Major cryptocurrency holder loses $ 1.6 billion in bitcoin due to crypto wallet vulnerability

In the early days of bitcoin, when the cryptocurrency was worth less than $ 0.05, a developer known as ALLINVAIN mined BTC and traded tokens. His experience as one of the first users reflects the acute need for security measures. According to experts, the story of ALLINVAIN remains a reminder of the vulnerabilities faced by the first users of BTC.

In 2010, ALLINVAIN launched one of the first bitcoin exchanges, Bitcoin Express, which allowed users to buy BTC using PayPal. The first transactions sold 1000 BTC for just $ 5. At the time, he was mining about 1200 BTC daily using a laptop. However, the ease of mining bitcoins changed in 2011 when more people joined the network, which dramatically increased the complexity of mining.

To support the bitcoin economy, ALLINVAIN began buying and selling real-world goods with bitcoin, for example, acting as a buying agent for Canadian users who wanted to buy coffee cards. His dedication to the bitcoin economy earned ALLINVAIN the status of a «bitcoin whale» as he accumulated over 25,000 BTC.

In early 2011, the value of bitcoin rose to $ 30, which was the first significant bubble. At that time, ALLINVAIN’s holdings amounted to about $ 500,000. However, on June 13, 2011, his fortunes changed dramatically when the miner discovered that a transaction worth 25,000 BTC had been made from his crypto wallet without his consent.

«I am completely devastated. I just woke up and saw that a very large portion of my bitcoin balance is gone. If only the wallet file was encrypted on my hard drive. I feel like it’s my fault that I didn’t move this money to a separate computer without Windows,» ALLINVAIN wrote at the time.

Today, the amount of the theft is estimated at about $ 1.6 billion. The developer admitted his mistake, noting that the unencrypted file of his wallet was compromised by a Trojan virus disguised as mining software.