Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

People Who Lost Millions of Dollars in Bitcoin

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

Bitcoin’s extraordinary price boom is making everyone hooked to the cryptocurrencies rage. There are ordinary people who made millions and there are few unlucky ones who were just there but lost all wealth due to bad luck or silly mistakes. We handpicked few interesting stories of losing million of dollars in Bitcoin that are worth reading.

1. US $20 Million Lost in a Cheap USB Stick

Back In 2009, when Bitcoin was just starting an Australian man mined thousands of Bitcoins on his personal computer as you could easily mine couple of coins a day even from your desktop computer. After accumulating thousands of coins he backed up his encrypted digital wallet key in a USB stick assuming it will protect his Bitcoins in case his computer crashes or someone hacks it.

Back in 2013 when Bitcoin price started rising, he remembered his forgotten wallet and plugged his USB drive to check for his accumulated wealth.

To his utter surprise, his USB drive won’t open as it was a cheap Chinese made USB drive. As the reality finally hit him, it was too late and he was sure he can never recover his Bitcoins again.

Unlucky guy lost thousands of coins to a cheap $5 USB drive, which would be easily around $20 million today.

Moral of the story never use a cheap USB stick to save your wallet key and make sure to make multiple backups in case one backup dies.

2. Worlds Most Expensive $100 Million Pizza

When Bitcoin mining was just a passion and time pass of geeks, people minted tons of coins in a matter of days.

One such guy named Laszlo Hanyecz, a Florida based programmer minted thousands of coins and made the first ever Pizza purchase using 10,000 BTC. By todays BTC price those 2 pizzas are worth $200 million.

No surprise to commemorate the transaction May 22 is named Bitcoin Pizza Day and Pizza providers all over the world offer discounts to bitcoin users to commemorate Laszlo’s purchase.

3. Millions Buried Under Trash

A British man lost around 7500 bitcoins in his hard drive when he accidentally threw hard drive in trash while cleaning his home. The hard drive, which is worth millions of dollars is buried currently somewhere in Wales garbage land fill. As bitcoin is touching $20,000 that hard drive is worth around $150 million.

4. If Password Is Lost Wealth Is Lost

There are numerous stories over internet forums and reddit posts where people bought 100s of coins in the infancy days of Bitcoin only to realize they have no clue about wallet password. Don’t get surprised if even Elon Musk is also on that list.

In 2010 an Arizona State University professor bought around $70 worth of bitcoins for the purpose of demonstration to teach his class. This could have been in millions of worth now.

Another story is when a family lost fortune as the person who invested in bitcoin took his life and no one in his family knows the password/key to access the coins.

5. Nothing is 100% Safe

As they say no digital platform or digital currency is 100% safe, a person lost his $8000 worth of bitcoin when a hacker hacked his Gmail account and transferred all bitcoins in just 15 mins by changing password of his coinbase account. He regrets not using Gmail authenticator which made it easy for hacker to steal the password. $8000 is a small amount compared to millions but a hard earned lose hurts the same.

Bloqtimes recommended articles you should read:

• Positive Things Famous People Said About Bitcoin
• 10 Must Known Facts About Bitcoin
• How to Buy Your First Bitcoin Using Coinbase

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Infamous Discarded Hard Drive Holding 7,500 Bitcoins Would be Worth $80 Million Today

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

During the summer of 2013, while cleaning out his desk, a Welsh man named James Howells threw away a hard drive from his broken Dell Laptop.

Unfortunately, he realized several months later that the drive held 7,500 Bitcoin mined back in 2009. At the time, with Bitcoin approaching and finally just exceeding $1,000 in price, the scrapped hard drive would have been worth over $7 mln.

The story created a lot of hype about the rising the value of Bitcoin and the fortunes – or misfortunes – of the currency’s first miners and investors. Many of them had dabbled with the currency while it was in its infancy, only to forget about it and fail to backup their wallets.

Howells, who essentially dumped $7.5 mln (£4 mln) onto a landfill in Newport, Wales was of course furious, disappointed and dumbstruck. Over the next few years, he may have come to terms with his loss, only to have old wounds reopened as the currency began its long climb this year. At press time, Bitcoin’s price stands at $10,700, giving that trashed hard drive a value of over $80 mln.

‘That’s a bad idea’

Howell had mined those 7,500 coins himself as a hobby back when Bitcoin was a mere plaything for the technologically inclined. Howells related:

“You know when you put something in the bin, and in your head, say to yourself 'that's a bad idea'? I really did have that.”

Howells explains how he stopped mining when his girlfriend complained about the noise from the laptop and the heat it was producing. When he spilled lemonade on the laptop the following year, he dismantled it for parts. He initially kept the hard drive for a few years before finally discarding it.

Back in 2013, Howells said:

“I'm at the point where it's either laugh about it or cry about it. Why aren't I out there with a shovel now? I think I'm just resigned to never being able to find it.”

Once can only imagine how the unfortunate Howells feels today.

“Don’t tell my Wife”

Howells isn’t the only person to experience the pain of such financial loss. An Australian man, who wishes to remain anonymous for fear of the wrath of his wife, has also come forward with a tale of thousands of missing Bitcoin.

Alex, as he wants to be called, describes how in 2009 he mined “thousands, plural” of Bitcoin as part of a novel new idea. Then when the program for mining got a little too big and cumbersome, he gave up, deleted the program, and stashed his Bitcoin on a cheap USB. He said:

“The thinking was that it’s offline, not on my PC, so in case something bad happened to the PC — [if] it blew up, or [was] hacked — I still had a backup.”

Around the end of 2013, when the Bitcoin price peaked at just over $1,000, he suddenly remembered his wallet:

“[I plugged] the USB stick back in to try and access the file, but the stick died. It was one of those cheap made-in-China ones.”

Just Howells, Alex has had to watch the Bitcoin price balloon, counting the tens of millions of dollars he lost everytime a new milestone is reached.

“Worst mistake of my life. Never back up anything on a cheap Chinese-made disk or USB stick.”

Lost forever

Other stories of lost Bitcoins abound, including that of a Gizmodo editor who threw away a hard drive containing 1,400 Bitcoins in 2012. He paid $25 for the coins, at an average price of only 1.5 cents each. They would now be worth almost $15 mln.

These cases and others inspired a new study that has estimated that as many as four million Bitcoin are gone forever. The study puts the majority of the lost coins in the category of ‘ circulation’ as of course, those coins still exist on the Blockchain, they just cannot be accessed.

One difficulty in estimating the number of “lost” Bitcoin is uncertainty over whether Satoshi is still alive and still has access to his private keys. The study’s numbers assume that Satoshi’s approximately one million Bitcoins are lost, but of course, nobody can be certain of that.

Keeping coins safe

One of the first rules for Bitcoin newbies is to keep your coins off exchanges where they are vulnerable to online threats. However, there are a number of offline threats that can also occur.

These two case studies show just how easy it is to lose a digital asset that is not stored online; from a broken hard drive to a corrupt USB, even misplacing the thing becomes a problem.

Matthew Unger, founder and CEO of iComply Investor Services Inc. suggested:

“Just you keep some cash in your wallet, some in your bank account and perhaps the really valuable stuff in a safe, you need to manage digital currencies in the same way.”


Following the David Marcus Congressional Hearing: Will Libra end up as an Upgraded PayPal?

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

All eyes were turned to David Marcus yesterday who had to defend ’s new cryptocurrency project, Libra, in front of the Senate Committee on Banking, Housing, and Urban Affairs.

If one thing is clear, it’s that putting Libra under the regulatory purview of authorities – as clearly wishes – will be challenging to say the least.

Moreover, it could undermine its intended decentralized nature.

The Crux of ’s Congressional Hearing

Yesterday’s hearing in front of Congress called “Examining ’s Proposed Digital Currency and Data Privacy Considerations” was intense, at best. Especially pressing was Senator Sherrod Brown, the banking committee’s highest-ranking Democrat, who said: 

You really think people should trust you with their hard-earned money, I think it’s delusional. […] Will you accept all of your compensation in that new currency?

Marcus responded that he would, as Libra will be backed 1-for-1 “with a reserve.” 

Nonetheless, as pointed out by Blockstream’s CEO, Samson Mow, Libra’s main challenge is that it aspires to do too much. “Libra can’t be everything for everyone, and it can’t be both open and closed at the same time.”

Speaking on the matter yesterday, Marcus talked about the open-source nature of the project. 

We open-sourced it and as a result, it doesn’t belong to us anymore, It is now belonging to the community and they will help build the code and we will relinquish control over both the codebase and network through the process.

In a detailed thread, Mow maintained that should this statement be true, developers would be able to remove Libra’s KYC and AML components in non-Calibra wallets and still be able to interact freely with the network aside from on and off-ramps. 

This, on its own, conflicts another statement that Marcus made during the hearing:

Wallets will enforce the sanctions that are led by our national security apparatus and treasury.

Moreover, Blockstream’s CEO also commented on the following statement by Marcus:

We want to ensure people, as long as they have legitimate use of the product, can do what they want with their money.

This brings up the issue of defining “legitimate use”, which brings us to the challenges that a lot of existing centralized systems such as PayPal are already facing. This leaves the door open for the Libra Association to decide that a certain use is not legitimate and to freeze a user’s funds or simply de-platform him or her. 

What’s the Solution?

According to Mow, the only way Libra can guarantee compliance in all of these areas is for it to be in complete control over pretty much everything. That’s because it’s impossible to have only Calibra wallets require authenticated governmental IDs but not others. 

He points out that the only way this could work is if there were two pools of currencies which weren’t allowed to intermingle. But then the project would end up with a non-fungible currency which would fail to fulfill the goals set out to achieve. 

Still, Mow noted that it’s somewhat positive that will take its time to “get this right.” However, he also came to a rather interesting conclusion, suggesting that once Libra is fully compliant with every jurisdiction, it would simply end up being a more complex version of PayPal governed by a Swiss-based association. This naturally begs the question – why not use Bitcoin instead? 

It’s good though that Marcus said “we will take the time to get this right.” Once Libra is compliant with every jurisdiction, it will just be a more complex PayPal governed by an association.

Should’ve just used #Bitcoin.

— Samson Mow (@Excellion) July 17, 2019

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Read more on: Libra PayPal US Congress


10 Dramatic Stories of People Who Lost Their Bitcoin Private Keys

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

Bitcoin and cryptocurrencies have been a huge medium for investments in the last few years. The prominent reason is the high value of bitcoin and other cryptocurrencies. Who one would not buy some bucks having the value of one unit equal to some thousands of US Dollars?. Since the money involved is pretty high, these valuable investments also need to be secured and maintain privacy.

Losing an important credential in any field may cause a huge loss of property and crypto space is much vulnerable in case you lose your private keys. There have been a lot of cases in the past where people have lost a very huge amount via losing their bitcoin private keys. In this article, we will see the list of 10 dramatic stories of people who lost their bitcoin private keys:

1. A person, named James Howells lost his bitcoin private keys and it cost him a loss of around $79 million! Howells had around 7500 bitcoins in 2009 and had stored the private keys of the bitcoins in a hard disk.

Four years later, he had two similar hard disks in a drawer which one was empty and corrupted while the other one was containing the bitcoin credentials.

Unfortunately, in the sake of throwing the corrupted disk, he threw away the disk that contained the bitcoin private keys! This silly mistake cost him around $79 million. IT was so unfortunate for Howells.

2. A person lost 30 bitcoins due to a keylogger program. He was unaware that a keylogger program has somehow entered in his laptop without his knowledge. A keylogger is a fraud program which mainly aims to track the credentials of your system.

As usual, one day he was looking for the private keys and the value he has in his pockets in form of bitcoins. Another day, he found that all of his coins were already sold and that too without his knowledge.

First of all, he thought, he was entering the wrong credential but finally end up finding a keylogger program in the system when scanned by a system scanner software. He lost around $300000!

3. Syl Turner is a software engineer in Atlanta. In 2010, he bought two bitcoins and saved the private keys in his computer. He recalls, at that time, bitcoin was not so valuable so he didn’t care about the keys.

A few years later, he bought a new laptop and threw his old computer in his attic. In 2017, when he heard about the value of bitcoin, he recalled that he also had mined two. He went to his attic and checked for the old computer.

The computer was not working now and all the data was erased. And unfortunately, he lost around $35000.

4. A person in Switzerland had saved his bitcoin private keys in a USB drive which he bought in 2009. In 2016, he transferred the file containing these private keys to his personal computer as the USB was on the brink of breaking.

He thought he would buy another new USB and would save the files. However, before he could buy a new one and the software of the personal computer crashed and now, he had no back up of those private keys.

The lost keys had the value of around $40000.

5. As per Michael Yang, his friend along with his business partners bought around 500 bitcoins. For sake of trust, his friend had half of the bitcoin private keys while his partners had the rest half private keys.

Unfortunately, all of a sudden the business partner of Yang’s friend passed away and so around $9.5 million he lost as his friend and the family of the partner failed to retrieve the half of the private keys.

This was so heartbreaking for Yang’s friend.

6. Forgetting your bag in a public place always cost you, but not up to the extent that John lost with the bag containing the USB of bitcoin private keys.

John, a college student had bought 10 bitcoins in 2012 and was provided a USB containing the private keys of the coin. In 2017, while shifting from one place to other, he forgot the bag containing USB somewhere in the way.

And this mistake cost him around $100000!

7. Alex mined around 1000 bitcoins in 2009 and stored the private keys in a USB drive so that if anything happens to his computer, he would still have a backup.

After a few months due to some technical error, he wiped all the data of his computer by assuming he still had the backup for bitcoins. When he heard about the value of bitcoin in 2017, he was dreaming to be a millionaire.

He inserted his USB drive in the laptop but unfortunately, the drive became corrupted and eventually died.He couldn’t believe he lost millions of dollars in a few seconds!

8. Amily, of Ukraine, mistakenly deleted the only backup file containing the bitcoin private keys. She had saved the files of keys of about 10 bitcoins in one folder and also had some other folders in the same directory in his system.

She first opened the folder containing keys and she realized that there are some folders that she didn’t require them. So, she entered Shift+Delete.

As the folder containing the keys was also selected and Amily was not aware of that, the file got permanently deleted from the system and hence lost around $120000!

9. A man in Japan lost around $50000 in form of bitcoin and he couldn’t blame anyone except his pet dog! He mined around 50 bitcoins in 2010 and stored the private keys in a USB. He had a pet dog.

In 2016, while shifting the apartment, USB slipped from his hand and suddenly, the pet thought it to be some playing stuff and chewed it. He couldn’t believe that he just lost a significant amount of money.

Seven years later, in November 2017, if he would have wanted to sell those coins to redeem money, the value would have been around $50000.

10. In 2016, NSW in Australia was hit by the flood. A man who had saved his bitcoin private keys in a hard disk lost around $50000 in this flood. He has kept the hard disk in a drawer and was on holidays with his family.

The flood hit his town and before he could save the disk, his house was merged with flood water. The flood water entered inside the disk and made the disk corrupted and of no use.

When he came back, all the details were wiped from the hard disk as it was of no use then.


Bitcoin is Part of a Global Populist Revolt: Former Trump Strategist Steve Bannon

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

Photo: Nordiske Mediedager / Flickr

Former White House Chief Strategist, Steve Bannon, has expressed his views about the potential power of Bitcoin and blockchain, as a key part of a Global revolt.

Stephen Bannon, the popular former Chief Strategist for the Donald Trump administration, has said that for him, Bitcoin is key to a “global populist revolt”. He expressed this view on Friday the 2nd of August, during an interview on CNBC’s Squawk Box, a morning business, politics news, and talk show.

BTC is a Part of the Revolt

Bannon, who is also the co-founder of a conservative news platform, Breitbart, accorded Bitcoin some esteem, saying:

“Cryptocurrencies have a big future. They could be a very important part going forward, particularly in this global populist revolt.”

This is not the first time Bannon has praised crypto and he is known to hold some Bitcoin himself.

Back in March, Bannon gave a lecture in Zurich, where he expressed a belief that cryptocurrencies and blockchain technology have more than enough potential to give institutions and even governments all over the world, enough individual power to resist unfavorable policies from the powers that be. According to him, these powers “debase your currency and make slave wages.”

Re-iterating this, Bannon believes that cryptocurrency is also a great way for entities that are somewhat reliant on big powers the Dollar, to break free and pull in some level of dominance for themselves. He also suggested cryptocurrency, ’s Libra, has the potential to tackle traditional payment methods.

“I happen to think that was principally against some of the Chinese Alibaba, Tencent, etc. – these payment systems. I think that what people have to confront now, and people have started looking at is how the Chinese and third world countries – in Sub-Saharan Africa, in South Asia, and I think potentially in Latin America – are starting to put these payment systems in.

They are going to try to give them global dominance and be able to get off the reserve currency of the dollar.”


Since he left his position as the White House Chief Strategist back in August 2017, Bannon’s views have somewhat aligned with that of his former boss. However, these recent statements have gone against the President’s opinion on cryptocurrency.

A few weeks ago, Trump joined crypto naysayers and regulatory supporters, deriding the cryptocurrency sector. At the time, the President said he is “not a fan of Bitcoin and other cryptocurrencies which are not money and whose value is highly volatile and thin air.”

Luckily, the pronouncements against Bitcoin did little or nothing to the sector as it didn’t seem to lose significantly because of the criticism from Trump.

In fact, many proponents were quick to point out that even though the comments were less than supportive, it was the first time the President would openly speak up about crypto, meaning that even with all the disapproval from many quarters, the sector is slowly becoming difficult to ignore.

Brian Armstrong, CEO of Coinbase, also corroborated this with a response saying:

“Achievement unlocked! I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago.”

Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He s to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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Another Wannabe Satoshi Nakamoto Appears in Kleiman vs. Wright Lawsuit

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

Photo: Pixabay

A new person has stepped forward and claimed to be Satoshi Nakomoto, the pseudonymous creator of Bitcoin. Belgian citizen, Debo Jurgen Etienne Guido made his claim in a letter filed with a federal courthouse in Florida on July 22.

Right when we all thought that Craig Wright was the worst that can happen to the “Who is the real Satoshi” saga, someone decided to add another character to the story.

Just after Paul Solotshi Calder Le Roux, the creator of encryption software E4M and TrueCrypt, the cryptography encryption software Satoshi Nakamoto ly used to lock up his 1 million BTC, was doubted to be real Satoshi, a Belgian citizen named Debo Jurgen Etienne Guido made his claim in a letter filed with a federal courthouse in Florida on July 22.

Addressing his letter to Judge Bruce Reinhart, the judge who is overseeing the ongoing Kleiman v. Wright case, Guido wrote:

“I hereby testify, by written letter — I am the genuine and only originator/creator of the genesis block of the Bitcoin blockchain. I used the handle Satoshi Nakamoto and mail [email protected] to write and publish the whitepaper bitcoin.”

Guido also claims that he generated the PGP key 0x18C09E865EC948A1 and says the key was trust signed by an inner circle of people. Allegedly, he has been telling the public he is Satoshi for quite some time now and has been using a account called @realsatoshin since 2015.

Yes. My pgp key 0x18C09E865EC948A1 was trust signed by Hal T. Finney @halfin , Gavin Andresen @gavinandresen, Pete(r) Todd @peterktodd and Wladimir van der Laan @orionwl. #satoshi #nakamoto #satoshin

— Satoshi Nakamoto (@realSatoshiN) July 4, 2019

Before filing his letter in court on July 4, 2019, he tweeted that his PGP key was trust signed by Hal Finney, Gavin Andresen, Peter Todd, and Wladimir van der Laan. Bitcoin Core developer Wladimir van der Laan said:

“There are no known messages signed by that key, but it was distributed along with early Bitcoin, so it could be Satoshi’s real key, but mind the uncertainty. My signing it was a mistake about how GPG web of trust is supposed to work at the time, and I revoked it later.”

Let’s just remind you what’s this all about. Back in February 2018, the crypto entrepreneur and self-proclaimed Bitcoin inventor Craig Wright was sued for allegedly misappropriating billions of dollars’ worth of crypto estate. Ira Kleiman sued Wright on behalf of the estate owned by his brother, the late Dave Kleiman.

The suit states that Wright schemed to grab Dave’s Bitcoins and his rights to a specific intellectual property linked with the bitcoin technology. Kleiman is seeking the return of a 1.1 million Bitcoins mined by the two or its fair current market value. He also seeks compensation for extensive IP infringement.

Wright has also filed court documents in an effort to show that he held a trust deed with the estate. Lawyer Stephen Palley claimed that these documents were faked in virtue of the document’s metadata. He said the original document uses a Microsoft font that was copyrighted in 2015, while the document is from 2012.

Additionally, Craig Wright admitted last month that he could not comply with a court order to list his early BTC addresses. According to Wright, he cannot easily retrieve the data because he shared a critical component for accessing the funds and wallets with Kleiman prior to his death.

Guido’s letter to the Florida courthouse and Judge Reinhart emphasizes that he never had any contact with David Kleiman. The letter also insists that Craig Wright has no single private key of Guido’s known PGP key on the genesis block. He tweeted:

May the story of #Craig #Wright teach you all. Don't look for people who have big ego. Do not look for pretty words. Don't take for granted, things from others. Including my claim (but I am #satoshi #nakamoto, You will see). And for sure. YOU are all #unique and #great. #satoshin

— Satoshi Nakamoto (@realSatoshiN) July 10, 2019

He said:

“The man has no clue how the genesis block is composed as he did not mine the blocks assigned to the so-called whale wallet.”

Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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‘Worst mistake of my life’

Australian man loses big because he backed up his bitcoin on a Chinese-made USB stick

ALEX could have been a millionaire.

In late 2009, when the digital cryptocurrency bitcoin was still in its infancy and a single PC could “mine” a few coins in a day, the self-described technology enthusiast “got into it just for fun”.

“In the tech community we didn’t think bitcoin would be that big,” said the Melbourne game developer, who asked not to use his real name because “if my wife knows I’m dead”.

“It was just applying our PC hardware to a global network, something novel. In the early days of GPU [graphics processing unit] mining, a single card could mine quite a few coins per day.”

As it progressed, the bitcoin program grew to gigabytes in size. “It kept on ballooning so eventually I deleted it [and] backed up the small encrypted wallet file to keep on my USB stick.”

That “wallet” contained the unique cryptographic “keys” for thousands of bitcoins Alex had mined.

“The thinking was that it’s offline, not on my PC, so in case something bad happened to the PC — [if] it blew up, or [was] hacked — I still had a backup,” he said.

Around the end of 2013, when the bitcoin price peaked at just under $US980, he suddenly remembered his wallet.

“[I plugged] the USB stick back in to try and access the file, but the stick died. It was one of those cheap made-in-China ones,” he said.

Today, as the current price smashes through a new milestone of $US10,000, 1000 bitcoins works out to more than $US10 million ($13.2 million). Alex puts his losses in the “thousands, plural”. “Worst mistake of my life,” he said. “Never back up anything on a cheap Chinese-made disk or USB stick.”

Unfortunately, Alex’s story is not unique. As bitcoin mania reaches fever pitch, attention is turning to bitcoin’s missing billions.

Of the more than 16.7 million bitcoins in circulation, nearly 4 million could be lost forever, according to new research from digital forensics firm Chainalysis, a detailed empirical analysis of the blockchain — the “digital ledger” which records all bitcoin transactions, and which gives the currency its value.

The study, reported by Fortune, concluded that between 2.78 million and 3.79 million bitcoins — 17 to 23 per cent of existing supply — are lost, amounting to more than $US30 billion.

Long-term investors who mined coins in the early days — known as “hodlers” — own the vast majority of lost bitcoins, according to the analysis, which also assumed all of the one-million-plus “original” bitcoins belonging to its inventor “Satoshi Nakamoto” are lost forever.

One big source of uncertainty is whether out-of-circulation coins in the hodler category are actually lost or just being hoarded.

“It’s very easy to lose crypto,” said Martin Davidson, co-founder of Melbourne-based not-for-profit Blockchain Centre and business development director at Blockchain Global.

“Bitcoin is a predetermined currency issuance system, so there will only ever be 21 million bitcoins created up to the year 2140.

“It started in 2009 with the currency issuance of 50 bitcoins every 10 minutes, and every four years it goes down by half. It went down to 25, now we’re in the third phase where it is 12.5 bitcoins every 10 minutes.

“When bitcoins are produced, they have a private key associated with them. It works using key-pair cryptography — you have a public address and a private key that go together. The public address is what you use to send bitcoins, the private key is what you need to spend them.

“If you lose the private key, because of the mathematics involved and the strength of the cryptographic system, which is what makes it so safe, it’s impossible to ever get it back. What’s commonly happened is people have just deleted the file off their computer — the text document that holds the private key.”

While many have made analogies with burning a $100 note or losing a gold bar off the side of a pirate ship, Mr Davidson agreed that the ease with which bitcoins can be accidentally lost forever at the press of a button — particularly given how valuable they now are — can make people uneasy.

“Absolutely, that is one of the largest barriers to adoption,” he said.

“What people need to understand is this technology was born the cipher-punk movement, using cryptography for people’s individual freedom and privacy for protection against the state.

“It was never designed to be user-friendly, but obviously now people are investing hundreds of billions of dollars into these systems that are still nascent with respect to the usability and design of the applications.”

In order to keep their keys safe, some users literally print them out in what’s known as a paper wallet, but Mr Davidson said the best option was a Trezor USB wallet, which retails for about $170.

“They’re known as the best in the world, the most secure. They have firmware on the device designed to keep your private keys safe, they can store bitcoin, Ethereum, some other currencies.”

Bitcoin’s exponential 1000 per cent rise this year has captured imaginations and led to warnings of a “bubble”. Its current market capitalisation — the price multiplied by the number of bitcoins in circulation — is now nearly $US169 billion, according to Coinmarketcap.

On Tuesday, IG Markets chief strategist Chris Weston described the massive influx of retail investors getting into the cryptocurrency as a “mania” fuelled by press headlines and fear of missing out.

It came as Mike Novogratz, trader with Fortress Investment Group, told an industry conference investors should brace for “wild crashes”. “This is going to become the biggest bubble of our lifetimes by a long shot,” he was reported in the New York Post as saying.

Meanwhile, legendary investor Jack Bogle, founder of Vanguard and pioneer of “passive investing” championed by the s of Warren Buffett, also weighed in. “Avoid bitcoin the plague,” he told a New York conference, according to Bloomberg. “Did I make myself clear?

“Bitcoin has no underlying rate of return. You know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.”

The 88-year-old said it was “crazy” to invest in the currency. “Bitcoin may well go to $US20,000 but that won’t prove I’m wrong,” he said. “When it gets back to $US100, we’ll talk.”

AMP Capital chief economist Dr Shane Oliver last week warned that “every generation gets sucked in” to an investing craze bitcoin, which Japan Post Bank chief investment officer Katsunori Sago has described as “worse than the IT bubble” of the late ’90s.

Many have defended bitcoin, however, dismissing suggestions of a looming crash.

Leigh Travers, chief executive of Perth-based digital currency and blockchain advisory group DigitalX, put the long-term value of bitcoin on par with gold — or over $US400,000 — while others are keen to prove its real-world usefulness.

Brisbane-based start-up Living Room of Satoshi says Australians are already using bitcoin to pay $1 million worth of bills every week, and a growing number of properties are being offered up for sale in exchange for the currency.

On Monday, a Cairns man put his massive 32 hectare property on the market for 100 bitcoin — nearly $1.3 million — while a $2.5 million Mount Macedon estate this week became the first Victorian property to join the crypto-craze.

“Bitcoin is real money,” the vendor said in a written Q&A released by the real estate agent. “In fact, it’s better than most other monies. Bitcoin is deflationary which can be hard to spend because it is constantly rising in value.

“I will accept the Australian dollar value [$2.5 million] at the time the property is settled. If the cost of bitcoin continues to rise then I will be getting less bitcoin. Because we already hold bitcoin, nothing could make me happier.”

Alex, for his part, said if he “had the spare cash” he would consider getting back into bitcoin, which he believes is a “fantastic gold substitute for long-term storage of wealth” that also has many other useful applications.

Earlier this year, he mined “a lot” of Ethereum, the now second most valuable cryptocurrency which has similarly soared in value. “One day, maybe Ethereum might restore what I lost with bitcoin,” he said.

“I’ve invested in Ethereum, Ethereum Classic and a few other coins while they were still priced cheap. It’s been good. But some days it’s depressing to think of the thousands of bitcoins I lost because of stupidity.”