Hilton College matric student Matthew Wilson got interested in cryptos back in the great boom of 2017, but it was during the hard lockdown of the Covid-19 pandemic of 2020 that he had the time and energy to research the reasons why so many crypto holders lost billions due to lax security.
“I studied numerous examples of crypto holders losing fortunes both big and small due to ignorance and neglect regarding safe storage of their cryptos,” he says.
“An initial idea was to create a traditional insurance product aimed at protecting people against these losses. It however quickly became apparent that this would be unrealistic and not financially viable.
“This led to a more practical and viable solution that sparked multiple family discussions around the new idea.”
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Last week Wilson launched CRPT Secure, which solves a problem that has haunted crypto investors for the best part of a decade and accounted for losses running to billions of dollars.
It is reckoned that up to 3.7 million bitcoin worth about $159 billion (around R2.4 trillion) – out of a total 18.5 million minted so far – are lost and probably gone forever.
How investors literally ‘lost’ their crypto
A large number of these bitcoin were lost when the owners forgot, misplaced or accidentally threw away the recovery phrases they need to access their crypto wallets.
That’s the puzzle Wilson set out to crack.
When opening a crypto wallet such as MetaMask for the first time, you are required to create a recovery phrase – a 12-word phrase that is the key to your wallet. It should be written down and stored away from your computer (in case that gets hacked).
Many people ignore that advice and assume that if they cannot remember their recovery phrase, someone will be there to help them out.
Welcome to the dangerous world of cryptos.
Until now, no one would be able to help you over that hurdle – which explains why so many billions of dollars’ worth of cryptos have been lost forever.
Wilson’s solution is simple and practical, and leans on technology already in use by the banks.
Whenever banks issue a new credit card, the new PIN is inscribed using PIN-tab technology. The computer-generated PIN is revealed when you peel back a covering sheet.
CRPT Secure provides a disaster backup recovery plan for crypto investors by storing their 12, 18 or 24-word recovery phrases in a safe and confidential format.
The recovery phrases are stored on three or four pages (depending on the number of words), which are then stored at different physical and secret locations.
These pages are retrieved from the different locations and returned to the crypto owner, ensuring that their seed phrases can never be compromised, hacked or guessed at.
That may seem like an obvious solution to the problem, but the ingenuity and elegance of CRPT Secure suggests 18-year-old Wilson has a long career ahead of him in cryptos.
“Prior to this venture I was primarily invested in bitcoin with a smattering of altcoins such as Ethereum (ETH) and Cardano (ADA) making up a small portion of my portfolio. I have used all these funds in the building of this business, and so currently do not own any cryptos myself.”
With matric around the corner, Wilson is deeply buried in books, with economics and history his favourite subjects.
Written by Ciaran Ryan
This article first appeared on Moneyweb and was republished with permission. Read the original article here.