You’d be surprised at how people, loaded with Bitcoin and other crypto, managed to lose their ticket to retirement.
One Wrong Click – $120,000 Crypto Gone
A phishing attack is the oldest play in the book, the bread and butter of web3 scammers.
They work by tricking victims with fake error messages, wallet pop ups, or flashy hyperlinks. They will then lead you to unofficial websites or extensions that would expose your wallet seed phrase or other sensitive information.
You’d think people would be more careful about connecting to shady websites, but the truth is both crypto newbies and veterans still fall victim to these to this day!
Reddit user PowerofTheGods shared his story of how he lost $120,000 after clicking on a malicious link. While his ledger was unlocked, a Trojan malware took control of his computer and wiped all of his wallets in a matter of minutes. The sight of all his assets being transferred to the hacker’s wallet address still haunts him to this day.
The story went viral and countless people also shared their unlucky experience. They reported to the authorities, but there was nothing they could do as cryptocurrency is still largely unregulated.
Always be cautious when encountering suspicious links especially from an unknown source. Also always double-check the link that you are clicking is indeed the right one. Some scammers can even copy the domains of well-known DApps with slight moderations to it, and you won’t even notice the difference.
Crypto Exchange CEO Died – All Users’ Assets Locked
This case is the literal sense of the phrase, “taking secrets to the grave.”
Canadian exchange QuadrigaCX’s CEO Gerald Cotten allegedly passed away in India in 2018. He was the sole custodian of the exchange’s crypto store, which is all held in cold storage.
No one has ever been able to unlock the digital wallet passwords on his encrypted laptop. As a result, over 115,000 users’ assets are locked indefinitely, including 26,500 Bitcoin, 11,000 Bitcoin Cash, 200,000 Litecoin, and 430,000 Ethereum.
In fact, in early 2022, Netflix released a documentary, Trust No One: The Hunt for the Crypto King, about Cotten’s life and his death in India.
The morale of the story is never store your crypto on exchanges, especially if you have large holdings. Consider holding your funds in hardware wallets like Ledger Nano X, Ledger Nano S or Trezor Model T.
Forgotten Password to 7,002 Hard-Earned Bitcoin
About 20% of all Bitcoins are lost in circulation. That is a lot of money that is unlikely to be recovered. This happens when users forget their private key or even the password to the hard drive containing the private key.
German engineer Stefan Thomas was given 7,002 Bitcoin in exchange for creating an animated video in 2011 called “What is Bitcoin?” However, he has forgotten the password to his encrypted hard drive called IronKey, which stores the private key to the Bitcoins.
IronKey allows users 10 attempts to input their password correctly before the funds are encrypted forever. Thomas only has two attempts left before his Bitcoins are gone forever.
Always remember to write down your password and seed phrase on a piece of paper and store it securely. Or it would be a lifetime of regret.
Spring Cleaning Gone Wrong – 8,000 Bitcoins Lost
Remember when some of your stuff would go missing, only to find out your mom had thrown them away because she thought it was useless? An action figure with sentimental value? No big deal!
But for James Howells, it was life-changing. He had two identical laptop hard drives — one was blank and the other contained 8,000 Bitcoins. Howells had meant to throw out the blank one when he was clearing out the office, but instead the drive containing the crypto ended up in a landfill in Newport, Wales!
This unlucky disaster continues to haunt Howells to this day. He has repeatedly petitioned Newport City Council if he can dig up the landfill site, which were all denied.
10,000 Bitcoins for 2 Pizzas
May 22 is known as Bitcoin Pizza Day. It is a well-known story in the crypto world. It was the day Laszlo Hanyecz paid 10,000 Bitcoins for two Papa John’s pizzas in 2010, which was worth $30 at the time. Now they are worth nearly $230 million!
We can’t blame him for not knowing the future. Since Bitcoin did not have that much value back then, it was more like redemption points for pizza. Had he held his Bitcoins, he would not have to work a day in his life again.
Amazingly, Laszlo said that he had no regrets about it, and was happy to be a part of the early history of Bitcoin. In fact, Hanyecz is the first person to use Bitcoin in a commercial transaction.