Lessons From the Biggest Bitcoin Losses in History.

[tech30338]

2. Lost Wallets and Forgotten Seed Phrases.

The largest bitcoin losses are not actually because by  hackers or scammers but because of forgotten passwords and failure to record or keep recovery phrases well or properly.

One of the most common habits that leads to loss of one’s seed phrase is actually not keeping it simple. Some investors you will read about them splitting their keys or seedphrases and storing them apart or they write the words in disorderly manner or they don’t save the words directly but uses other means like signs or even colours to designate each word. All this processes requires you to actually trust your memory the more, that is you memorize the process and sometimes when trying to scramble the process back again you simply forget some things.

For me simply backing up your seed phrase without complications is the best way to go. Save your seed phrase in proper manner and simply add a second layer like pass phrase and save it elsewhere and this to me is a proper way of saving seed phrase. It’s still idea to actually duplicate your back ups but not in so many places to cause redundancy and most importantly using materials that will last long for the back up is a most

This happens to me before, i have two wallets and i don't remember the keys, its been a long time, when i started to create wallet, and i forget to save the keys then i started mining, i don't know how much was there before since i also forget the address, this is the time when I'm just learning things about bitcoin, when i first heard it, in a friend who is mining in his home, the sound was so loud.
So after learning i always have backups everywhere, just to make sure that i wont lose it again incase something bad happens in my pc or in a device.

[Zaguru12]

This happens to me before, i have two wallets and i don't remember the keys, its been a long time, when i started to create wallet, and i forget to save the keys then i started mining, i don't know how much was there before since i also forget the address, this is the time when I'm just learning things about bitcoin, when i first heard it, in a friend who is mining in his home, the sound was so loud.
So after learning i always have backups everywhere, just to make sure that i wont lose it again incase something bad happens in my pc or in a device.

I don’t know the particular cryptocurrency you’re actually referring to but I think if it was bitcoin that you were mining then you must have had you bitcoin address somewhere because it would be needed for your coinbase transaction and even if you didn’t use it for mining and you were accumulating your bitcoin you would also have an address that you would be sending the coins too and once you’re frequenting with that address you can actually get familiar with it.

As for the private key I agree that one forget to back it up and lose it later most especially if the device used actually got affected or something like that. Overall offline back up should be your best friend and make sure to duplicate them

[Aanuoluwatofunmi]

If you look at the history of highest bitcoin losses, we could discover several people that are affected and how this has been happening on different occasion repeatedly, the only mistake we see is the one coming from the people who are bitcoin investors, the first is that some fail to understand the difference between using a custodial storage and a non-custodial storage, the second is for them to be able to avoid creating vulnerability that scammers could use against them and steal their assets from them.

[Franklyn-wood]

If you look at the history of highest bitcoin losses, we could discover several people that are affected and how this has been happening on different occasion repeatedly, the only mistake we see is the one coming from the people who are bitcoin investors, the first is that some fail to understand the difference between using a custodial storage and a non-custodial storage, the second is for them to be able to avoid creating vulnerability that scammers could use against them and steal their assets from them.

When I hear people with huge investment in Bitcoin say they loss access or scammed of there Bitcoin. I begin to wonder how real this things becomes, then ask myself question like are this people novice to Bitcoin, is it because of greed to get more, did it happen under duress. Some times I think this is a kind of logic to scare people from beginner's from involving in trading Bitcoin. But like you said about custodial storage. Many people seem to calculate the expenses involved in paying a third-party to protect there privat key and phrases.

[AVE5]

1. The Mt. Gox Collapse: Not Your Keys, Not Your Coins.

In the year 2014, a lot of people trust Mt. Gox exchange just like the way banks are being trusted to store your fiat currency, that’s the way they trusted the Mt. Gox exchange and they stored all their bitcoin on that exchange but the exchange collapsed and all those bitcoin were lost till date.

lesson learnt:
The lesson learnt in this is that once a third party or person is controlling your private keys they actually controls your bitcoin.
Convenience often comes at the cost of sovereignty, know this and no peace.

Aside the exchange being collapsed, storing your bitcoin where you won't be at its custody is a very high risk for the owners to reliably have peace of mind about the safety of their funds in the exchange. Perhaps if you don't get targeted by hacker's through invading the site and steal user's informations, the authority could still confiscate your coin by opening legal cases against you.
You can also agree with me that some victims whose bitcoin were being confiscated didn't real commit the offense they were accused of, so because they don't have access to their private keys since it's not a non custodial wallet, the authorities automatically takes control of their funds.

So the lesson should be the acknowledgement about the risk of storing your bitcoin or crypto in the wallet were you're not self custody of your funds. So non custodial wallets is always recommended for your convenience and privacy

[m2017]

Over the years many people has ended up losing their bitcoin that is worth billions because of exchanges being hacked, scam activities, forgetting passwords, security practices that are very poor and errors made by people holding bitcoin.

The best effect from "lessons" is achieved only when the user has learned this lesson through personal experience.

lesson learnt:
The lesson learnt in this is that once a third party or person is controlling your private keys they actually controls your bitcoin.
Convenience often comes at the cost of sovereignty, know this and no peace.

In some cases, handing over control of one's bitcoins to others is a better solution than having the user securely store these assets themselves, as they can be so irresponsible and careless.

lesson learnt:
It is true that self custody provides or gives us freedom but let’s not also forget that it also comes with responsibility.
Having a good backup strategy to our wallet is as important as owning a bitcoin.

This is not freedom, but a burden of responsibility.

lesson learnt:
When the opportunity is too good to be true avoid it.

There's just no need to chase easy money.

lesson learnt:
Always verify addresses very well before sending and you can also consider sending a very small amount for testing before transferring large amount.

This requires time, i.e., not to make transactions when there is a shortage of time for this process.

lesson learnt:
A lack of conviction about bitcoin can be just as costly as poor security.

This isn't a lack of conviction, but rather an investment strategy. That is, there should be a bitcoin sales plan and no selling until that point is reached.

[lovesmayfamilis]

I didn't find another warning after reading all the posts. Your language, your vanity, and your boasting everywhere can do you a lot of harm. Sometimes people were attacked by scammers just because someone wanted to brag about owning bitcoins, simply lying about the amount they didn't even have. Therefore, your tongue is your enemy. Talk about bitcoin very carefully, without talking about yourself personally. For those who are interested in him, redirect him to this forum; there is a lot of information here and a lot of teachers who will allow your friends to navigate the world of crypto correctly.

[joniboini]

Some times I think this is a kind of logic to scare people from beginner's from involving in trading Bitcoin. But like you said about custodial storage. Many people seem to calculate the expenses involved in paying a third-party to protect there privat key and phrases.

Not sure they have to invent some psyops to make Bitcoin storage so freaky for new users. Not to mention some people did stupid stuff and people can definitely learn from them. I'm not sure what you mean by expense to protect private key and phrase. Are you referring to the cost to acquire HW? Or actual paying people to keep their seed phrase and manage their cold storage? I've never heard about a service at like that. At best it's about using exchange as a "wallet".

[Outhue]

There are few lessons I can't erase off my head, even if I do for a while they will come back later especially when someone lost their coins through been careless or something else and post it online, the memories will be back, the first most important one is lack of patience when you want to transact.

Many people lost their Bitcoin because they are in rush to make the transaction, they take their eyes off the address and sent Bitcoin to wrong address, I was guilty of this stupid habit, I made this mistake not even once, the second one happened on a exchange, they changed their BTC wallet address but my impatient won't allow me to read things out first before.

[B-BossMan]

Op, you have highlighted some relevant key points here that can help the both newbies and also the experienced members or bitcoin holders here. Specifically for the beginners like us, thees truly provide a strong basics for avoiding some common errors or mistakes, and for the long term holders or experienced investors here, these serve as a valuable reminder that discipline and security shouldn't be taken for granted at any cost. In fact the context is trying to pass a messages that, we should protect our keys, we should secure our backup and every transactions carefully or gently, also we should control our fears and greedy and being consistent in learning more. Of course many bitcoin losses are truly not caused by the bitcoin but it caused by our own human errors, either its caused  by poor emotional decisions or poor security practices. Moreover  bitcoin actually gives a full control over our wealth and which has turned the power to become a great responsibility. We just have to be mindful of how we approaches it especially the newbies.

[BitBakerr1]

OP I want to commend you for this post, I like how you constructed it by putting out the mistakes and then the lesson learnt from those mistakes.
When I started bitcoin investment I was holding my bitcoin on an exchange I didn’t understand the risk behind it, and I was thinking it was save however when I discovered the risk behind it I quickly stopped and transferred all by bitcoin to wallet but keeping my seed phrase save or protected was one issue I was having because I was afraid that someone may steal it, but I thought about a very good way to keep it save and protected, their are some responsibilities that are attached to holding your bitcoin in wallet.
OP it is good you posted this thread on this board because newbies are going to learn a lot from this post and if they should read and put it in practice they won’t make some mistakes.

[Akbarkoe]

[...]
lesson learnt:
Bitcoin rewards discipline more than intelligence. Even experienced users benefit from following simple security principles consistently.

The enormous power is hidden in consistency, that's what should be learned from everything that has happened on the bitcoin journey, those who are able to hold very strongly will get very great results from bitcoin, therefore no matter how smart someone is if he is not consistent then he will easily lose what he has, but consistent people and strongly believe in bitcoin will get returns that will certainly never disappoint anyone.

Everything boils down to how you think from the events that have occurred which should be knowledge for us to be better at forming trust in bitcoin can secure it by ourselves, there will be time for those who strongly believe bitcoin to achieve success they never expected before.

[I_Anime]

2. Lost Wallets and Forgotten Seed Phrases.

The largest bitcoin losses are not actually because by  hackers or scammers but because of forgotten passwords and failure to record or keep recovery phrases well or properly.

One of the reason many are victim of this is ignorance, because I have seen many that lose their asset due to ignorance of not knowing the role seed phrase plays when come to digital assets in a whole . A friend of mine then told me he didn’t saved his seed phrase because he was not aware of how important seed phrase are when come to storing assets in the crypto space , which made him learned the hard way (which is through experience).

It is good to always research learn , because that’s what we do in this space every day . The more you learn the more your security and privacy improves and not to mention without the right knowledge it will be hard for you to make anything good in this space , so learn and improve yourself so that you won’t endup being a victim.

[UchihaSarada]

One of the reason many are victim of this is ignorance, because I have seen many that lose their asset due to ignorance of not knowing the role seed phrase plays when come to digital assets in a whole . A friend of mine then told me he didn’t saved his seed phrase because he was not aware of how important seed phrase are when come to storing assets in the crypto space , which made him learned the hard way (which is through experience).

It is good to always research learn , because that’s what we do in this space every day . The more you learn the more your security and privacy improves and not to mention without the right knowledge it will be hard for you to make anything good in this space , so learn and improve yourself so that you won’t endup being a victim.

It's not hard to learn about Bitcoin and about security from general security to Bitcoin security. After learning, it's good but not enough as in the end, people must have practice, and in security if they have bad and careless practice, what they learned will turn to be meaningless for their practice, security of devices, wallets, and safety of their bitcoins.

But surely learning is a very first and most important for all newbies to start with.
Bitcoin & Cryptocurrency Wallets: The Definitive Guide.
21 tips for securing your bitcoin.
How to manage bitcoin like a whale?
Securing your wallet.
The DOs and DON'Ts with Bitcoin key management.
Cryptocurrency scambook.

[jcojci]

Behind of Bitcoin investment, there is responsibility that you must pay attention and you can't let third party to store your Bitcoin because no guarantee they will online forever and if you want to store Bitcoin, make sure you know how to secure the wallets so you do not have to worry other people steal it from you. You don't have to tells others that you have Bitcoin because that will avoiding them to ask too much to you and you can store Bitcoin without worry.

[Pablo-wood]

Some times I think this is a kind of logic to scare people from beginner's from involving in trading Bitcoin. But like you said about custodial storage. Many people seem to calculate the expenses involved in paying a third-party to protect there privat key and phrases.

Not sure they have to invent some psyops to make Bitcoin storage so freaky for new users. Not to mention some people did stupid stuff and people can definitely learn from them. I'm not sure what you mean by expense to protect private key and phrase. Are you referring to the cost to acquire HW? Or actual paying people to keep their seed phrase and manage their cold storage? I've never heard about a service at like that. At best it's about using exchange as a "wallet".

Would I say it is ignorance or laziness that will make someone too careless to trust a third-party to help them store their private-keys. Writing those phrase down and taking custody of it won't cost anything not even the writers time. Acquiring hardware wallets isn't a must for a starter even though its much safer and the cost isn't that expensive compared to amount of Bitcoin intended to be protected. A cold wallet on the other hand is even much cooler since it is completely disconnected from the internet.

[tbct_mt2]

Would I say it is ignorance or laziness that will make someone too careless to trust a third-party to help them store their private-keys. Writing those phrase down and taking custody of it won't cost anything not even the writers time. Acquiring hardware wallets isn't a must for a starter even though its much safer and the cost isn't that expensive compared to amount of Bitcoin intended to be protected. A cold wallet on the other hand is even much cooler since it is completely disconnected from the internet.

Mostly wallets are free to use, and people can choose free, open source wallet softwares to use. With wallet backups, there are many methods and many of them are free too.

If people want to buy hardware wallets, it will cost them some money.
If people want to use things like metal washers, steel plates for wallet backups, they will have to spend money for buying these backup stuffs.

Generally these things are worth to spend money for, because prevention is better than cure and with good hardware wallets, strong physical proof wallet backups, they can secure their bitcoins better.

[sokani]

Over the years many people has ended up losing their bitcoin that is worth billions because of exchanges being hacked, scam activities, forgetting passwords, security practices that are very poor and errors made by people holding bitcoin.

Forgetting password? Since non-custodial wallets do not use passwords, I want to believe you are referring to exchanges. For the record, if people forget their password, they can still get access to their funds by entering their email and requesting a new password. However, I do not support storing assets on exchanges because you do not own your coin, and if anything happens to the exchange, you could lose it.

[coinlary]

Most people get into Bitcoin with the hope of making some cool extra money in a very short period of time . They time the market and buy more than they are capable to invest at a go just to get enough profit to pull out after a small buildup . This doesn't eventually work out for most and even if it does, greed will definitely kick in lol.

What next? Definitely activate  PANIC mode,  when they see those figures declining  pretty fast with no hope of getting back their money as fast as they've planned.

[Odohu]

The security tips share on this forum like the popular "not your keys, not your coins" were coined from the experienced gain from some of the losses mentioned in this post. The biggest losses were those that has to do with saving Bitcoin in centralized exchanges where the private keys are not in the custody of the owner of those coins like the Mt.Gox and FTX losses. The lessons to learn from these losses are enormous to ignore by any investor that wants to reap a reward from their Bitcoin investment,