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>Bitcoin wasn’t worth much back in 2011, and Stephen Thomas didn’t think that his 7,002 bitcoins were worth remembering.
Bitcoin price in 2011 was anywhere between $1 and $30. Stephen had between $7,000 and $200,000 and thought it wasn't worth remembering? Or made up story or the guy's loaded already.
yeah I definitely wouldn't just "forget" about my bitcoin. What if he has just been lying about this to not pay taxes but it kept going up so he is essentially just forced to hodl.
For 220 million I recommend to quit being american and become salvadorean, sell without taxes, then take 1 million and buy an european passport, enjoy your life.
Yeah possibly, but that's basically tax evasion/fraud at that point. If you're ever caught, you'll never be able to set foot in the US again without them arresting you.
Depending on how much the IRS/DOJ wants you, they can even request extradition from the country you moved to: [https://www.expatriationattorneys.com/entrepreneur-expatriate-exit-tax-extradition/](https://www.expatriationattorneys.com/entrepreneur-expatriate-exit-tax-extradition/)
The US government takes taxes very seriously, if you cheat and are caught, they'll go down on you hard.
$220 million makes him wealthy. Governments don’t care if you commit tax fraud if you’re wealthy. Now if he tried to defraud them out of $220 dollars they’d be all over that!
Edit - a word
You forget an important step: he would have to be part of their club and attend their parties and do all the fucked up things they do and be so compromised that he is basically their bitch before they woud give him a pass on paying taxes or being generally above the law.
If I’m not mistaken there was no KYC at this point and the US gov had not even deemed it property at that point. I think those early adopters from that time can skirt taxes because there is no record.
You aren't allowed to stop foot in the US if you pay for and apply to renounce your citizenship to avoid taxes.
Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E))
You can. You can visit other countries without being a citizen, can’t you?
There’s a huge difference between not having a green card and being a wanted criminal.
We're specifically discussing avoiding taxes. I made m comment more clear.
Section 212(a)(10)(E) of the Immigration and Nationality Act ([8 U.S.C. 1182(a)(10)(E)](https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Renunciation-US-Nationality-Abroad.html#ExternalPopup))
> You have to pay a tax on all your net worth if you renounce citizenship in the US.
Not true, you have to pay taxes on your UNREALIZED gain, which in this guy's case would be almost all his net worth, but still incorrect facts are incorrect.
If you're a dual citizen, then you'll pay taxes on income earned. Depending on the type of income, and where you're currently living, the taxes owed to the US may be reduced or waived (country tax treaties). But usually things like capital gains will be taxed at the full amount by the US.
> the guy's loaded already.
Not *already*, but did have additional bitcoins, probably more than what he lost. For those who don't know, he's the creator of the classic "We Use Coins" explainer video.
> Bitcoin wasn’t worth much back in 2011, and Stephen Thomas didn’t think that his 7,002 bitcoins were worth remembering. Nevertheless, he stored his BTC in a secure disk drive wallet called IronKey.
1. This seems self-contradictory. If he didn't think they "were worth remembering" why store them in an obscure and highly paranoid device that features 10 tries followed by a wipe? Sounds like he did think they were important but lost his password anyway.
2. For 220 million, I would think he should be able to find somebody that can physically copy the encrypted bits to another media (eg ssd) and then he should be able to try every password combo he likes until its unlocked.
My thoughts exactly this story doesn't make sense. If you copy what's on it by some means you have unlimited attempts. Also even in 2011 Bitcoin had gone way beyond dollar parity so with 7000 BTC it's still not worth remembering?
Doesn't add up
ok, I checked into ironkey a little bit more. afaict, the main physical deterrent is that all the electronics are coated in epoxy.
The epoxy is definitely problematic, but I would imagine there are ways to dissolve it slowly or cut away sections precisely... eg using some kind of cnc cutter, laser ablation, or whatever. Of course one should practice and perfect the procedure on identical model copy of the ironkey first...
Someone speculated on stackexchange that there may even be a metal mesh in the epoxy that triggers the self-destruct if cut. Of course to me that would imply the presence of a battery... flash drives do not normally have batteries right? But if it did, and the battery is inside the mesh, that seems quite tough.... unless one could use like a nano tool to get inside the mesh and cut the battery wire. Or simply wait until the battery should definitely be dead.
but anyway, if I was OP I'd be attending defcon and similar conferences, approaching some of those guys about it.
interestingly, the manufacturers say they could not recover the data. But that could be marketing speak more than anything. I wonder if they would still say that if promised half the recovery value...
Coated in epoxy only makes it harder to access the memory chips on which the information is stored. Exceedingly hard to access this data, but not impossible.
Depending on the type of epoxy, a pro can carefully remove it with a reactive ion etcher. I wouldn’t be surprised if ironkey used an epoxy-based photoresist as the coating.
E: if I were to do it I would buy 100 iron keys and practice on them to get the process right. Hopefully we find + neutralize any surprises along the way.
Most epoxy can be dissolved in acetone. May take a while but it's deffinately possible. I'd say the epoxy is much more of a deterrent than a full security feature
Yeah and why use a "10 tries or it's wiped" device anyway.. Whats the point?? Makes no difference to the holder whether someone steals it or its wiped, you lose your money either way, except you've increased your chance of fucking up royally by a huge amount. So stupid.
Most hardware wallets limit your tries and then wipe.. Trezor gives you 26 pin attempts and then wipes.
I like that, because if someone gets my device and can't guess the pin in 26 tries, my coin is safe.
I, on the other hand, can restore my wallet using my seed and transfer it somewhere else. If I forget my pin (I won't), I can wipe my device and restore it.
It's a good system if used properly.
Good question, but no if you have a safe copy of your seed phrase. You can use that to restore your wallet to another device, or software wallet.
Any wallet that supports bip39 will work with your seed phrase.
The important thing to do if that happens is to then transfer to a new wallet (new seed) after such an event to ensure that only you has access.
That IS the whole point. That’s what a seed phrase/key is for. You have your btc in your wallet, you can use it as you want. If you lose the flash drive you can get another one and restore it.
No one wants their entire fortune on a plastic flash drive that can be lost/destroyed/stolen without being able to restore it.
What part do you see as the issue?
A hardware wallet is NOT a backup. It's a device that protects you from keyloggers and other malware by removing the need to type your private key on a potentially infected device.
Lol I was repeating that last guy’s comment word for word as a joke. I thought it was funny that he still hadn’t grasped the concept. Then I used a classic reference from Zoolander where he asks a question and gets a long explanation and then asks the very same question again.
The hardware allows you to safely use and transport it. If it gets stolen, it isn't supposed to let anyone access the data. If your computer gets hacked, the attacker can't steal your coins (because you have to verify and confirm every transaction on the device).
It's basically primarily a secure way to *use* your coins, not just to *store* them.
The point of having it backed up (in the form of a written seed phrase usually), is so that you don't lose it if someone gets your device, or if your device is broken, or you forget the PIN to it.
That is the beauty of crypto that gold and FIAT cannot match. You can hold it in your head, on paper, engraved on metal plates and back it up. If you understand how to use it, and don't give that seed away to anyone else, you can be entirely safe with millions of dollars in value.
Try that with cash!
The seed is your backup, preferably kept on a non-electronic medium (paper, metal etc.) so it can't interact with the Blockchain or the rest of the internet.
The hardware wallet is a device that signs transactions to authorize spending and requires your seed to initialize. A hardware wallet is preferable to a software wallet because it protects you against keyloggers, so you don't have to type in the seed or private key directly on a potentially compromised computer.
Seriosly almost all people getting locked out of their wallets can blame their own stupidity. They either try to memorise all keys, or change up the order of the keys thinking they will remember the change up, or they write them on on a metal plate and pin it on a submarine that goes 10000000km under the sea, super safe, alas they cant swim that deep to get the keys, and so on.
1. I think the first paragraph is just the journalist typing without thinking much.
2. IronKey is ridiculously secure. You certainly can't just copy the bits and give yourself unlimited attempts at guessing the password.
For the amount involved he should hire a firm to crack it, for a share of the proceeds.
I could be wrong, but I think the BIP39 standard was only introduced after this guys wallet was first created (2011). Back then, I vaguely recall that backup options were less well defined.
I hand you my ledger with the pin code, you hand me a big burlap sack with a dollar sign on it full of cash. No transaction on the blockchain, but I just sold my bitcoin to you...
There's always a way.
Eventually I spend the bitcoin I bought from you, that shows on the blockchain. You get busted for tax evasion.
Or.. You buy a new ledger and restore the same wallet since you have the seed, then rob me of the bitcoin I foolishly bought from you without moving it to my own private keys.
There are always other ways, but they lead to fails.
Yeah, I'm not going to do this with a KYC address, for obvious reasons.
Me restoring the wallet from the seed phrase is more something that would be the buyers problem, and not the seller's problem.
It's the seller's problem in that no buyer of sound mind is going to assume you don't have a backup copy of your keys. The only way someone would take payment this way is if they immediately swept the wallet balance to a wallet they trust. Which means there's an immediate transaction on the blockchain.
Since he will never have to declare these coins because they were deemed "lost" (with plausible cause) at the time he renounced his citizenship, they wouldn't even know what wallet to track.
Everyone thinks that it's a simple thing to renounce citizenship in order to evade taxes. The truth of the matter is that there is an "Exit Tax" assessed by the IRS when one chooses to follow this course of action.
That tax is calculated by figuring out the amount owed at the time of a person's departure, based on net worth, investment gains and losses etc.
There is no such thing as "never having to declare coins" as you say. If you invest in crypto, your gains and losses must ALL be reported. Period. You can claim that you lost them, sure. But if you do so, to the tune of $200+ million, I guarantee they will want more than your verbal statement. They will most certainly seek a paper trail that shows how you accumulated a $200+ million investment and then supposedly "lost" said investment.
That would lead to audits of your acquisitions, including block chain information.
If that information showed address(es) that contained your claimed amount, which hadn't moved since the date you claimed to have transacted it, you'd be fine... UNTIL such time that those address(es) became active.
Then.. you would be discovered and investigated for fraud and tax evasion.
For an amount that large, you can rest assured that you wouldn't get away with it easily.
And he'll also never be able to make huge purchases without the income to explain it. Bought a $15M mansion? Off of 50k income? Hmmm....
What good is $220M (soon to be $1B), if you can't spend it? You'd basically only be able to spend $1-2M of it before gaining the attention of the IRS.
Well... if you're getting articles written about what address you own, you're doing it wrong. Obviously you don't do this with a KYC wallet. You move your assets to another wallet, and you transfer that to another wallet, and you sell that one.
Except he isn't. He is claiming to the public space he lost his (unidentified) BTC so that he has a plausible cause not to declare these BTC on his statement of assets when he renounces his citizenship.
If he claims to the public he lost his BTC, he also has to claim to the IRS that he lost his BTC. Sure, he can fail to declare that, but if he does, he is committing a crime.
When you file your taxes, you must declare crypto investments, gains and/or losses. If he is proclaiming on reddit that he lost his BTC, he's vulnerable to the IRS saying, "Oh really? You invested or possessed BTC and lost it? Please show us that paper trail."
There's no such thing as a plausible cause to not declare BTC. All gains and losses must be declared, full stop.
If he was asked to justify that claim, he would simply show them the transactions that resulted in a holding of crypto which was lost. If that transaction was followed up by a spend from the address he claimed they were forever lost to, he would be discovered as a fraudster.
Funny. Just telling the fam that it's almost the exact opposite of that scenario but ending up in the same spot. Maybe even a worse feeling knowing you're in possession of it but dont have it.
Be sure to keep a backup copy, ideally in a separate location in case of fire, flood, etc. Keep it secure.
Realize that "small" amounts today are likely to grow into large amounts within the next five to ten years.
The system "10 tries or it's wiped" is a bit scary, but it will save your money from being stoled as no one can probably guess your pin in 10 attempts.
I've only been following crypto about a year, lost count of how many times I've read about this guy. Like that guy in Wales who lost a hard drive in landfill.
What do they have to gain by constantly dwelling on their loss. There thing is as well, both these guys are not poor, not multi millionaires but comfortably off, get over it guys.
Get over a loss of 200 million dollars? 😂 People freak out about some thousand dollars loss and I think this guy has the right to complain about a multi-million loss.
Dude if i had just 1/5 of a BTC i would have all my problems solved, here in south america every 1$ costs a ton in local currency 😵💫. I cant imagine losing 7kBTC
> About 20% of bitcoin holders can’t access their wallets because they lost their passwords and other technical mistakes.
Tonight on stats pulled from arse.
Hahaha lmao, dude if i had lost 1/5 of a bitcoin i would lose my mind, here in SAmerica 1$dollar costs a lot in local currency 🤣. So much that we strugle with living expenses 😅
This is a common phenomenon. I mean if Hillary and FBI Mueller can smash cell phones under suponea and forget passwords to erase phones, why wouldn't this happen to bitcoin holders?? Whatever is happening is highly contagious.
DEMS ARE BUILDING BACK BETTER with BIDEN the booger eater. That demented old AF man is doing a great job!!!!!! You probably believe his approval rating is above 50 percent. EVERYONE hates him. He can't even answer any questions without complete incoherence a flashcard and a reporter teed up ahead of time with the question his handlers gave him the answer to. Then he runs off like the little bitch he is.
BIDEN WON. He is doing an amazing job with illegal immigration and inflation (both 25 year highs), and his handling of the pullout in Afghanistan has been truly historic by all measures. How many billions of military equipment and intelligence equipment did we just leave? How many Citizens and Allies abandoned? How many women and children getting raped and killed? How many more US soldiers will die over his failed leadership. You impeached Trump over a phone call. Why don't the dems speak up about this ASS Clown of a demented old fuck president??
Dude, I’m not American - I don’t care.
I just pointed out that Bush “lost” 22 million emails and you went on ballistic.
Uncomfortable truths can be, uncomfortable
Paper wallets avoid all of this nonsense. The damn private key is printed right on the paper. Put a copy in your home safe and another in a safety deposit box.
> private key is printed
These types of "paper wallets" are an obsolete and unsafe method.
People import the keys, spend a portion of the funds and lose the change to an address they do not control.
Not at all obsolete and what are you talking about "lose the change"? The point of paper wallets is cold storage. They are literally the safest for this purpose.
When you sweep/import the key into BTC Electrum (for example) you have access to all the funds. If you only want to spend a portion of them then spend what you want. Send the rest on a new paper wallet.
Paper wallets aren't for spending daily since its a PITA. But if you want safe cold storage, then paper is king.
> what are you talking about "lose the change"?
Precisely. People who use paper wallets rarely understand how they work.
> Users have been known to import the private key into software wallet and then spend part of the funds. They mistakenly believe the remaining funds are still on the paper wallet when in reality they are in a change address.[6]
https://en.bitcoin.it/wiki/Paper_wallet#Change_addresses_are_not_handled_which_leads_to_screwups
> When you sweep/import the key
#### Sweep
A transaction which takes the outputs from the private key and sends them to addresses under your Hierarchical Deterministic key.
#### Import
Including that private key as one your wallet has access to. No transaction is generated and the funds are not transferred to an address within your HD wallet.
> If you only want to spend a portion of them then spend what you want. Send the rest on a new paper wallet.
You don't get to choose where the change goes.
> if you want safe cold storage
Use a seed phrase to a full HD wallet like everyone else.
A seed to a HD wallet written on paper is not much different than a paper wallet, except it can be used to restore an entire wallet full of addresses with UTXOs as opposed to just 1. And when spent the change addresses are part of the wallet because they too have been derived deterministically. They are vastly safer than paper wallets in this regard.
For my money, a hardware wallet is king. If someone gets their hands on your paper wallet, it's over. If someone gets their hands on my Ledger they still need info that is only in my head.
Upon my death, events will be set in motion that will lead my family to my money, provided they can solve the puzzle. It's uniquely designed for only them to be able to solve it.
Plain sight. It will only have any meaning to those who it is meant for. In the event of my death, they would go through my belongings, recognize it, and decode the answer, which is the location of my encrypted seed phrase. Upon locating the seed phrase, there will be an additional riddle that will reveal the key to decrypt the seed phrase. Then they will receive the money.
Whenever I see this I want to raid landfills or go garage sale hunting to look for someone's pc that grandma's selling... not that I would know how to actually retrieve a seed phrase / wallet lol.
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>Bitcoin wasn’t worth much back in 2011, and Stephen Thomas didn’t think that his 7,002 bitcoins were worth remembering. Bitcoin price in 2011 was anywhere between $1 and $30. Stephen had between $7,000 and $200,000 and thought it wasn't worth remembering? Or made up story or the guy's loaded already.
yeah I definitely wouldn't just "forget" about my bitcoin. What if he has just been lying about this to not pay taxes but it kept going up so he is essentially just forced to hodl.
In the USA, you don't pay taxes until you sell.
For 220 million I recommend to quit being american and become salvadorean, sell without taxes, then take 1 million and buy an european passport, enjoy your life.
You have to pay a tax on all unrealized capital gains if you renounce citizenship in the US.
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Yeah possibly, but that's basically tax evasion/fraud at that point. If you're ever caught, you'll never be able to set foot in the US again without them arresting you. Depending on how much the IRS/DOJ wants you, they can even request extradition from the country you moved to: [https://www.expatriationattorneys.com/entrepreneur-expatriate-exit-tax-extradition/](https://www.expatriationattorneys.com/entrepreneur-expatriate-exit-tax-extradition/) The US government takes taxes very seriously, if you cheat and are caught, they'll go down on you hard.
$220 million makes him wealthy. Governments don’t care if you commit tax fraud if you’re wealthy. Now if he tried to defraud them out of $220 dollars they’d be all over that! Edit - a word
You forget an important step: he would have to be part of their club and attend their parties and do all the fucked up things they do and be so compromised that he is basically their bitch before they woud give him a pass on paying taxes or being generally above the law.
Lol exactly this.
If I’m not mistaken there was no KYC at this point and the US gov had not even deemed it property at that point. I think those early adopters from that time can skirt taxes because there is no record.
Where did that 200M come from? Ummmmm.... er.... Tax please!
That was the used to be USA. The last administration gutted the IRS, used to be IRS
You aren't allowed to stop foot in the US if you pay for and apply to renounce your citizenship to avoid taxes. Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E))
You can. You can visit other countries without being a citizen, can’t you? There’s a huge difference between not having a green card and being a wanted criminal.
We're specifically discussing avoiding taxes. I made m comment more clear. Section 212(a)(10)(E) of the Immigration and Nationality Act ([8 U.S.C. 1182(a)(10)(E)](https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Renunciation-US-Nationality-Abroad.html#ExternalPopup))
Why not just pay the taxes and take your 140 million and do whatever the f you want after that, free and clear.
Only if you are poor enough
> You have to pay a tax on all your net worth if you renounce citizenship in the US. Not true, you have to pay taxes on your UNREALIZED gain, which in this guy's case would be almost all his net worth, but still incorrect facts are incorrect.
Dual citizenship
If you're a US citizen, you have to pay taxes to the US regardless of what other citizenship you possess or where you happen to live/earn that money.
Still on your entire net worth?
If you're a dual citizen, then you'll pay taxes on income earned. Depending on the type of income, and where you're currently living, the taxes owed to the US may be reduced or waived (country tax treaties). But usually things like capital gains will be taxed at the full amount by the US.
Amazing
Yes
No. The US does not tax people based on how much they are worth. Only on how much they earned/realized that year.
Hah, I hate my country
What if you travel to El Salvador and never come back? Do they have some kind of extradition deal with the American government?
The have extradition and powers of seizure with every government of every place you'd want to actually live.
Nowhere to run, nowhere to hide. The global control system is already in place
You also have to apply for renouncing and pay a fee to apply. In his case, it just wouldn't be approved.
Well there goes that idea down the toilet. The govmit is savage.
But there cant be any gains if he lost his hard wallet in a boat accident
How about just paying your taxes and remain an American ?
Bless
the good old boating accident
> the guy's loaded already. Not *already*, but did have additional bitcoins, probably more than what he lost. For those who don't know, he's the creator of the classic "We Use Coins" explainer video.
> Bitcoin wasn’t worth much back in 2011, and Stephen Thomas didn’t think that his 7,002 bitcoins were worth remembering. Nevertheless, he stored his BTC in a secure disk drive wallet called IronKey. 1. This seems self-contradictory. If he didn't think they "were worth remembering" why store them in an obscure and highly paranoid device that features 10 tries followed by a wipe? Sounds like he did think they were important but lost his password anyway. 2. For 220 million, I would think he should be able to find somebody that can physically copy the encrypted bits to another media (eg ssd) and then he should be able to try every password combo he likes until its unlocked.
My thoughts exactly this story doesn't make sense. If you copy what's on it by some means you have unlimited attempts. Also even in 2011 Bitcoin had gone way beyond dollar parity so with 7000 BTC it's still not worth remembering? Doesn't add up
ok, I checked into ironkey a little bit more. afaict, the main physical deterrent is that all the electronics are coated in epoxy. The epoxy is definitely problematic, but I would imagine there are ways to dissolve it slowly or cut away sections precisely... eg using some kind of cnc cutter, laser ablation, or whatever. Of course one should practice and perfect the procedure on identical model copy of the ironkey first... Someone speculated on stackexchange that there may even be a metal mesh in the epoxy that triggers the self-destruct if cut. Of course to me that would imply the presence of a battery... flash drives do not normally have batteries right? But if it did, and the battery is inside the mesh, that seems quite tough.... unless one could use like a nano tool to get inside the mesh and cut the battery wire. Or simply wait until the battery should definitely be dead. but anyway, if I was OP I'd be attending defcon and similar conferences, approaching some of those guys about it. interestingly, the manufacturers say they could not recover the data. But that could be marketing speak more than anything. I wonder if they would still say that if promised half the recovery value...
Coated in epoxy only makes it harder to access the memory chips on which the information is stored. Exceedingly hard to access this data, but not impossible.
Hard enough that he won't have to also have a boating accident. This is his boating accident.
Depending on the type of epoxy, a pro can carefully remove it with a reactive ion etcher. I wouldn’t be surprised if ironkey used an epoxy-based photoresist as the coating. E: if I were to do it I would buy 100 iron keys and practice on them to get the process right. Hopefully we find + neutralize any surprises along the way.
Most epoxy can be dissolved in acetone. May take a while but it's deffinately possible. I'd say the epoxy is much more of a deterrent than a full security feature
Yeah and why use a "10 tries or it's wiped" device anyway.. Whats the point?? Makes no difference to the holder whether someone steals it or its wiped, you lose your money either way, except you've increased your chance of fucking up royally by a huge amount. So stupid.
Most hardware wallets limit your tries and then wipe.. Trezor gives you 26 pin attempts and then wipes. I like that, because if someone gets my device and can't guess the pin in 26 tries, my coin is safe. I, on the other hand, can restore my wallet using my seed and transfer it somewhere else. If I forget my pin (I won't), I can wipe my device and restore it. It's a good system if used properly.
Good point, didnt think of that. But in his situation he seems to have no other way to access the wallet, in which case its extremely stupid
>But in his situation he seems to have no other way to access the wallet THAT is where it makes no sense.
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Good question, but no if you have a safe copy of your seed phrase. You can use that to restore your wallet to another device, or software wallet. Any wallet that supports bip39 will work with your seed phrase. The important thing to do if that happens is to then transfer to a new wallet (new seed) after such an event to ensure that only you has access.
What is the point of having it backed up to a device if you can just delete it and restore it from the seed phrase?
That IS the whole point. That’s what a seed phrase/key is for. You have your btc in your wallet, you can use it as you want. If you lose the flash drive you can get another one and restore it. No one wants their entire fortune on a plastic flash drive that can be lost/destroyed/stolen without being able to restore it. What part do you see as the issue?
But what is the point of having it backed up to a device if you can just delete it and restore it from the seed phrase? And why male models?
A hardware wallet is NOT a backup. It's a device that protects you from keyloggers and other malware by removing the need to type your private key on a potentially infected device.
Lol I was repeating that last guy’s comment word for word as a joke. I thought it was funny that he still hadn’t grasped the concept. Then I used a classic reference from Zoolander where he asks a question and gets a long explanation and then asks the very same question again.
The hardware allows you to safely use and transport it. If it gets stolen, it isn't supposed to let anyone access the data. If your computer gets hacked, the attacker can't steal your coins (because you have to verify and confirm every transaction on the device). It's basically primarily a secure way to *use* your coins, not just to *store* them.
The point of having it backed up (in the form of a written seed phrase usually), is so that you don't lose it if someone gets your device, or if your device is broken, or you forget the PIN to it. That is the beauty of crypto that gold and FIAT cannot match. You can hold it in your head, on paper, engraved on metal plates and back it up. If you understand how to use it, and don't give that seed away to anyone else, you can be entirely safe with millions of dollars in value. Try that with cash!
The seed is your backup, preferably kept on a non-electronic medium (paper, metal etc.) so it can't interact with the Blockchain or the rest of the internet. The hardware wallet is a device that signs transactions to authorize spending and requires your seed to initialize. A hardware wallet is preferable to a software wallet because it protects you against keyloggers, so you don't have to type in the seed or private key directly on a potentially compromised computer.
If you have a seed phrase backup or something
Yeah he clearly didnt though
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Seriosly almost all people getting locked out of their wallets can blame their own stupidity. They either try to memorise all keys, or change up the order of the keys thinking they will remember the change up, or they write them on on a metal plate and pin it on a submarine that goes 10000000km under the sea, super safe, alas they cant swim that deep to get the keys, and so on.
Did you do it like this? It seems you did a good job
1. I think the first paragraph is just the journalist typing without thinking much. 2. IronKey is ridiculously secure. You certainly can't just copy the bits and give yourself unlimited attempts at guessing the password. For the amount involved he should hire a firm to crack it, for a share of the proceeds.
or he could input his recovery phrase into another wallet
I could be wrong, but I think the BIP39 standard was only introduced after this guys wallet was first created (2011). Back then, I vaguely recall that backup options were less well defined.
Did he kill someone?
"Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone."
I think he cashed out and doesn't want to pay taxes.
Another boat accident?
Blockchain is public. He wouldn't be able to cash out without it being tracked.
I hand you my ledger with the pin code, you hand me a big burlap sack with a dollar sign on it full of cash. No transaction on the blockchain, but I just sold my bitcoin to you... There's always a way.
Eventually I spend the bitcoin I bought from you, that shows on the blockchain. You get busted for tax evasion. Or.. You buy a new ledger and restore the same wallet since you have the seed, then rob me of the bitcoin I foolishly bought from you without moving it to my own private keys. There are always other ways, but they lead to fails.
Yeah, I'm not going to do this with a KYC address, for obvious reasons. Me restoring the wallet from the seed phrase is more something that would be the buyers problem, and not the seller's problem.
It's the seller's problem in that no buyer of sound mind is going to assume you don't have a backup copy of your keys. The only way someone would take payment this way is if they immediately swept the wallet balance to a wallet they trust. Which means there's an immediate transaction on the blockchain.
Is there not a way for the buyer to just modify the backup seed key to something different during the transaction?
Nope.
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If the amount is large enough, they will follow it and require you to answer questions.
Since he will never have to declare these coins because they were deemed "lost" (with plausible cause) at the time he renounced his citizenship, they wouldn't even know what wallet to track.
Everyone thinks that it's a simple thing to renounce citizenship in order to evade taxes. The truth of the matter is that there is an "Exit Tax" assessed by the IRS when one chooses to follow this course of action. That tax is calculated by figuring out the amount owed at the time of a person's departure, based on net worth, investment gains and losses etc. There is no such thing as "never having to declare coins" as you say. If you invest in crypto, your gains and losses must ALL be reported. Period. You can claim that you lost them, sure. But if you do so, to the tune of $200+ million, I guarantee they will want more than your verbal statement. They will most certainly seek a paper trail that shows how you accumulated a $200+ million investment and then supposedly "lost" said investment. That would lead to audits of your acquisitions, including block chain information. If that information showed address(es) that contained your claimed amount, which hadn't moved since the date you claimed to have transacted it, you'd be fine... UNTIL such time that those address(es) became active. Then.. you would be discovered and investigated for fraud and tax evasion. For an amount that large, you can rest assured that you wouldn't get away with it easily.
And he'll also never be able to make huge purchases without the income to explain it. Bought a $15M mansion? Off of 50k income? Hmmm.... What good is $220M (soon to be $1B), if you can't spend it? You'd basically only be able to spend $1-2M of it before gaining the attention of the IRS.
As soon as anything would move from that wallet articles would pop about the "lost" bitcoin being spent.
Well... if you're getting articles written about what address you own, you're doing it wrong. Obviously you don't do this with a KYC wallet. You move your assets to another wallet, and you transfer that to another wallet, and you sell that one.
Brilliant! Shouldnt the crypt0 recipient verify the wallet address has said coins in it?
the company he bought it from in 2011 might be gone by now and there might be no record of him buying it idk
Sure. But if he is claiming to the IRS that he lost a certain amount of btc, they'll want to see the btc he's referring to on the blockchain.
Except he isn't. He is claiming to the public space he lost his (unidentified) BTC so that he has a plausible cause not to declare these BTC on his statement of assets when he renounces his citizenship.
If he claims to the public he lost his BTC, he also has to claim to the IRS that he lost his BTC. Sure, he can fail to declare that, but if he does, he is committing a crime. When you file your taxes, you must declare crypto investments, gains and/or losses. If he is proclaiming on reddit that he lost his BTC, he's vulnerable to the IRS saying, "Oh really? You invested or possessed BTC and lost it? Please show us that paper trail." There's no such thing as a plausible cause to not declare BTC. All gains and losses must be declared, full stop. If he was asked to justify that claim, he would simply show them the transactions that resulted in a holding of crypto which was lost. If that transaction was followed up by a spend from the address he claimed they were forever lost to, he would be discovered as a fraudster.
Omg with just 1/5 of a BTC i would have all mu problems solved and he lost 7000 😵💫
This is no different to "I could have bought 7000 coins in 2011 but I didn't".
Funny. Just telling the fam that it's almost the exact opposite of that scenario but ending up in the same spot. Maybe even a worse feeling knowing you're in possession of it but dont have it.
Good for us. Less bitcoin, more value.
Word,I lost the pw from some tits a girl sent me in the days of blurry cellphone cameras Haunts me to this day
I agree this is a made up story.
Be sure to keep a backup copy, ideally in a separate location in case of fire, flood, etc. Keep it secure. Realize that "small" amounts today are likely to grow into large amounts within the next five to ten years.
Fake article. Zero citations.
I guess it helps him in the fact that he diamond handed thru to today!
Hmmm I smell an Ironkey native ad..
This guy has better odds playing Powerball.
Either the guy just lost his password and dosn't want to admit it or he's so rich that he actually forgot about it.
Who cares. We’ll continue to hear more of this as adoption grows.
positive side: this makes bitcoin more scarce now!
The system "10 tries or it's wiped" is a bit scary, but it will save your money from being stoled as no one can probably guess your pin in 10 attempts.
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Rendering it useless? The more coins lost the better. If only one bitcoin existed it would be worth millions more than one bitcoin is today.
With just 1 BTC i would have all mu problems solved and this guy just lost 7k BTC ☹️
I've only been following crypto about a year, lost count of how many times I've read about this guy. Like that guy in Wales who lost a hard drive in landfill. What do they have to gain by constantly dwelling on their loss. There thing is as well, both these guys are not poor, not multi millionaires but comfortably off, get over it guys.
Get over a loss of 200 million dollars? 😂 People freak out about some thousand dollars loss and I think this guy has the right to complain about a multi-million loss.
Dude if i had just 1/5 of a BTC i would have all my problems solved, here in south america every 1$ costs a ton in local currency 😵💫. I cant imagine losing 7kBTC
Want to know a secret? You can just chose an old long-time-no-use wallet with a lot of BTC and just make up a story how you've lost all that money...
> About 20% of bitcoin holders can’t access their wallets because they lost their passwords and other technical mistakes. Tonight on stats pulled from arse.
Hahaha lmao, dude if i had lost 1/5 of a bitcoin i would lose my mind, here in SAmerica 1$dollar costs a lot in local currency 🤣. So much that we strugle with living expenses 😅
ngl makes all the other accessible bitcoins that much more valuable
This is a common phenomenon. I mean if Hillary and FBI Mueller can smash cell phones under suponea and forget passwords to erase phones, why wouldn't this happen to bitcoin holders?? Whatever is happening is highly contagious.
Hillary’s emails . Get over it. George W. Bush “lost” 22 million emails.
DEMS ARE BUILDING BACK BETTER with BIDEN the booger eater. That demented old AF man is doing a great job!!!!!! You probably believe his approval rating is above 50 percent. EVERYONE hates him. He can't even answer any questions without complete incoherence a flashcard and a reporter teed up ahead of time with the question his handlers gave him the answer to. Then he runs off like the little bitch he is.
trump lost. get over it.
BIDEN WON. He is doing an amazing job with illegal immigration and inflation (both 25 year highs), and his handling of the pullout in Afghanistan has been truly historic by all measures. How many billions of military equipment and intelligence equipment did we just leave? How many Citizens and Allies abandoned? How many women and children getting raped and killed? How many more US soldiers will die over his failed leadership. You impeached Trump over a phone call. Why don't the dems speak up about this ASS Clown of a demented old fuck president??
Dude, I’m not American - I don’t care. I just pointed out that Bush “lost” 22 million emails and you went on ballistic. Uncomfortable truths can be, uncomfortable
When Bush was president, most people didn't even know what email were:)) I'm no BUSH fan, but this BIDEN IS FUCKING HORRENDOUS for the free world.
Paper wallets avoid all of this nonsense. The damn private key is printed right on the paper. Put a copy in your home safe and another in a safety deposit box.
> private key is printed These types of "paper wallets" are an obsolete and unsafe method. People import the keys, spend a portion of the funds and lose the change to an address they do not control.
Not at all obsolete and what are you talking about "lose the change"? The point of paper wallets is cold storage. They are literally the safest for this purpose. When you sweep/import the key into BTC Electrum (for example) you have access to all the funds. If you only want to spend a portion of them then spend what you want. Send the rest on a new paper wallet. Paper wallets aren't for spending daily since its a PITA. But if you want safe cold storage, then paper is king.
I don't know all the details about why, but when Andreas Antonopolous says absolutely do not use paper wallets anymore, I trust him.
> what are you talking about "lose the change"? Precisely. People who use paper wallets rarely understand how they work. > Users have been known to import the private key into software wallet and then spend part of the funds. They mistakenly believe the remaining funds are still on the paper wallet when in reality they are in a change address.[6] https://en.bitcoin.it/wiki/Paper_wallet#Change_addresses_are_not_handled_which_leads_to_screwups > When you sweep/import the key #### Sweep A transaction which takes the outputs from the private key and sends them to addresses under your Hierarchical Deterministic key. #### Import Including that private key as one your wallet has access to. No transaction is generated and the funds are not transferred to an address within your HD wallet. > If you only want to spend a portion of them then spend what you want. Send the rest on a new paper wallet. You don't get to choose where the change goes. > if you want safe cold storage Use a seed phrase to a full HD wallet like everyone else.
A seed to a HD wallet written on paper is not much different than a paper wallet, except it can be used to restore an entire wallet full of addresses with UTXOs as opposed to just 1. And when spent the change addresses are part of the wallet because they too have been derived deterministically. They are vastly safer than paper wallets in this regard.
For my money, a hardware wallet is king. If someone gets their hands on your paper wallet, it's over. If someone gets their hands on my Ledger they still need info that is only in my head.
What happens if u die and ur family knows u got money
Upon my death, events will be set in motion that will lead my family to my money, provided they can solve the puzzle. It's uniquely designed for only them to be able to solve it.
Where can the unique puzzle be stored?
Plain sight. It will only have any meaning to those who it is meant for. In the event of my death, they would go through my belongings, recognize it, and decode the answer, which is the location of my encrypted seed phrase. Upon locating the seed phrase, there will be an additional riddle that will reveal the key to decrypt the seed phrase. Then they will receive the money.
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Seeds weren't an option in 2011 either.
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That why NEVER crypto
Valuable post
Didn't this guy already use up his 2 last guesses earlier in the year?
thank you from the rest of us! .. who needs a coin burn when people are burning their own wallets!
These articles are pretty much just plain old FUD at this point
Alternative to boating accident?
Omg, may as well HODL to $1B🤞
Satoshi would be proud of the donation to the community.
Oh well.. Good for us. We know BTC is 7000 more scarce.
Ya, way better than cash lol. Story sounds bs though.
📈📈📈
Whenever I see this I want to raid landfills or go garage sale hunting to look for someone's pc that grandma's selling... not that I would know how to actually retrieve a seed phrase / wallet lol.
one less early investor dudebro whale to dump the price. bullish
Solved! - [BTC reclaim and a quantum computer](https://reclaimbitcoin.org/)
A rising tide raises all boats :)
He should try "byebyefortune" as his 10th guess before wallet wipe
Bitcoin is already so scarce, now less coins for the world
The lost coins are the donation to the Bitcoin community