Blog

5 Disasters in the Crypto World That We Can Learn From

In this article we have explained some of the biggest mistakes made by cryptocurrency users and the unpleasant happenings in this field. It is recommended that you carefully read stories and the corresponding security tip in the last paragraph of each section.

 

1. One wrong click and $120,000 lost

The phishing attack is one of the oldest and most common fraud methods.

Usually, in this method, error messages, wallet pop-up ads, and fake links are sent to the victims. By clicking on these links, victims will be redirected to unofficial websites or plugins and their recovery phrases or sensitive information will be revealed.

A user named PowerofTheGods on Reddit explained how he lost $120,000 of his investment by clicking on a malicious link. While this user’s ledger wallet was unlocked, a malware Trojan took control of his computer and emptied his wallet within minutes.

This user’s story went viral and many people shared their similar unpleasant experiences. Some of them have also complained to the judicial authorities.

Notice: Always be careful when dealing with questionable links, especially links from unknown sources. Also, always double-check the link you’re referring to make sure it’s correct. Some fraudsters copy the domains of popular decentralized applications with minor changes so that people do not know the difference between the original and the fake domain.

 

2. The death of a CEO and the locking of users’ assets

Gerald Cotten, CEO of Canadian cryptocurrency exchange QuadrigaCX, died in India in 2018. The cryptocurrencies of this exchange were all kept on a cold wallet and Gerald Cotton was the only one who had the password.

So far no one has succeeded in unlocking the password of his laptop wallet. As a result, the assets of more than 115,000 users, including 26,500 Bitcoins, 11,000 Bitcoin Cash units, 200,000 Litecoins, and 430,000 Ethereum units, have been locked forever.

Notice: Never keep your cryptocurrencies on an exchange, especially if you have a large capital. It is better to keep your assets in Ledger or Trezor hardware wallet.

 

3. Forgetting the hard drive password that contained 7002 bitcoins

So far, about 20% of all bitcoins in circulation have been lost and it is not possible to recover them. This happens when users lose their private key or their passwords.

Stefan Thomas, a German engineer, in 2011 in exchange for making an animation called “What is Bitcoin?” Received 7002 Bitcoins as a reward, but his bitcoin’s private key was stored in an encrypted hard drive called IronKey, and he forgot the hard drive’s password.

The IronKey hard drive gives the user ten chances to enter the correct password. After 10 unsuccessful attempts, the assets will be permanently locked. Now there are only 2 more chances left for Thomas.

Notice: Always write down your password and recovery phrase on a piece of paper and keep it in a safe place. Otherwise, you may lose your capital and regret it for the rest of your life.

 

4. Accidentally throwing away a hard drive containing 8,000 bitcoins

It has probably happened to you that sometimes you lose one of your things and later find out that your father or mother thought that it was worthless and threw it away. If this device is just an ordinary object, it does not matter much; But a similar incident completely changed the life of James Howells.

Howells had two identical laptop hard drives. One of the hard drives was empty and the other had 8,000 bitcoins in it. While cleaning out his office, Howells intended to throw away the empty hard drive, but mistakenly threw away the hard drive that contained bitcoins, which ended up in a landfill in Newport, Wales.

James Howells still suffers from his disastrous mistake to this day. He has made several requests to Newport City Council to dig up the landfill, but his requests have been turned down.

 

5. Paying 10,000 bitcoins for 2 pizzas

May 22 is known as Bitcoin Pizza Day. Buying 2 pizzas with Bitcoin is a famous story in the cryptocurrency world. In 2010, Laszlo Hanyrcz paid 10,000 bitcoins to buy two Papa John’s pizzas, which at the time were worth only $30.

Of course, Hanyrcz did not know about the future and he cannot be blamed. Bitcoin was not worth much in those days. If Hanyrcz had kept his bitcoins, he wouldn’t have had to work for the rest of his life. Interestingly, Laszlo has said that he does not regret his work and is happy that his name is recorded in the early history of Bitcoin. Hanyrcz is the first person to make a business transaction using Bitcoin.

 

The bottom line

Like other financial markets, sometimes unpleasant things happen in cryptocurrency, as a result of which millions of dollars of capital are lost. Some of these incidents occur due to user negligence and mistakes, which can be avoided by learning and applying security tips. In the above article, we examined 5 Disasters in the Crypto World that has led to the loss of users’ funds.

Source: boxmining.com

Copyrights © 2021 ZareTech.