Bitcoin has been around for just 10 years, but it’s already generated a heap of fantastic rags-to-riches stories. However, this article is not about them. Today, we are going to focus on the riches-to-rags side of things. Here are our top 5 true stories about people who wasted their digital funds for weird reasons.
TABLE OF CONTENTS
1. $100 Million Pizza 🍕
On May 22, 2010, a developer Laszlo Hanyecz made history, buying two Domino’s pizzas for 10,000 BTC. It was the first purchase made with Bitcoin. After all, in 2010 Bitcoin was just a year old and few people took it seriously.
Fast forward to the modern-day and Hanyecz’s bad luck is apparent. In 2020, 10,000 BTC would cost over $100,000 million. But it gets worse. When Bitcoin reached its all-time high in 2017, those pizzas would have been worth a staggering $201 million.
As Gordon Ramsay would put it — what a shame.
2. Lost in Space
Elon Musk, SpaceX producer, and multi-billionaire can afford to lose some Bitcoin. Still, this is a good story.
A blogger named Sahil Gupta came up with a theory that Musk was, in fact, Satoshi Nakamoto. Elon denied the rumor. “Not true” — he wrote on Twitter — “a friend once sent me a part of a BTC, but I don’t know where it is”.
Good for you, Musk, you are roughly $5000 richer than you know.
3. Mining Gone Wrong. Twice
James Howell an IT professional from the UK, accidentally dumped millions worth of Bitcoin. The worst thing is, Howell knows exactly where his lost funds are, he just can’t reach them. Here’s how it happened.
Howell was one of the early Bitcoin miners. He took up mining as a hobby back in 2009 and accumulated 7,500 Bitcoin on a personal laptop. That’s roughly $88 million at the time of writing. At some point, his machine failed and James took it apart to sell the components on eBay. He only kept the drive, hoping that the Bitcin price will go up. And go up it did, but to no use for Howell.
One day, while cleaning his apartment, Howell accidentally put the priceless hard drive in a trash bag. He only realized the mistake after Bitcoin’s price skyrocketed. By that time, the drive ended up in a dump. Howell visited the landfill site and tried to mine his bitcoins once again, but the city authorities prohibited his actions. Digging up the heap would cause environmental problems, they said.
Moral of the story: if you use a hardware wallet for storage, keep it in a secure place, not a drawer. Otherwise, it’s unlikely to survive a spring cleaning.
4. Mixing Up Things that Shouldn’t be Mixed
This story is so sad because it can happen to anybody. An anonymous user was making a transaction to an unknown wallet. Unfortunately, they confused the Amount and fee fields when setting up the transaction details.
As a result, they sent 0.0001 Bitcoin — worth less than $1 at the time of writing — with a whopping fee of 291.241 Bitcoin. That’s a fee of over $3,000,000 as of August 2020. At least, the miners must have made his transaction a top priority. Even so, today, there are cheaper ways to overcome the transaction speed limitations of the Bitcoin network.
Unfortunately, blockchain doesn’t allow users to undo such mistakes. Mixing up transaction details when the recipient is a friend, who might send the money back instead of running off to Cuba is one thing. But, when dealing with a stranger, that’s a near definite bye-buy to the money.
The lesson is clear as day: double-check all the details before pressing that Send button.
Lossing over $100,000 out of principle? That’s an easy yes for WIRED guys. Back in 2013, the editors of the technology magazine WIRED received a sleek black box. It turned out to be a BTC mining machine by Butterfly Labs.
The WIRED team set up the equipment and quickly mined 13 BTC, which is over $120,000 at the time of writing. Mind you, in 2013 mining was not that hard, and people could accumulate Bitcoin even with consumer-grade equipment. However, the team didn’t exactly know what to do with their new coins.
After throwing around a few ideas, they made an executive decision. The coins were to be destroyed by throwing away the private key. “If we benefit from the coins, our future coverage of the technology may be influenced”, said WIRED’s editor in chief.
Some Food For Thought 👨🏫
These were our five stupidest ways to lose Bitcoin. Learn security best practices to avoid the path set by those precedents. A great way to start is by reading our very own crypto security guide for beginners.