Home » The 5 Biggest Fails in Bitcoin History

The 5 Biggest Fails in Bitcoin History

Mistakes are what makes us human. Cryptocurrency-wise, mistakes can lead to serious outcomes. In many instances, a Bitcoin mistake is small enough to recover from, but that’s not always the case. As you’re about to learn, even a small typo can end up costing millions of dollars when you’re dealing with BTC. Here are five of the biggest Bitcoin mistakes ever made.
be-in-the-loop - The 5 Biggest Fails in Bitcoin History

Mistakes are what makes us human. Cryptocurrency-wise, mistakes can lead to serious outcomes. In many instances, a Bitcoin mistake is small enough to recover from, but that’s not always the case. As you’re about to learn, even a small typo can end up costing millions of dollars when you’re dealing with BTC. Here are five of the biggest Bitcoin mistakes ever made.

Mt. Gox

The infamous story of Mt. Gox teaches us how important the experience of developers in a cryptocurrency project is. Initially, while Mark Karpeles was the only developer, things were going well — the exchange became the world’s largest BTC-exchanger. Alas, when the hacker managed to penetrate the audit system of the exchange and reduce the cost of Bitcoin to a couple of cents, the situation changed dramatically for worse, and this incident affected the cost of Bitcoin for several more months. In the same year, the exchange closed, but even before that it turned out that another mysterious hacker quietly withdrew $ 340 million in Bitcoins from the platform — it looks like he had been doing this for many years. Even worse, the exchange system interpreted the intruder’s actions as depositing money, that is, it started giving free cryptocurrency to users (one of the wallets thus received 40 thousand BTC). In total, during these incidents, the exchange lost 850 thousand BTC, which led to its bankruptcy.

be-in-the-loop - The 5 Biggest Fails in Bitcoin History

Send Me Your Private Keys

What would you do if you received a letter on behalf of a friend asking you to send personal keys? Probably, before sending such information it would be reasonable to verify the identity of the sender. Unfortunately, not everyone uses common sense when working with cryptocurrencies. Last year, a certain hacker sent one letter signed by Canadian Bitcoins CEO James Grant. At that time, data of the company was transferred to a new provider, Rogers Data Center, and this provider simply sent all the requested information. The company lost 149 BTC. 

Would You Like Some Mastercoin?

The Fyfe platform was conceived as a decentralized version of the Internet, the project has been actively developing for the last eight years, and this year the second stage of the ICO has passed. It was possible to invest in the platform either in BTC or Mastercoin, and this turned out to be a mistake — Mastercoin was known to very few people and since that moment, ICO has lost a lot in price. Maidsafe, which was developing the Fyfe project, has collected millions of dollars, but since most of the funds were attracted to Mastercoin, they have lost a lot. Until now, no one can explain why and for what reason Mastercoin was chosen as an alternative to bitcoin in the framework of ICO, but in Maidsafe, they probably will no longer be associated with little-known Altcoins.

Transaction Fee Errors

A lot of people are arguing a lot about the amount of commission on the Bitcoin network – especially since 2016, when the first problems with scaling were noted — and at the peak of Bitcoin popularity, the fee for transfers was substantial. It was substantial, but not so much — one Briton in September 2013 accidentally assigned a transaction fee of 80 BTC. It is especially insulting that he wanted to send only 0.01 BTC. And this mistake is more common than it seems: for example, in July 2013, another user paid 30 BTC for a transaction.

be-in-the-loop - The 5 Biggest Fails in Bitcoin History

Coins in the Trash

Because of the decentralized Bitcoin structure, controlling your private keys is extremely important — if you lose them, you will lose access to your money forever. This is exactly what happened to Welsh James Howell — he accidentally threw out the hard drive, where the keys to the wallet from 7500 BTC were stored.

Howell has been mining Bitcoins from 2009 to 2013, and in 2013, his laptop broke, and in the spring, during cleaning, he accidentally threw out the remaining hard drive from him. The story got into the international press, and James even announced the award to the finder. Given that today these coins would cost $ 48,975,000, he could buy a city dump, and still comes out on top.

All these incidents are a consequence of the selected protocol and the blockchain’s immutability. It is these properties that make blockchain convenient for most financial tasks, but for an inattentive or inexperienced person, they can also be a source of great trouble.

(Visited 1 times, 1 visits today)

Have your say!

2 0

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Lost Password

Please enter your username or email address. You will receive a link to create a new password via email.

Sign Up