Since the very start, people have lost bitcoins due to human error. Mislaid wallets, forgotten passwords, broken hard drives, hacks, and scams have conspired to remove over 20% of all BTC from circulation by some estimates. The dubious accolade for the first major bitcoin loss goes to forum member Stone Man, who, on August 10, 2010, managed to permanently erase his access to almost 9,000 BTC.
A Stone Cold Lesson on the Need to Back up Your Keys
In the early days of Bitcoin, people were free and easy with coins. A plentiful supply of coins and nominal value, coupled with a nascent community that was still getting to grips with the technology, meant that losses were common. It didn’t help that bitcoin wallets were rudimentary back then, leaving even the savviest of users just one misclick away from disaster. In mid-2010, that’s the fate that befell Stone Man, one of the Bitcointalk forum’s earliest users.
“Lost large number of bitcoins,” read the matter-of-fact title to his post published on August 10 of that year. The incident had occurred a day earlier after Stone Man had amassed 9,000 BTC, purchased from the first ever exchange, and then tried to send one coin from his wallet to a different address. The transaction, which can be viewed here, shows that Stone Man achieved this objective. What it doesn’t show is what happened next. The pseudonymous forum user outlined the sequence of events:
1) Bought 9,000 BTC on one of the exchanges over time.
2) Transferred them to my client running on a Linux live CD distro of Debian.
3) Backed up the wallet file to a flash drive.