Two heart breaking stories about bitcoin security we can learn from

[Alvin_talk]

While some individuals regret that they didn't take advantage of bitcoin price in the early days by mining, for others, they regret that they didn't hear or know about this financial technology on time. There are also people who regret that they knew about it but sold it cheap and people who despite the fact that they knew about it refused to buy.

The most devastated set of people are those who actually managed to mine or buy bitcoin and hold  but ended up losing it in one way or the other.

James Howells story
According to the story, James Howells, a computer engineer mistakenly threw away or disposed off his computer hard drive containing about 8,000 bitcoin in Docksway Landfill in Newport, Wales. With today's bitcoin rate, the dollar equivalent of this is around 555 million, what a disaster for him.

Although, he had severally financed a local team of specialists to carry out the excavation of the site but was denied permission by the Newport City council due to environment effect the search may cause. He later seud the council but the case was dismissed by the judge citing that there is no realistic prospect of succeeding.

Lessons we can learn from this

• Security of your coins should be your utmost priority and there is no place for mistakes such as the one in the above story. One have to be organised and responsible for their coin or valuable asset.
• It is also good to have a long-term vision in whatever you are doing, I believe he never taught the price of bitcoin will be worth it in the future, else, he would have handled it better. As per this point, it doesn't only apply to bitcoin itself but whatever product you have invested in that may look like its not worth it today, you never can tell what tomorrow will bring.

Stefan Thomas Story
Stefan Thomas received an award of 7002 BTC for his work of making an animated video titled "What is Bitcoin?" So in order to safeguard his coins, he made use of an ironkey which is basically a USB device that can encrypt the data it has stored. But there was I problem, he wrote out the password on a piece of paper he later misplaced. When you also compare the the dollar equivalent of this with the current bitcoin price, it is approximately 489 million US dollar, what a ridiculous and devastating loss. Thank goodness for his courage and strength, for some individuals, this might result in suicide attempt or mental disorder. In his words:

 I would just lie in bed and think about it, Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.

Source

Lessons we can learn from this

• We can't secure our asset without proper backups as this will make the whole process incomplete.
• Pay attention to every details. As you can see, only a missing piece of paper has cost him a life changing opportunity. In some situation, it is not only the big deals that matter, paying attention to little details counts.
• Learn to control your emotions, especially in times of crisis like this one, from his statement, one can see he has been affected psychologically yet he maintained under this pressure, some persons would have ended up committing suicide but he chose courage.

[Donneski]

...I believe he never taught the price of bitcoin will be worth it in the future, else, he would have handled it better.

Good lessons you've got but I think hindsight bias is very brutal here. Most people in the early days treated Bitcoin like an experiment or a hobby not a life-changing asset. With the information available back then, their behavior was understandable. It’s easy for us to judge now but very few people truly foresaw how big Bitcoin would become. It’s very possible that many of us who harshly judge them today wouldn’t have made better or more futuristic decisions if we were in their shoes back then.

• Learn to control your emotions, especially in times of crisis...
  

That’s an important point, though I think Bitcoin security should also be designed to reduce emotional and single-point-of-failure risks. For example, multisig setups, redundant backups and clear inheritance or recovery plans can prevent one mistake from turning into a permanent disaster. Relying on a single piece of paper or one device is convenient but it’s also fragile.


Stories like these are tragic but they highlight one of Bitcoin’s core truths which is sovereignty comes with responsibility. In bitcoin's self-custody design, there’s no customer support, no reset button and no appeal process. That’s empowering but it also means we have to treat private keys with the same seriousness as physical wealth if not more.[/list]

[BlackHatCoiner]

The lessons from people losing bitcoin are a Universe constant:

• Always use a seed phrase. Don't think you're smarter than the wallet developers. Just stick with the simple, suggested way.
• Stick with DCA and don't try to time the market.
• Don't try to trade altcoins so that you "eventually end up with more bitcoin". Just be honest and stack sats.

There you go.

[Frankolala]

Make duplicate of three copies of your seed phrase and store in three different locations because there's no way you can lose all three at once. Some common practices that we overlook can result to lose of coins. Some investors in the early days are still with their coins. It's not about when you bought or mined your bitcoin but your vision towards bitcoin.

[Z-tight]

Yeah, people lose their BTC, just the way they lose their fiat. Just that one can easily be recovered if you didn't lose it as cash. However, the story of James Howells has been discussed exhaustively over the years, there is really no new input at this point. Before buying BTC, you ought to know you're gonna be your own bank and if you lose your seed words, you lose your coins.

Make duplicate of three copies of your seed phrase and store in three different locations because there's no way you can lose all three at once.

How many people have the luxury of three different SAFE locations to store their seed phrase? Few to none. I am for making more than one copy of your seed words, but i also understand that it is not practical for a lot of people, for the lack of multiple safe locations.

[aoluain]

I'll bet those two guys could travel back in time!

The value of those lost Bitcoin is truly massive, and thinking about that would for sure wreck any
owners brain. It definitely takes a very strong mental state to be able to deal with those losses, enough
to prevent from doing anything permanently drastic.

Donneski made some great points about hindsight but what I am trying to understand is how James
Howells was not more vigilant of what that HD contained. I mean 8000 Bitcoin in 2013 was still worth
over $100,000!

[X-ray]

It's because back in the days, nobody expected bitcoin to be this big and yet it became this big. Everybody treating it like some internet money and they come to regret it in the future.

After bitcoin become pretty much recognized even by countries and investment companies. Everybody are backing up their seed phrase, going as far as buying hardware wallet and using multiple metal seed phrase storage.

It's definitely a lesson to learn, but I hope anyone holding bitcoin amounting to their life saving would spend some money to buy multiple hardware wallet and multiple seed phrase storage.

In black friday, those hardware wallet manufacturers usually sold them in bundle with good discount.

[WatChe]

The lessons from people losing bitcoin are a Universe constant:

• Always use a seed phrase. Don't think you're smarter than the wallet developers. Just stick with the simple, suggested way.
• Stick with DCA and don't try to time the market.
• Don't try to trade altcoins so that you "eventually end up with more bitcoin". Just be honest and stack sats.

There you go.

Once your seed is created, its very important to pay attention to security of that seed. Usually people don't pay attention to security of seed initially but later when their number of Sats increases and at that moment if anything wrong happen to their wallet, its very difficult to undo the damage because of non availability of seed. If someone is new to Bitcoin and is just creating his wallet then he must take that aspect in mind.

DCA is the best way to go with Bitcoin not only for people who don't have huge money but also for people with huge capital. Bitcoin price is unpredictable and we can't figure out when its the best time to buy bitcoin and thats where DCA comes in and frees us from this worry.   

[yhiaali3]

In the end we are all human, we can all make mistakes, and we all have human shortcomings, weaknesses or laziness.

Most of us know the necessary security procedures for saving a password or seed, but there are always possible mistakes, whether due to us or due to something beyond our control. We cannot blame all people for their shortcomings unless we know their circumstances.

Of course, the highest safety standards must be followed, but there is always a possibility of error or unforeseen accidents.

[m2017]

In the end we are all human, we can all make mistakes, and we all have human shortcomings, weaknesses or laziness.

Most of us know the necessary security procedures for saving a password or seed, but there are always possible mistakes, whether due to us or due to something beyond our control. We cannot blame all people for their shortcomings unless we know their circumstances.

Of course, the highest safety standards must be followed, but there is always a possibility of error or unforeseen accidents.

Not everything depends solely on ourselves. Don't forget about the "chance" factor (unforeseen circumstances or force majeure events) that can interfere with your plans. It's impossible to control everything, as the world around us is full of chaos and unpredictability.

The main mistake the heroes of these two stories made was that they seriously underestimated bitcoin and the importance of maintaining access to their wallets. Otherwise, they would have acted differently.

And don't forget about backups. Several of them.

[Emjay24]

• It is also good to have a long-term vision in whatever you are doing, I believe he never taught the price of bitcoin will be worth it in the future, else, he would have handled it better. As per this point, it doesn't only apply to bitcoin itself but whatever product you have invested in that may look like its not worth it today, you never can tell what tomorrow will bring.

I would not agree to the above bolded statement since no one is above mistakes, he did not intentionally toss the drive into the refuse dump. It could happen to anyone. A computer engineer handles lots of storage devices from PCs dismantled for repairs or coupling and when the drives are proven bad, they are bundled together and discarded, so I can understand his mistake is only obtainable with the nature of his job, although he should've kept it at a secluded place entirely, but no one is above such mistakes.

Stefan Thomas Story

• We can't secure our asset without proper backups as this will make the whole process incomplete.

Paper backup are still flawed storage mediums since they are less durable and not resistant to natural occurrences like fire or flood, Metal plate backups are better options instead which are more durable and you can even handle the engraving yourself for more privacy and security.
Checkup this thread by fillippone
Securing Your Seed Phrase with Washers

[melinoe]

Paper is obsolete and so is every material close to it.. You can rely on it in case a disaster happens or if you lose it at all.

Metal is the way to go, and the multiple instances of it would help both of these fellas to not to lose their BTCs.

[HONDACD125]

Those who say that people who sold early made a mistake need to understand that they didn't know what the future beholds, they didn't have the slightest idea that Bitcoin one day reach a valuation of $126k which is the all-time high for now, so as soon as they were getting a good amount based on the time and situation back then, they decided they should take that money and sell their assets because they thought it could lose its value again since it wasn't this popular at that time.

Mistakes are those where people lost their wallets or seed phrase or password, etc. Or, if someone were holding their coins and sold them after the first all-time high at $69k because the price then dropped, because they must have understood the potential it has and should have stayed patient, but we know that some people just can't be patient enough to keep holding for long, even if they held onto them, they would probably sell them around $70k or something instead of holding until it goes above $100k.

[Lida93]

In the end we are all human, we can all make mistakes, and we all have human shortcomings, weaknesses or laziness.

Most of us know the necessary security procedures for saving a password or seed, but there are always possible mistakes, whether due to us or due to something beyond our control. We cannot blame all people for their shortcomings unless we know their circumstances.

Of course, the highest safety standards must be followed, but there is always a possibility of error or unforeseen accidents.

it's true we are humans and are with weaknesses and shortcomings and sometimes laziness as well, but in this particular case of bitcoin with those persons that got it in its early age, it isn't as a result of any of these human limitations but for what I agree with the first users comment (a lack of vision) which talk about how some persons saw bitcoin as an experiment rather than real life assets that could make value in the future. This the carelessness with handling and safekeeping of seed phrases.

Let's take today for instance how many people or stories of people do we hear about them losing their wallet seed phrase containing bitcoins worth thousands to millions of dollars?! It's scarcely heard of, except for an attack.  It's because there's value now with the digital asset, almost everyone with large BTC is now consciously security conscious.

[SilverCryptoBullet]

The most devastated set of people are those who actually managed to mine or buy bitcoin and hold  but ended up losing it in one way or the other.

James Howells story
Stefan Thomas Story

They don't have proper wallet backups to use for their wallet recoveries later or they just made mistake during their time and practice. It's useless if they only feel either exciting, funny or even fearful when reading those stories on losses of the others, but after all they don't mind to learn and change their practice for their bitcoins, cryptocurrencies and wallets.

How to back up a seed phrase?

Securing Your Seed Phrase with Washers

There are more guides that can educate people about wallet backups and recoveries but it's vitally to remind everyone that back up must be in multiple backups, and some different backup methods. Don't rely on any single wallet backup method, and don't put all eggs into one basket (one wallet).
Metal Bitcoin Seed Storage Reviews.
21 tips for securing your bitcoin.
n0nce's Steel Washer Backup jig (customisable)
Stainless steel Bitcoin Recovery Seed Plate
[Tips] Ways to Protect Recovery Phrase - Mnemonic

[Lucius]

If the OP had by any chance searched the forum, he would probably have found dozens of topics about these two geniuses who thought that Bitcoin was something pointless that would fail, so they mistreated what they stored. Why would these be heartbreaking stories?

Besides, the first time I heard the story about JH, it said that he lost around 7000 BTC, today it's already around 8000 BTC, will it be 9000 BTC in a few years?

As for Stefan Thomas, one team managed to hack the same type of device that its coins are on, so it's only a matter of time when they will be recovered. The only reason it hasn't happened yet is that another team is working on his case and it's clear that he's not in a hurry to get access to his coins as soon as possible.

[hd49728]

Besides, the first time I heard the story about JH, it said that he lost around 7000 BTC, today it's already around 8000 BTC, will it be 9000 BTC in a few years?

Possibly according to information in Wiki about JH's lost bitcoins but the number is not important, he lost his bitcoins stored in that disk forever already. More or less than 8,000 BTC, it's no longer important with him as more or less doesn't make him feel better.

https://en.wikipedia.org/wiki/Bitcoin_buried_in_Newport_landfill

Between 20 June and 10 August 2013, Howells accidentally disposed of an encrypted hard drive,[5][2] mistaking one device for another.[21] The disposed hard drive contained the cryptographic private key for 8,000 Bitcoin[a][22][8] valued at £500,000 at the time.

It describes changes in number of JH's lost bitcoins.

Reports of the total number of Bitcoin lost were initially 7,500 BTC in 2013, 2017 until 2021, followed by 8,000 BTC from 2022 onwards.

[Strongkored]

The average story of losing a big amount of Bitcoin occurred when the price was still very cheap compared to now, making it a sad story because of the very significant price changes. This proves that people will judge the current price not the future, if he knows the price will make him rich in a few years, he will definitely save it well.

[coinrifft]

Let me quote myself about the Stephen Thomas case:

He has been offered by security firm (https://www.unciphered.com/) to unlock it.

Now, after months of work, Unciphered's hackers believe they can open Thomas' locked treasure chest, and they're ready to use their secret cracking technique to do it. “We were hesitant to reach out to him until we had a full, provable, reliable attack,” says Smith, who asked WIRED not to reveal his real name due to the sensitivities of working with secret hacking techniques and very large sums of cryptocurrency. “Now we’re in that place.”

But he refuses, citing:

Thomas had already made a “handshake deal” with two other cracking teams a year earlier, he explained. In an effort to prevent the two teams from competing, he had offered each a portion of the proceeds if either one could unlock the drive. And he remains committed, even a year later, to giving those teams more time to work on the problem before he brings in anyone else—even though neither of the teams has shown any sign of pulling off the decryption trick that Unciphered has already accomplished.

https://www.wired.com/story/unciphered-ironkey-password-cracking-bitcoin/

For the James Howells story, there's a lot of what if, like

- What if he didn't throw it? When would he sell it?
- What if instead of chasing it, if he started to buy in 2014 he could have made a lot of money again if he would HODL?
- Classic example of Sunk Cost Fallacy

[Furball808]

James Howells story
According to the story, James Howells, a computer engineer mistakenly threw away or disposed off his computer hard drive containing about 8,000 bitcoin in Docksway Landfill in Newport, Wales. With today's bitcoin rate, the dollar equivalent of this is around 555 million, what a disaster for him.

Although, he had severally financed a local team of specialists to carry out the excavation of the site but was denied permission by the Newport City council due to environment effect the search may cause. He later seud the council but the case was dismissed by the judge citing that there is no realistic prospect of succeeding.

From what I know, he continues to find the missing hard drive. It’s hard to just let go of that amount of money. Especially if you are seeing it with your own eyes how your money grows. Probably if anyone saw it, no one would even take interest in opening it not knowing it has huge amounts of money. Not like they can access it.

Stefan Thomas Story
Stefan Thomas received an award of 7002 BTC for his work of making an animated video titled "What is Bitcoin?" So in order to safeguard his coins, he made use of an ironkey which is basically a USB device that can encrypt the data it has stored. But there was I problem, he wrote out the password on a piece of paper he later misplaced. When you also compare the the dollar equivalent of this with the current bitcoin price, it is approximately 489 million US dollar, what a ridiculous and devastating loss. Thank goodness for his courage and strength, for some individuals, this might result in suicide attempt or mental disorder. In his words:

 I would just lie in bed and think about it, Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.

Source

Imagining the kind of like they could have been living now would be depressing indeed. But we can never go back to the past.