It’s said, “with great power, comes, great responsibility”. I do a lot of reading in the crypto sphere and what I see a lot is, “I got scammed, or I got hacked”, but it is often a lack of due diligence.
Throughout history there have always been and will always be bad actors. It would be tragic to successfully build a portfolio of crypto only to find that because of your lack of knowledge in how to secure and protect it, it disappears. It could be hacked, you could fall for a scam or even worse, you could lose it out of ignorance.
Below are four examples of people that have lost or are unable to access their crypto. Some of these you may have heard about, but they serve as a valuable reminder to take charge of your crypto.
A programmer named Steven Thomas has been locked out of his Bitcoin wallet. He has stored 7,002 bitcoins on his secure hard drive, but he can’t access them because he forgot his password! The value of the inaccessible Bitcoin (not lost) today is approximately $266 million. These coins were stored safely within an IronKey device that will allows you ten chances to enter the password correctly. Thomas has tried several times with no luck and as of last January 2021, he only had two attempts left! This individual is in the most stomach wrenching position possible – the money isn’t gone; he just can’t do anything with it. Passwords often frustrate us with the constant changing and updating, let alone how many different sites ask us to create one…Passwords mean relatively little when compared to this mistake!
A gentleman in Germany, who continues to remain anonymous, lost $500,000 in Bitcoin when he responded to a Tweet (posted by an Elon Musk impostor) that said it would double his funds if he sent the required info. He did and his Bitcoin disappeared. These scams are still happening every day!
Matthew Mellon, a member of the Mellon bank family and chairman with the New York republican state Finance Committee got interested in crypto and made a $2 million investment in Ripple. At one point, the value of the investment was worth $1 billion! The problem? Matthew died in Mexico in 2018 and had stored his private keys (the only way to access the funds) in cold wallets across the country. Ultimately, lawyers contacted Ripple and the estate received a “unique privilege” to gain access to the funds. By the time the holdings were able to be sold, the investment had lost most of its value. When Ripple hit .19 cents per unit, Mellon’s investment had lost 66% of its value.
In 2017, David Stubley, founder of 7-elements cybersecurity firm lost 84 Bitcoin, worth $475,000 at the time, by simply clicking on a link that took him phishing. In the end, the thieves left him with one Bitcoin. Fortunately, the Bitcoin was able to be traced and although the fraudsters could NOT be identified, the wallet was frozen so that the funds could not be accessed.
While all these examples were dire to those affected, they were all preventable. Because of the current environment and the frontier that this new technology brings us, you must take the initiative to protect yourself and have the knowledge on how to safely conduct transactions in crypto … otherwise the worst can happen.