The digital nature of cryptocurrencies is no guarantee against the dangers that beset physical assets. While it’s easier to misplace a bar of gold or have a wad of bills go up in flames than it is to lose a cryptocurrency, it doesn’t mean it hasn’t happened. And not infrequently, both to people just starting out and to veteran companies.
The fact that cryptocurrencies are digital assets does not mean that this type of currency is protected against carelessness and accidents
More than one person has seen how, by a simple oversight, a real fortune has been lost forever. Here we tell you about the biggest oversights, accidents and errors of judgment that have wiped out large chunks of cryptocurrency.
-James Howells’ hard drive
In 2014, Bitcoin was already fairly well known – at least in certain internet circles – and its value, while light years away from what it is today, was no joke. In fact, that year, the headlines were filled with one of the news stories that began to create the Bitcoin myth: a Norwegian student bought a house for 5,000 Bitcoins for which he had paid $27 in 2009. While those 5,000 BTC would be worth about $250,000,000 today (more than enough for several houses or a very large house), the fact that you could buy a house with them is enough to get an idea of their value.
But James Howells, the protagonist of this story and a native of Wales, received this news with some sadness, as shortly before, he mistakenly disposed of a hard drive containing the private keys that granted access to 7,500 Bitcoins. This means that, given the price of Bitcoin today, James Howells threw away over three hundred million dollars
Howells mined the 7,500 Bitcoins with his laptop (something unthinkable today) and, upon selling it, decided to keep the hard drive. However, during a cleanup day, the hard drive ended up in the trash, and from there, it allegedly made its way to his town’s landfill. Despite his pleas, the city would not let Howells search through the trash to find his lost loot.
-The private keys to Canadian Bitcoins
Digital wallets for Bitcoin and other cryptos operate with very long private keys that protect their contents. At least, as long as those keys are not blithely handed out to other people. Unfortunately, this is a lesson that Canadian Bitcoins learned the hard way.
During a server migration, a hacker launched a clever (as well as simple) attack with the goal of getting his hands on the Canadian company’s Bitcoins. In a show of simplicity, the hacker posed as the company’s CEO and sent an email to their data center urgently requesting the private keys to the digital wallets. No one double-checked and the cybercriminal got away with a loot of 149 BTC, which today would be equivalent to almost $7.5 million.
-The most expensive pizza in history
In the crypto community, there is a day marked known as “Pizza day”. This day marks the anniversary of one of the worst financial decisions in history. In 2010, when Bitcoin had little value and was little more than a technological curiosity, a man named Laszlo Hanyecz (one of the first Bitcoin users) had about 10,000 BTC, which at the time was equivalent to about $41.
Wanting to give them utility beyond being zeros and ones on his hard drive, Hanyecz decided to buy a couple of family pizzas for 10,000 BTC. Of course, Hanyecz didn’t have a crystal ball, and at the time he might have thought that two free pizzas were better than a virtual currency that would probably never be worth much more. If he had, he would have known that, over time, those 10,000 Bitcoins would eventually be worth more than half a billion dollars, and he probably would have paid for the pizzas differently.