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.
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Upgrading the Computer With a Bitcoin Wallet
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!
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