A lot of folks kick themselves for not jumping on the bitcoin mining bandwagon back in the day. Other people regret not even hearing about it until it was too late. Then there are those who knew about it, sold too soon, or just didn’t have the guts to buy in even though they knew what it was.
But the hardest hit are the ones who actually mined or bought bitcoin and held onto it, only to lose it somehow.
The James Howells incident
So there’s this guy, James Howells, a computer engineer, who accidentally tossed his hard drive with around 8,000 bitcoins into a landfill in Newport, Wales. At today's bitcoin prices, that’s like 555 million bucks. Talk about a nightmare for him.
He even tried to get a local team to excavate the landfill but got shut down by the Newport City council. They were worried about the environmental impact. He took it to court but the judge said there was no real chance of winning the case.
What can we take away from this?
Protecting your coins should be your top priority. There’s no room for mistakes like this. You’ve gotta be organized and responsible with your crypto or any valuable asset. Plus, it helps to think long-term. I doubt he ever imagined bitcoin would skyrocket in value; otherwise, he would’ve handled it differently. Honestly, it just goes to show the importance of being careful.
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. Its easy for us to judge now but very few people truly foresaw how big Bitcoin would become. Its very possible that many of us who harshly judge them today wouldnt have made better or more futuristic decisions if we were in their shoes back then.
Thats 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 its also fragile.
Stories like these are tragic but they highlight one of Bitcoins core truths which is sovereignty comes with responsibility. In bitcoin's self-custody design, theres no customer support, no reset button and no appeal process. Thats empowering but it also means we have to treat private keys with the same seriousness as physical wealth if not more.[/list]
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.
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.
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.
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.
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!
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.
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.
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.
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.
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
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.
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.
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.
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?
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
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.
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
It describes changes in number of JH's lost bitcoins.
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.
Let me quote myself about the Stephen Thomas case:
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
From what I know, he continues to find the missing hard drive. Its 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.
Imagining the kind of like they could have been living now would be depressing indeed. But we can never go back to the past.