Topic: A little ignorance and you can lose all your holdings (Read 619 times)

You shouldn't focus on single addresses but rather on wallets. Leave it to your wallet software to manage your wallet's addresses and try as early as possible to use a decent hardware wallet to secure your private keys (forget closed-source Ledger crap).
Software-only wallets are only secure if you have a strict air-gapped setup where the private keys are in the air-gapped cold section and your online hot wallet section is watch-only, i.e. without exposing private keys to an online device.

You need to have redundant secure backups of your wallets. No matter what, period! Storage devices can fail: no backups, no mercy!



The guy who lost his coins bought and/or mined his Bitcoins back in 2012 and used a BitcoinGUI wallet (there's no more details in the reddit post about this). Back then as far as I remember there were no HD wallets with backup recovery words (don't remember when Armory wallet showed up first). So that family member of the reddit poster used BitcoinGUI (today Bitcoin Core) with a wallet.dat file full of independant random private keys. If you had to backup such a legacy wallet, you had wallet.dat file backups.

Apparently the guy who lost his coins didn't have that. Big and now very costly fault!



As soon as your coin's value exceeds a four-figure $$$ you should make some risk assessment of how to prevent certain loss cases. I would use encrypted file systems to mitigate exposing my wallets to device theft. An encrypted file system also prevents exposing your valuable data and wallets to repair technicians.

Show me a repair shop that allows you to never loose your eyes on those who handle your device. Not impossible but somewhat unlikely. If it's not the storage device to repair, you could ask that the first thing they do for the repair job is to extract the storage device and hand it over to you so that a technician wouldn't ever have a look on the device's content.



Where do you phantasize "have been warnings of wear of this device" from the quoted reddit post or OP's post? Seriously!


To my knowledge there were no wallets in 2012 with "seed phrase" or more precisely mnemonic recovery words and the story is about a guy who bought/mined coins in 2012. Don't make assumptions out of nowhere, this doesn't help the topic here.

We simply do NOT know what that guy told the repair technician, nor what was on the corrupted hard drive besides the wallet.dat file. There's simply not enough details exposed in this story and topic by OP.

Was the wallet.dat not secured with a decent wallet passphrase? We don't know.
Was the wallet.dat wallet passphrase in clear-text in a file on the harddrive? We don't know.
Was the wallet.dat wallet not secured at all? We don't know.


Re-reading the reddit posts again, the story seems a bit wacky. Reddit OP speaks first of a corrupted harddrive, then later in the reddit thread it's a thumbdrive. Both are completely different storage technology with their own very different technical issues that could arise.

Nevertheless whatever is true, from every loss story there are lessons to learn from.

The first mistake of the guy was trust a device to hold his bitcoin keys there have been warnings of wear of this devices and that’s what happened. Firstly I see this story mor like fiction and not real, the data recovery specialist must have a knowledge about the whole bitcoin thing and was also aware that the drive brought for repairs has the seed phrase either it was the owner that told him or he cracked the drive and saw the keys. This is the only two scenario because seed phrase on a device doesn’t mean that bitcoin was on that device because bitcoin are stored on the blockchain and only keys stays on the device which means someone has had access to those keys and moved the bitcoin elsewhere.

I guess you didn't read through the topic, OP said he wasn't scammed but lost his holdings out of carelessness to a data recovery specialist due to his hard drive that stored his seed phrase was bad, so the whole thing here is either the story is fake or the data specialist somehow knew that he had seed phrase stored there.

Yes that guy has been too old in bitcoin to be less knowledgeable about security and most of all he was a minner, doesn't the whole tech thing means you should know some basic things, I don't think a minner that only in Bitcoin with over 273 bitcoin would be that careless to store his seed phrase in only one hard drive without no alternative.

Sadly, there are a lot of people that are still into that thing. They will only invest but they are not eager to know how they're going to make themselves comfortable by keeping it to their own wallets and how to prevent people from invading their wallets to avoid such hacks, physically and online.

It's too expensive for the lesson that they have to learn. They don't treat it as if it's the most important thing that they need to secure and that's why the are too vulnerable while the people that they whom trust sees their vulnerability, they take advantage of them. I even have a laptop have it repaired and even though I have a wallet installed there with not that much, I still check it out and never lose my eyes on the technician and that's what is giving importance to your thing because it's not just about the wallet but also about the parts that you're allowing these techs to fix them.

Well, I'm just wondering why for 8 years in crypto they never know what is the best thing to do in order to secure their funds. For that long, I don't think they are still a newbie and unaware of the market risk and hacking incidents. They are not ignorant, they are too unlucky to be a target of hackers because even old-timers sometimes make mistakes.

This is the reason why we should not store our money in one address but rather spread it. That scenario shows us how important is to not just set aside our fund's security but instead, make focus on it and ensure that it is safe at least 99%. Otherwise, we give these hackers easy access to our wallets. 

If you observe very well in that case that happened for that guy to lose his BTC, you will discovered that the guy is part of this category of people who just heard that if you invest little money on BTC and hodl for long you will achieve huge amount of money without settle down to know how to write the seeds phrase in a secure please for future purpose.

 Sometimes, things like this happen for other people to learn their lesson so that they will be careful where they store their BTC and, if you use good wallet to store your BTC and you keep the seeds phrase in a safe place, you don't have anything to fear.

The story doesn’t actually seem right but there are actually some few careless people who are careless with almost everything, or it could be due to the fact that they didn’t buy them wiith their hard earned money so they don’t actually know the value of it or they bought it so cheap and never believed it would be worth this much in a few years. Some people lost their coins after carelessly dumping their wallet and recovery phrase and after some time they start to realize how much there coins are worth and start to think of ways to recover their lost wallets and coins, only few are lucky to recover their coins and most people fail to recover their wallet and lose all their assets.

The earliest set of people who were lucky to own bitcoin when the price was low didn’t actually take security seriously, since it was not worth much and they didn’t know in a few years it would be a very valuable asset they took it as a joke and didn’t care if they lose it because it was nothing as at that time. Maybe this was what happened to the person in OP’s story, he probably didn’t know it would be worth a fortune in a few years and misplaced his seed phrase and security keys and lost access to the bitcoins.

Security is now a vital part of owning a bitcoin because of its current value, no one can afford to lose even one bitcoin not to talk of 276 bitcoins.

The story you mentioned doesn't point to just a little ignorance but to maximum ignorance.

How is it possible for this massive amount of Bitcoin to be stored on a single hard drive? Why didn't he buy 5 to 10 hard drives to store backup copies of his wallet recovery information, or why didn't he purchase Hardware Wallet and its fire-resistant Seed Phrase Backup Tool, such as Cryptosteel? This person is genuinely reckless because if he knew that he had a massive fortune, he wouldn't have risked years of holding his Bitcoin in the blink of an eye, nor would he have trusted one of the data recovery specialists as he did. If the person could not take all rational measures and decisions to secure his seed Phareses, he would regret it for years of his life due to his ignorance and lack of experience.

I would say it's a careless act and also lack of knowledge because he might think the hard drive, he literarily doesn't have the technical ideal that the technician or anyone would have such thought of accessing into his privacies by having access to the hard drive. I feel pity for him because he never expected it.
Nomatter how learned someone would be, there would also be circumstances where you'd have to learn more from a mistake done.
About finding out it was the technician that took away the bitcoin from the guys wallet, I would suggest they check on the wallets transactions history and find out the date the stolen bitcoin was moved from the wallet and then consider when the guy took the hard drive to the technician, how long the hard drive has been with the technician and when the guy retrieved the hard drive from the technician too. Hopefully something traceable could come out of its.

He doesn't see this as a big deal because Bitcoin have not much value at the time but at the same time he is too careless, he has a reason for storing those Bitcoin, why give the same hdd to a stranger.

Looking at the value of bitcoin today must have affected this person so much, because the value is already enormous, compare to the year 2012, he can't even blame the tech guy, he was just smarter than him, this numbers of Bitcoin was never stolen from the owner, it was the owner that give it away by himself.

It will cost legs and kidneys to get that amount of Bitcoin back today, he will have this regrets for the rest of his life, let's hope he learned from his mistake but this is one of those mistakes that time can't heal, it will always stick to the heart.

You have really explained it well and we all need to be very careful how we do things and make sure we stay safe in the market to prevent unnecessary regret that could happened because we do not understand what is needed for us to stay safe in the crypto market. Since everything activities we undergo in the market is always online, hackers could use this opportunity to steal from us if we don't have good knowledge of the crypto market. It is very important that we have concrete idea about the market so we don't easily fall out due to little mistakes of not keeping our wallet information safe.

From,the story I think we are missing something out,giving the hard drive to the data recovery specialist to repair it...from my point the specialist is the one that made the guy know that his Bitcoin has been stolen.
 If we are trying to point fingers at the specialist, someone can't act of ignorance maybe the guy has already told the repairer the contents of the drive,so if it gets stolen is probably the fault of the guy for  been insensitive about assets or valuables.
But the question now is can someone Bitcoin gets stolen that way,i think is only those who know your key, password can access your Bitcoins.
 In essence we should be careful and sensitive.
To avoid such costly mistakes.

It's a very common scenario that can happen to anybody using a laptop or a PC and there are two simple solutions to overcome this problem.

1. Buy a new hard drive and transfer your data to the new drive (expensive solution)
2. Restore your hard drive but before that transfer your BTC holdings to a different bitcoin address which you haven't used in your hard drive.

There are a few key lessons to learn from this case (by no means an exhaustive list here):

• You need redundant and safe offline recovery backups for your wallet(s).
• Do NOT use no or a weak unlock passphrase for your wallet(s).
• Store redundant offline backups of your wallet's unlock passphrase separately from your wallet(s) and your wallet's recovery data.
• Do NOT create digital copies (files or pictures or ...) of your wallet's recovery data on any online digital devices.
• Do NOT spread the word that you have substantial amounts of crypto coins.

Well said. It's easier said than done to do something stupid like losing the keyphrase. Been there myself, but only for small test wallets.

I've learnt the hard way that if you have hardware wallets, have a spare duplicate ready and updated. In the event the first one fails or anything, you arent suddenly stuck waiting for one to arrive in the mail.

Its hard to believe that this guy went down entrusting his hard drive to some data recovery specialist without some caution. He must be trusting that person so much that he end up being deceived in the end. Although this might a made up story, but if ever it really happens, the person at fault is the one entrusting his hard drive to some stranger. Security should always be the first priority, rather than letting someone fix your hard drive when you know exactly that the assets inside are so much valuable that you can’t even afford to lose.

So, this idea was probably one of his carelessness. And it probably wouldn't be very successful to make a case for it unless he had strong evidence. There will definitely be a delivery history, right? And it would be a shame if we entrust such precious hard ware to be worked on by someone else and you don't see how it is done. Yes, maybe sometimes they don't allow you to see it. However, regardless of the condition and assets you have, I will look for a specialist who will allow me to see the work process. And when this accusation is no longer proven, what else can we do to prevent it? Oh yes, if the drive is indeed lost, there will be a transfer transaction, right? Just see when the time is, if the time is when the drive is still in the hands of the specialist, there is a possibility that he will do it. But if not, maybe this is just a fake story.

That guy should have just said that he's trying to recover his data and not his bitcoins. You don't have to be vulgar if your holdings is involved with these recovery.

You don't trust anyone even your friends and relatives with these matters because if you're too vulgar and vocal, your tongue might slip and said somethings that you'll never like that will end up to something like this.

I don’t think this guy literally do not know that handling his PC to someone stranger might put his assets into risk. He wouldn’t reached that amazing amount of bitcoin if he was not protecting his bitcoin wallet in the first place. Most probably, there’s another reason that all his bitcoins have ended up vanishing. I believe he might have handed his private keys to some bad guy without his consciousness. He might be drunk that time that made him create a stupid decision, and now all of a sudden he’s  giving all the blame to this recovery specialist which I think is actually innocent. I don’t know what’s the owner’s thinking but if this story is real, he might be living in mess right now totally upset and depressed.

It's high time we need to secure our holding and understand the risk in exposing our data or seed phrase or even clicking on the so called airdrop links or even connecting our wallet to random link shared in telegram groups as there are numerous way we can be scammed but if we stick to basics of securing our data and sensitive information then no one can scan us. Unfortunately the person mentioned in OP has learnt his lesson the hard way.