This Guy Lost $67,000 in Bitcoin When he Upgraded His Computer

This Guy Lost $67,000 in Bitcoin When he Upgraded His Computer

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Keeping a Bitcoin wallet on a computer makes a lot of sense to consumers, but they do not always take the effects of upgrading the machine into account. One guy upgraded his computer and lost $67,000 USD worth of bitcoin in the process.

Also read: Larry Tabb: ‘Blockchain Technology Has No First-Mover Advantage’

Upgrading the Computer With a Bitcoin Wallet

Bitcoin.com_ Computer Bitcoin Wallet Backup

When users install a bitcoin wallet on their computer, several important files are placed on the hard disk, including the data file containing the private key associated with the wallet address generated by the user. This “wallet.dat” file sits in a folder that users need to make a backup of, in case something happens with their computer, or they upgrade to a new machine.

In the case of one unlucky Bitcoin enthusiast, a computer upgrade cost him close to $67,000 USD. He installed the Bitcoin software on his laptop a few years ago, and he accumulated 150 bitcoins, which were worth $11 USD at the time. Later that semester, he upgraded his computer’s RAM and added a faster hard drive. He wrote down a note about the Bitcoin data file and ensured the note was folded over the old HDD — believing that it would be a good enough way to remember the money stored on his old hard drive.

After losing track of Bitcoin several years ago — as a lot of people may have done — the user moved apartments last month. As most people are well aware of, things often end up lost when moving between places, whereas other things may get thrown away. The hard disk with the Bitcoin data file was part of a box filled with old computer parts, which eventually made its way to the trash.

Fast forward to May 20, 2016, and the unfortunate Bitcoin enthusiast came across the Bitcoin data file note, yet the hard disk was nowhere to be seen. After all, that disk was part of the box filled with PC components which were thrown away a month prior, yet somehow the note ended up finding its way into one of the other moving boxes.

Once he realized what the note was about, the reality hit him:

“ I chuckled to myself for a split second before realizing bitcoins are worth a fair bit today, at which point panic set it. I’ve been googling for several hours but it seems I’m fucked, the bitcoins are gone! At least they weren’t worth the millions that my idiotic self thought when I first found the note, but that’s not much consolation.“

This is a very tough pill to swallow, and a prime example of why making a backup of the Bitcoin wallet.dat file is so important. Just writing a note to move over the file at a later date is not sufficient, and users should back up the file in question onto a different medium, such as a USB drive, SD card, or anything else they can store in a secure place.

More recent versions of bitcoin wallet software will let users create a “backup seed,” containing a string of different words. This seed can be used to import Bitcoin wallet details into a different software, either on a computer or mobile. Keeping this information is vital as well, preferably in a location no one can stumble across the information by accident.

Have you ever lost a bitcoin wallet due to computer upgrades or other mishaps? Let us know in the comments below!


Source: Reddit

Images courtesy of Pixabay, Shutterstock.

  • why bother

    Great article. Many people are not careful enough and stories like this are pointed to by those outside of crypto currency as reasons to not be in any crypto. The most important part of crypto is the private address. Several copies in fireproof safes.

    • Radek Janata

      With modern bitcoin wallets, the backup is as easy as writing down 12 english words on a piece of paper (and the setups wizard guides you to do so). You don’t havet to rely on any SD card or USB flash drive.

      • rykellim

        Hi, I know about the 12 English words backup found in HD wallets. However, does it mean that after generating the 12 words, you can just factory reset the phone and then “restore” your Bitcoin to the newly cleaned up device?