This week marks the 10th anniversary of an event that illustrates just how far Bitcoin (BTC) has come in a decade – and some of the potential perils that crypto holders need to remain aware of.
On August 10, 2010, a BitcoinTalk forum user bought BTC 9,000, worth about USD 600 at the time. But that user mistakenly lost control of the lion’s share of that amount – BTC 8,999 – after a failed attempt to back up their crypto.
At today’s prices, those misplaced tokens would be worth over USD 104 million.
The unspent crypto, which was transferred to this address, continues to spark debate in the crypto community, with many cryptocurrency enthusiasts wondering whether the lost bitcoins could ever be retrieved.
In a discussion on Reddit, one user admitted to making a similar mistake in the past, confessing they “did something similar back around 2011-12,” misplacing a wallet with about 40 mined bitcoins on it.
The user wrote,
“About once a year I end up trawling [an] old hard disk drive hoping to find it hidden away somewhere. It’s never happening.”
Fellow Redditors suggested that the user in question enlist the services of a data recovery specialist.
“Me and the friends who would own the BTC have looked into forensic recovery but a lot of places wanted a pretty hefty upfront fee when I told them the situation, or a massive amount upon recovery. Still, we might end up going for it at some point,” the poster replied.
Another Reddit user said they “mined about BTC 30 back in the day and lost it.”
“At the time I was just doing it because I thought it was cool. But it wasn’t worth anything, so I didn’t give a f**k.”
Could the same unfortunate accident happen today? Probably not, as the network has evolved a lot in 10 years.
Moreover, according to one participant in the discussion, it could even have been prevented just a month later, when new concepts were added to the network…in September 2010.
The participant opined,
“So in summary: [the BitcoinTalk user] created a wallet file. Withdrew BTC 9,000 to it. Backed it up to the flash drive. Then he sent BTC 1 to some address. The wallet automatically generated a random bitcoin address as change address. Now his change coins (8,999 of them), were in this new change address, which wasn’t backed up. Here he unluckily deleted his main wallet by wiping his hard drive (thinking he had a backup). But he didn’t have backup of his change address. So he lost the coins.”
And now for the most galling part. The poster continued,
“This all happened in August 2010, before there was a concept of wallets made using ‘seed’ or keystore. One month before…”
Another user pointed out it was important to know the incident “predates HD wallets and also predates ‘keypools.’”
The last poster added,
“This example may also have played a role in motivating the introduction of the latter into Bitcoin Core. So, we’re in a pretty good spot today where this kind of issue (having a useless backup) is no longer a realistic problem.”
In November 2019, crypto market intelligence firm Coin Metrics estimated that, at the time, almost BTC 183 were provably lost, while assumed lost coins surpassed BTC 1.5m, which is worth now more than USD 17.4bn.
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