The flipside to bitcoin's individual empowerment is that if you lose your private keys, your coins are gone - most likely forever. It’s hard to guess just how many bitcoin that have been lost in such way. Some recent estimations bring the total number of lost coins all the way up to six million, with four million lost and about two million stolen.
This massive amount (worth more than $20 billion as of December 2018) and the relative anonymity surrounding cryptocurrency transactions have fueled some notorious stories about lost crypto treasures.
Here are some of the most curious, tragic and incredible of them. Cloudbet takes you on a treasure hunt to
Mellon’s lost fortunes
Matthew Taylor Mellon the 2nd was a notorious English privateer of the 18th century whose vessel was sunk during a storm near Veracruz, Mexico, after plundering more than a dozen Spanish galleons filled with Aztec gold from the New World. Wait, what?
Nah, we’re kidding. Matthew Mellon was an American businessman and a chairman of the New York Republican State Committee’s finance committee. He was also an entrepreneur in the fashion industry and a crypto visionaire, since he invested more than $2 million in XRP (Ripple) cryptocurrency. Ironically, Mellon’s family tried to dissuade him from investing in cryptocurrencies as they considered it another erratic obsession of his. That is, until that investment turned into a $1 billion fortune.
Diagnosed with bipolar disorder, he was prescribed with the opioid OxyContin and eventually got addicted to it. His OxyContin use was costing him more than $100,000 per month, while at the same time making him ‘paranoid about security’ - he trusted no one. Which is not unreasonable if you own $1 billion.
However, he may have gone a bit too far. To safeguard his fortune he stored it in cold wallets under false names all around the US, without informing anyone of their location.
Mellon died in April 2018 in Cancun, Mexico, having suffered a heart attack after taking Ayahuasca, an exotic hallucinogenic drink. Ironically, this happened just as he was planning to check in a nearby recovery clinic. None of his wallet locations were mentioned in his will, and his family has not been able to recover any of the lost coins.
The Stefan Thomas affair
This is quite a short story about a guy who lost 7,000 bitcoins and wrote an article dissing blockchain technology afterwards.
Private key management offer certain advantages and disadvantages. While it does offer a high degree of power over one’s own financial assets, with great power comes great responsibility - at least for non-custodial solutions.
One of the key disadvantages is that, should you choose to keep your own keys, there’s no one to help you if you ever lose them. Stefan was fully aware of the situation, since he was an early developer and enthusiast of bitcoin and blockchain technology. Or was, until his luck went south.
As most savvy users would do, Stefan regularly backed up his wallet.dat file for data recovery services to make sure he wouldn’t lose his 7,000 bitcoin, worth around $125,000 at the time (and well over $20 million today). Therefore, he made three copies of his private keys; one in a Dropbox account, one in an encrypted USB stick, and one in a virtual machine. Better safe than sorry, right?
In a rather unfortunate turn of events, he managed to lose all three keys and along with them his ability to ever hope to move his BTC again. Sadly, we do not know how he managed to lose them.
One man’s trash is another man’s treasure
It’s not uncommon to find lost treasures in the trash; gold bars, Mayan artefacts, baseball cards and other extraordinary rubbish have been found. And now, a Welsh man called James Howells is trying to add bitcoin to that list.
One cloudy morning inf 2013, James Howells was cleaning his house in Newport, wales. While cleaning he noticed an old hard drive on his desk. Being an IT professional, spare computer parts were possibly not an unusual sight in his house, and he may have mistaken it for that other hard drive, you know. The broken one. With this, he immediately discarded it into the bin.
There was just one problem. That hard drive contained almost 7,500 bitcoins. We can only imagine James’ face when he realised what he had done.
James has been ever since trying to convince the Newport City Council to issue him a special permission to search the local landfill for the treasured hard drive. He has also offered to the council a commission, sort of finder’s fee, for their help.
Representatives of the council claim that they have been contacted to recover a piece of hardware containing bitcoins. However, searching for a hard drive in a landfill with more than 350,000 tons of waste is not exactly a simple task, as it can create environmental issues in the surrounding areas. And who’s to say that the HDD would even work after so long, and after going through (literally) so much rubbish?
Howell’s only hope now is that bitcoin’s price reaches $100,000 so that Newport City Council can have a big enough incentive to allow him on his task. With the current price of bitcoin, Howells’ hard drive, if it’s still intact from all the toxic waste and leachates - and that is a big IF - is worth more than $25 million.
With Newport City Council’s 2019-20 projected budget facing a shortfall of over £15 million, recovering the precious hard drive would be a convenient way to cover some of the borough’s expenses.
My dog ate my bitcoin
While growing up, who here is unfamiliar with the sentence “sorry teacher, my dog ate my homework?” Especially on a Monday morning? Reddit stories are not famous for being terribly reliable, but this one was worth mentioning as the author, named KillerDr3w, provided some photographic evidence of his bad luck.
Dr3w was actually taking good care of his bitcoin, which is why he invested some of them in buying a TREZOR hardware wallet. So that no sneaky hacker would put their dirty paws on his coins, ever.
As luck had it, one day, while minding his own crypto, someone knocked at his front door and KillerDr3w got up to get it. Upon returning to his desk everything looked normal. That is, until 20 minutes later, when he noticed a loose black cable on the floor.
“Okay, it must have fallen, right?” He picks it up, takes it back to his desk and then he realises his TREZOR isn’t on the desk. Perhaps uncoincidentally, his dog was also nowhere to be seen.
The sweet quadruped was waiting for him in the hallway, wagging his tail and holding a black piece of plastic in his mouth.
The PCB was cracked, the USB port squashed; all in all, KillerDr3w’s hardware wallet was pretty much destroyed. Unfortunately, even if the animal was unable to break the encryption, its attempts at brute forcing it have wrecked the device.
We do not know the exact number of bitcoin, but according to Reddit’s post author, his crypto wallet was holding six figures - which would have made it arguably the most expensive dog toy ever.
Fortunately for KillerDr3w, this lost treasure was recovered. Reddit’s community rushed into Dr3w’s help offering some assistance and plenty of jokes: “Wasn’t it the way dogecoin was created”?