currency, with a larger carbon footprint than Sri Lanka, due to the computing power required to create each token. If Silicon Valley wanted to pollute the world without creating anything of usable value, it should have copied Northern Ireland’s cash-for-ash system.
There are broader lessons for digital evangelists. Internet libertarians envision that people will flourish when regulatory guardrails are rejected and inefficient humans are replaced by automated systems.
But what if humans are useful enough? Go empty-handed and beaten at a bank branch, and cashiers will find a way to reconnect you with your overdraft. While, even if you could identify the mysterious founder of Bitcoin, Satoshi Nakamoto, he couldn’t help you gain access to your digital wallet. For a species that forgets things, this is suboptimal.
The other lesson concerns genius. Silicon Valley loves a genius, often identified by the date they invested in X early or how many employees they were in Y. But maybe the people who invested in Facebook early weren’t geniuses – they were just lucky. Maybe the people who go viral stars aren’t the funniest or the best singers.
Password amnesiac, Mr. Thomas received his 7,002 bitcoins for making a video – a task millions of people could have accomplished. He could be worth as much as Ed Sheeran or become the Internet version of the Fifth Beatle. But that wouldn’t say much about his ability or his contribution to society.
“If you can make a bunch of all your winnings / And risk it on a pitch-and-toss round / And lose, and start over from your beginnings / And never breathe a word of your loss.” . . Rudyard Kipling wrote. No one can really take this advice. No one can treat triumph and disaster the same, although luck often decides what we end up with.
All we can do is have compassion for these people who never made a fortune, who never fell in love, who got sick. Four years of Donald Trump surely taught America that wealth does not correlate with moral status. If bitcoin is teaching Silicon Valley the importance of luck, then maybe it will have created real value after all.