Technology is a wonderful thing, but if you are forgetful or suffer from the worst of luck, like this guy, you’re in for a blast (and not the good kind). The whole story involves Mark Frauenfelder, a Wired Magazine editor, the editor in Chief of Make Magazine and founder of tech/culture site BoingBoing losing about $46,000 (in Bitcoin) by a combination of forgetfulness and sheer bad luck. He’s the Director of Research of the Institute of the Future’s Blockchain Futures Lab, which has a lot to do with his decision to invest in Bitcoin in the first place.
While the story is too long to cover in this blog, we’ll just let you know of how it started and the major take away from the story, which is also a fair warning given by many websites and Banks: “Keep your PIN safe.”
How it All Began
So it all began when Mark decided to spend some $3000 on seven-and-a-half Bitcoins. Some would consider this extreme because it was an extremely risky move in itself as cryptocurrency was still relatively new, but in hindsight, it seems all the more logical. Bitcoin has surged way past the $6000 mark no and the value of 7.5 Bitcoins would be $46000 at the time of writing this. He had begun his job at the Blockchain Futures Lab at the Institute of the Future and wanted “first-hand experience” in Bitcoin as they used blockchain technology for recording transactions on the network.
He had little idea that his decision would leave him scrambling to save a fortune.
Bitcoin Usage was Easy
Things were going well as he used Bitcoin to buy different things like graphic novels from Meltdown comics in LA. He bought Starbucks Credit using the airBitz app for coffee. He even bought an automated wireless camera doorbell to secure his home using purse.io, from Amazon. He called it amazing and surpirisingly easy to be able to buy regular items using Bitcoin even back in 2016.
Not too secure
Almost a year ago, in November 2016, the value of Bitcoin doubled. That meant, he’d hit the jackpot. He became even richer overtime, with little to no effort. He had different addresses and was keeping his keys for Bitcoin accounts online, but he wanted more security. Many Bitcoin services retain the addresses and keys of their customers, making them prone to fraud, hackers and even the government.
The Move to a Hardware Wallet
He interviewed some experts and almost all of them advised him to use a hardware wallet. It works like a USB memory stick, encrypted with a key to store all of your Bitcoin keys privately and securely. It even allows authorization of transactions, without leaking them on the internet, vulnerable to hackers and the like.
He bought the “Trezor” (Czech for “Safe”) wallet on Amazon for $100 in November because it promised to be bulletproof. He set it up by plugging it into his computer and logging on to Trezor’s website when it arrived. He wrote down the 24 recovery words to generate a master key to his Bitcoin to recover them.
All Did Not Go According to Plan
He did not count on losing the pin and 24 recovery words he wrote on an orange post it. But that is what happened. He had even planned to have those 24 words punched into a flat aluminum block. Poor guy.