This week signifies the 10th anniversary of an experience that illustrates just how far Bitcoin (BTC) has come in a decade – and some of the possible dangers that crypto holders need to continue to be 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 restraint of the lion’s share of that amount – BTC 8,999 – after a failed effort to back up their crypto.
At today’s prices, those lost tokens would be worth over USD 104 million.
The unspent crypto, which was carried to this address, continues to spark debate in the crypto community, with many cryptocurrency followers questioning whether the lost bitcoins could ever be retrieved.
In a conversation on Reddit, one user confessed to making a similar mistake in the past, stating they “did something similar back around 2011-12,” misplacing a wallet with about 40 mined bitcoins.
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 unfavourable misfortune occur today? Not, as the network has evolved a lot in 10 years.
Furthermore, according to one associate in the conversation, it could have been anticipated just a month later, when new ideas were added to the network…in September 2010.
The participant shared,
“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 bothersome 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 essential 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 calculated that, at the time, almost BTC 183 were provably lost, while believed lost coins surpassed BTC 1.5m, which is worth now more than USD 17.4bn.