Called a savior by many, the man who goes by the pseudonym “Dave Bitcoin”, is the creator of Wallet Recovery Services. Dave has been recovering many wallets for people who had lost their keys. Since its start in 2013, the inquiries have created a massive opportunity for this new part of the crypto world to expand, and Dave’s endeavors of creating a trusted platform for desperate people to recover their long-lost wallets have been fruitful. In this interview, Dave talks us through, the process of recovering a wallet, fraudulent attempts by frauds, etc. Please take a look.
Interview Date : 25th February 2021
Why was Wallet Recovery Services created?
It started back around 2013 when I got interested in Bitcoin and blockchain technology. A lot of the conversations were happening on the forums, especially BitcoinTalk. I noticed people posting about losing their passwords and getting locked out of their wallets. Back then, Bitcoin wasn’t so valuable, so losing access to a wallet was not usually a huge financial loss. But I thought I could help people unlock their wallets and at the same time learn a bit more about wallet encryption. I had a background in software development before I came into this field so I put together some code to search for passwords. To begin with, it was just a hobby and a learning experience, I didn’t set out to build a business around it. Only later after I had some success, people would post feedback on the forums, and I would get more inquiries. That is how it evolved into a business. It was born out of a need from the people in the space. Every now and then the work gets very busy, so I have a partner who helps out equally with the business.
Have you done paid advertising?
I have never taken out paid advertising, and it can be quite difficult to do in the mainstream channels. Google for example has limited who can advertise crypto services, because they are a bit wary about scams, etc. However, you can still find on the BitcoinTalk forum the original thread where I announced the availability of the service. That was when I decided to give the service its name and start operating as a business. In those days, it got known just through word of mouth and people posting about it on forums. That’s how people usually discover the service.
Have you lost your keys?
I have never lost the keys to my wallets and have not had to crack my own password. I’ve thought about it when I’m writing my passwords down. I think “will I be able to find that if I lose it?”, but still choose passwords that would be quite difficult for me to recreate.
Is it hard to do recoveries?
There are a number of factors. Early on, there was primarily one type of wallet called the Bitcoin Core wallet and that is all I worked on at first. But nowadays, there are so many different types of wallets, and I try to implement support for as many as I can. So, step one is to figure out if I support the type of wallet and have enough information from the customer to proceed further. The next step is setting up a search for the password, and that really comes down to getting good ideas about potential passwords from the customer. For example, what sort of patterns they repeat, what kind of words they commonly use, etc. And then, by doing a very intelligent search, you try to figure out what the correct password is. So, that really is the key. It is all about how smart you can be when you’re searching for a password as opposed to just trying every possible character combination through brute force.
Do you use brute force to find passwords?
There’s this misconception that I brute-force passwords. People assume that one can try every possible password and I’ll eventually find the right one. If somebody used a very short password containing say 6 or fewer characters, then possibly you could brute force that for some wallets. However, anything more than that is impossible for most wallets.
Have there been customers inquiring and suddenly remembered through the process?
Yes, there have been a few times where somebody will send a list of possible passwords, and I’ll fail to find a solution. So, I’ll go back to them and say “can you think of more ideas, such as names you use or dates, for example?”. That sometimes jogs their memory and they get their wallets back.
Are there people who have tried to hack other people’s wallets?
I have always had a policy not to work on wallets where the customer does not have good ideas about the password. Quite a few people write in and say “here’s a wallet and I have absolutely no idea what the password is”. Generally, I will not work on those inquiries because there’s a possibility it may be a stolen wallet. If I do work on it and find the password is very different from their suggestions, I will ask “do you have proof of the wallet being yours?”. Through this, I can try to establish ownership or some deeper knowledge of the wallet’s history.
What is the most common suspicious request?
A common request I get is from customers who purchase a wallet then contact me saying they’ve located their wallet from many years ago. So not exactly fraudulent but a little bit of an untruth. There are services who acquire wallets and make them available for sale, so they repeatedly sell the same wallet to others. Such wallet buyers will contact me and say “I just found this wallet file from 8 years ago, and I’ve forgotten the password”. Customers with stolen wallets do use the same story, but I can very easily tell whether I have seen a wallet before or not, and tell them apart. To avoid most cases of fraud I compare the wallet to the ones I’ve seen before and try to get really good password information from the customers.
Are the customers a part of the recovery process?
The customer is involved mostly in the initial stages of the recovery, providing me the wallet information and their password ideas. There are some wallets where only the owner can approve certain actions, so I need the cooperation of the customer. That is a nice feature of wallets such as blockchain.com and others with 2FA, where users will receive an email or text asking them “do you approve of this recent activity?”. For the password ideas, some customers have made their own lists of attempts they’ve made, and this can be a very helpful starting point. For some more esoteric wallet formats I’ve had customers do their own research into how I can add support for that wallet type, which has been quite helpful in more than a few cases.
What is the recovery success rate?
I have a 35% success rate, which is possibly not as high as people assume. However, I do continue working on the wallets I am not able to recover now. If I don’t succeed at first, I’ll put them back in the queue and keep coming back to them. What that means is that as my software gets smarter over the years, I will go back and retest older wallets. I’ve succeeded in recovering wallets 3+ years after somebody has sent them to me. People were very surprised when I finally emailed them back with good news. So, my success rate is gradually increasing as the software gets better. I don’t think I’ll ever be able to solve all inquiries, but a success rate of 50% may eventually be possible if the system gets good enough.
What are some concerns you have about the business?
Certainly, opening wallets that don’t belong to the customer is the number one concern. I’m also wary of opening wallets that have shady origins, such as online trading in illicit products, or thefts from compromised exchanges. But it’s becoming easier to trace the origins of funds or at least look for warning signs, as blockchain search tools get smarter.
Interviewer , Editor : Lina Kamada
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