Amid increasing cases of theft and fraud, lost coins, and lost private keys, a new breed of business is taking shape in the virtual cryptocurrency world. Individuals as well as companies are hunting for such lost coins, private keys, and forgotten passwords. Welcome to the world of crypto hunters.
Where Did My Digital Assets Go?
The Wall Street Journal quotes a report by Chainalysis - a blockchain-analysis firm based in New York City - that around 20 percent (3.7 million) of all bitcoins are now missing. These lost coins are estimated to be worth $20 to $25 billion.
The most common issue that leads to lost cryptocoins is the individual holder losing access to their cryptocurrency wallets or vaults. The digital assets in such wallets are kept secure by the use of a unique private key, which is a long string of alphanumeric characters that is similar to a bank PIN, or to a password for accessing an internet banking account. Since cryptocurrencies and wallets work in a decentralized ecosystem, there is no central authority or service provider to reset or re-issue the key to the original crypto holders. It remains the sole responsibility of the individual to keep the private key safe and accessible only to them. Most individuals forget or misplace this private key, rendering their digital wallet inaccessible. Around 300 such wallets with lost access are estimated to contain anywhere between 1,000 and 10,000 bitcoins each, Chainalysis estimates.
Other cases of lost digital coins are attributed to increasing number of scams, hacks and thefts. (See also, Protect Your Bitcoins Against Theft and Hacks.)
Who Are The Crypto Hunters?
With the lost bitcoin bounty estimated to exceed $20 billion, a new breed of digital entities and individuals, called crypto hunters, is emerging to help with the complex task of recovering thhis digital treasure. These crypto hunters work with both cryptocurrency holders and law enforcement agencies to search and recover misplaced or inaccessible assets.
Claiming to be experts in “breaking-into” digital wallets, crypto hunters use anything and everything to accomplish the task. That includes the use of modern supercomputers to crack private keys and even using mental practices such as hypnotherapy on the wallet holders to help them reunite with their lost cryptocurrency.
Crypto hunters offering their services online typically seek basic details, like the last remembered private key and other possible details which individuals may use in creating their private keys (like date of birth, pet’s name and favorite author). Crypto hunters then run these basic data points through their self-designed computer programs, and try to create hundreds and thousands of possible combinations which then are used one at a time in an attempt to break the secure keys of the wallets.
Few technology enthusiasts are also attempting the do-it-yourself (DIY) approach. The Financial Times quotes the case of Irish entrepreneur Youssef Sarhan, who taught himself code in order to write a program to test tens of millions of password combinations. At about $10,000, his returns are “not life-changing — but certainly year-changing”.
It’s not only tech-savvy computer programmers who are in the game. The marketplace also has a significant presence of so-called “crypto-hypnotists,” who offer their mind-management services with claims to recover passwords by unlocking the subconscious minds of the individual through techniques like hypnotherapy. Essentially, they attempt to help the holder mentally recover where and what they may have written down as their private key.
Crypto hunters also offer their services to track down the trails of cryptocurrency thefts and scams. They work with law agencies and crypto participants to identify where the stolen coins may have been transferred, and such information can be vital to nullify the transactions linked to theft or block those wallets completely.
While many cryptocurrency exchanges offer “secure” custodian services, they are often targeted by hackers to siphon off digital coins. This has opened a new high-demand market for secure crypto vaults which act as third-party custodians of digital holdings as well as for securing private wallett keys. (See also, Bitcoin Price Sinks Amid Hack Attempt on Cryptocurrency Exchange Binance.)
How Much Does It Cost?
The majority of such crypto hunting services charges in cryptocurrencies. Prices vary, and depend upon the success rate of recovery. Both computer-based recovery service providers and crypto-hypnotists charge an upfront fixed cost, plus a percentage of the recovered amount, typically ranging from 5 to 10 percent. Crypto-hypnotists also charge a fixed amount on a per-session basis, depending upon how many hours/sessions are taken by the individual to recover the lost details.
While a lot of online services claim to offer help for a fee, care should be taken to ensure that one deals with authentic crypto hunters. The process requires revealing a few key details to the service providers which may be prone to misuse. It is advisable to deal with only those who operate in the real-world with verified identity, rather than trusting the flashing ads in the virtual world that may not have any street presence.
Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.