For Dave Bitcoin, the
alias of the software architect that hacks people’s cryptocurrrency passwords,
the price surge of Ethereum’s blockchain token ether has generated a
significant amount of work; work that wouldn’t have been steered his way
without his focus on developing trust.
And just to be clear, Dave Bitcoin hacks people’s passwords with their
permission. He runs the website Wallet Recovery Services,
which recovers people’s lost or forgotten passwords by brute force decryption – that
is, using a computer program to try millions of passwords in a short amount of
time.
He provides the
service for bitcoin, litecoin and most other alternative cryptocurrency
wallets, and in December, he began decrypting Ethereum pre-sale wallets.
"I love a
challenge," said Dave Bitcoin, who’s pseudonym remains from the days when
it was unclear if cryptocurrency was legal.
Dave Bitcoin told
CoinDesk:
"Initially, back in
mid-2013, I just wanted to understand the cryptography used by bitcoin and the
formats of encryption in the wallets. I realized that I was able to potentially
help people who have forgotten their wallet passwords, and it grew from
there."
Dave Bitcoin has
worked with more than 1,000 people since he launched the service, most in need
of password recovery but a few that wanted deleted wallet files recovered. His
success rate is about 30%, but it’s a rate that varies drastically based on how
much information a client gives.
Since January, Dave
Bitcoin's Ethereum business has exploded, coinciding with the 1000% price
increase. Today, about 50% of his business is decrypting Ethereum wallets, 40%
is bitcoin related and the remaining 10% is recovering altcoin wallets, like
litecoin or dogecoin.
Dave Bitcoin charges
20% of the amount in the wallet, which is a risk since typically he doesn’t
know how much is in the wallet before he decrypts it.
"I try to help
everyone, even if the money involved in the wallets doesn’t really make
financial sense," Dave Bitcoin said.
Trust business
This emphasis on customer
service is necessary because he’s trying to build a trusted offering with
a service that’s a bit intimidating.
To start, consumers
must hand over what they think their password could be. Since many consumers
use the same or variations of the same password for multiple accounts, this can
be worrisome.
But after Dave unlocks
a wallet and takes his cut, he sends an email explaining to clients that they
should change or stop using any of the passwords they disclosed to him.
The software Dave uses
is configurable but if the password is particularly unusual, a custom code is
needed on a per-client basis to decrypt.
Dave Bitcoin’s
software runs on high-performance computers, generally Amazon Web Services
(AWS) computers. Each computer node pulls a subset of the password candidates
from a high-speed online database and processes them, executing the appropriate
cryptographic primitive operations to examine the candidate passwords to
determine the correct password.
Dave uses both Linux
and Windows nodes on AWS.
“I can start up one
node on AWS or 100 or more, just with the click of a button,” he said.
"But of course, running these computers does come at a financial cost, so
I need to balance the cost of the decryption versus the likelihood of
success."
The software is also
capable of using GPU cards for more common wallet types like those offered by
Bitcoin Core, speeding up the recovery process.
With several of his
coded algorithms, the software can perform millions of decryption attempts per
second.
"It is a fun
process, and nothing is more enjoyable than helping someone recover their
bitcoins or ether or altcoins," Dave said, but the financial reward hasn’t
been enough for him to give up his day job as a software architect.
Value of reputation
After some research,
Wallet Recovery Services seems the only offering for cryptocurrency recovery
services. Perhaps due to a lack of other options, Dave Bitcoin has built
up trust over the past several years.
Stephanie Murphy, the host of the podcast "Let’s Talk Bitcoin"
and Ludvig Oberg, co-founder of Swedish bitcoin exchange, Safello have used the service. And bitcoin wallet provider Blockchain redirects
their clients looking for password recovery to Dave Bitcoin.
"My reputation is
very important to me, and I act honestly with my clients at all times," he
said. "Trust is a fragile thing, and I am aware that I need to remain
squeaky clean so that I do not lose the respect of the crypto-community."
This hits at a core
hurdle for bitcoin and other cryptocurrency startups interfacing with
consumer’s money. There have been numerous bitcoin companies, for instance Mt
Gox, that have failed, taking consumer’s money with them, and other businesses
that turned out to be scam operations running away with the money invested by
customers.
This has brought the
heat from the Consumer Finance Protection Bureau (CFPB) onto the industry. The
CFPB has been increasing oversight on bitcoin services for several years,
issuing an advisory on the risks possed by virtual currency in August 2014.
One of the risks
mentioned is the absence of private key or password recovery options.
But educational
organization Consumer’s Research has actually advocated for bitcoin in this
regard, saying bitcoin could boost consumer protections because the protocol
makes it possible for people to take security into their own hands instead of
relying on third parties.
But it will be a
challenge getting consumers to switch over to more accountable systems when
they’re used to insurance and other protections.
As Dave Bitcoin said
and his service proves:
"It is still early
days in the cryptocurrency world."
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