Without a doubt, one of the greatest obstacles surrounding Bitcoin is how to store it safely. The ease with which you can lose your BTC was highlighted on Sunday by economist, gold supporter, and overall Bitcoin hater Peter Schiff.
As Coin Rivet reported yesterday, in a tweet over the weekend, the Euro Pacific Capital CEO said that he had lost all the Bitcoin he had ever owned.
“So now not only is my Bitcoin intrinsically worthless; it has no market value either.”
I just lost all the #Bitcoin I have ever owned. My wallet got corrupted somehow and my password is no longer valid. So now not only is my Bitcoin intrinsically worthless; it has no market value either. I knew owning Bitcoin was a bad idea, I just never realized it was this bad! pic.twitter.com/6SJvDJOZU6
— Peter Schiff (@PeterSchiff) January 19, 2020
Being so vocal in his contempt of Bitcoin, the tweet from Mr Schiff sparked off a storm of backlash and comments.
Key industry players from Peter McCormack to Morgan Creek Digital partner Anthony Pompliano joined in the thread stating that if he couldn’t handle a password, then he couldn’t handle Bitcoin. There was little sympathy among the replies.
ShapeShift co-founder and key Bitcoin advocate Erik Voorhees even went so far as to give his version of events. He said what really happened was that Schiff forgot his password – and never created a backup phrase.
Peter Schiff maintains that he did not lose his password
Schiff was using a mobile wallet on a phone that he had had for some time. However, he insists that he did not forget his password, and rather it was the wallet becoming “corrupted” that resulted in his BTC being lost.
He replied directly to Voorhees, saying that he had never been told he needed a seed phrase and never had one. He stated: “I can’t lose what I never had!”
Eric that is not what happened. You created the wallet, and the only thing you asked me to do was to select a password to unlock it. I did. That same password worked every time I used it until Saturday. You never told me about the seed phrase. I can't lose what I never had!
— Peter Schiff (@PeterSchiff) January 20, 2020
The issue of storing crypto safely
Despite the insults and the typical digital mudslinging, there were several voices of encouragement – and also debate.
Exchange and wallet provider Blockchain.com, for example, got in touch to say that they were sorry he was experiencing issues, but to rest assured that his funds were safe and they could help him recover them.
Please rest assured, your funds are secure 🔒
We will PM you shortly.
There were also those (including Ethereum’s Vitalik Buterin) who commented that instead of attacking Schiff (as he attacks Bitcoin), the community should work on solutions that make crypto viable for everyone.
Disappointed at people replying to this with "crypto is what it is, it's your job to be super-careful and write down backup seeds in three places". We can and should create better wallet tech to make security easier.
— vitalik.eth (@VitalikButerin) January 20, 2020
The whole Peter Schiff debacle brings up the wider debate of storing cryptocurrency safely. After all, Schiff is a well-known character in this space. If he had this experience, it’s likely happened to others (and probably more frequently than we know).
Until we can deliver viable solutions for everyday people to store their crypto, it’s hard to see it becoming mainstream.
While there are products like Bobby Lee’s Ballet wallet that requires no backup, this type of wallet isn’t ideal either. It may cut out one cumbersome step when it comes to crypto storage. But just like a bar of gold, lose your Ballet wallet and you also lose your Bitcoin.
Whether Schiff has or hasn’t forgotten his password or failed to create a backup seed are essentially immaterial. The incident highlights just how hard storing crypto is – and the fact that it remains a major hurdle for many.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.