Bitcoin is not only a success, but above all a story of losses. Ask the people who spent hundreds of Bitcoin on pizza years ago.
Imagine that you have $ 30,000 in Bitcoin, but you do not know the PIN for the digital wallet you are in. The blogger Mark Frauenfelder was in such a position this year. In January 2016, he had bought 7.4 Bitcoin, at that time already not exactly low price of 3,000 US dollars. But then the price of cryptocurrency rose rapidly. In August, Frauenfelders Bitcoin was worth almost $ 30,000 – and nothing at the same time. For he had forgotten his seven-digit PIN and written the security words on a piece of paper that accidentally landed in the trash.
Mark Frauenfelder was thus overnight cryptolose. They are different from so-called Nocoiners: while Nocoiner never owned Bitcoin or other cryptocurrencies because they were either too cautious or missed the right time, Cryptolosers are people who have lost Bitcoin. Be it bad luck, stupidity or simply because they had no idea which way the currency would take.
The history of Bitcoin in 2017 is mostly told as a success story. The unstoppable price increase has finally sparked a hype. The blockchain, the technique underlying every cryptocurrency, is a buzzword of the year. Start-ups attract investors with Initial Coin Offerings (ICO), the banks in turn gamble or warn of a bubble. Since December, Bitcoin futures can be traded on the stock exchange. Russia and Venezuela are developing their own cryptocurrencies, and the state of Hessen is anticipating big business with the confiscated Bitcoin.
The history of Bitcoin is just as much a failure, a loss and a regret. Just as investors would have bought better stocks of Apple than Borussia Dortmund 20 years ago, the motto in 2017 was: Had Had, Blockchain. The higher the price, the more bitter the feeling of not having participated before, two or even five years ago, getting out too early (and thus violating the HODL principle), or, worst of all, Bitcoin to have lost.
Cryptolosers have been able to join group therapy this weekend on the ohmycoins.xyz website. For all other visitors, it is above all a place of glee. People who have lost or gambled Bitcoin or other cryptocurrencies can anonymously share their fate with others here. The entries are not checked for authenticity, so you should not take them too seriously. But in addition to some obvious troll contributions, it is already a sad as well as funny database of failure.
Bitcoin for horse manure and alpaca socks
There are the poor trots whose smartphones were stolen with the Bitcoin wallet, whose hard drive gave up the ghost or who simply forgot their password after years. The Welshman James Howells at least has not given up hope yet: since 2013 he’s trying to find a hard drive at the local dump. The bitcoin lying on it would now be worth many millions of euros.
Other people regret their early Bitcoin investments. Some issued thousands of Bitcoin for pizza in 2010. Or they invested “in cosmetic items in a game that does not exist anymore,” as one of them writes. Or in crypto cats, which lost their value within a few hours. There were alpaca socks for five Bitcoin to buy, which would be worth 78,000 euros today. And journalist Jason Koebler ordered horse dung with Bitcoin three years ago for an article. Shit happens, literally.
The stories on ohmycoins.xyz also show the other, volatile side of cryptocurrencies. For example, many users write that they lost money through the demise of Mt. Gox in 2014: 850,000 bitcoins were reported as being stolen, already worth about $ 450 million. There are regular reports of file sharing and start-ups that disappear or are hacked. Most recently, the NiceHash Bitcoin platform worth $ 64 million was lost. That was very regrettable, said the operators. Which they were right.
One could say that risk is part of the business, as Internet currencies are no different from traditional ones. The classic money is also quickly lost: it is stolen and gambled, stashed and forgotten in mattresses, or invested in the wrong stocks. The venture capitalist from Silicon Valley knows as well as the car mechanic in Castrop-Rauxel: Who speaks about money, knows the subjunctive, is always in between, if and when.
In this respect, crypto and classic currencies are similar. At the same time, Bitcoin, Ether, Litecoin and other digital currencies deliver a new, more abstract quality of loss. As a quasi-anonymous address in the blockchain, every bitcoin or part of it can be identified. And yet it is lost forever, if its owner forgets a password or gives up a hard drive without backup. According to recent research by Chainalysis, between 2.8 and 3.8 million bitcoins (currently about $ 43.4 billion) may already be lost because they are no longer traded or their owners simply have no access to them.
At least when it comes to dealing with their own Bitcoin, the owners are now likely to be more vigilant than two or three years ago. The uncertainty, however, remains in the face of the future: how far can the currency still rise before it perhaps breaks again massively? Who knows if she will not be worth as little in five years as she was five years ago?
For today’s Cryptoloser that would probably be a weak satisfaction. But at least in some cases, there is also a happy ending: Mark Frauenfelder it is in the end but still managed to access his 7.4 bitcoin again. He has not (yet) lost anything – except a few nerves and plenty of sleep.