Peter Schiff blames blockchain after losing access to Bitcoin wallet

Peter Schiff, founder of the SchiffGold precious metals brokerage, has caused controversy among crypto enthusiasts after claiming that Bitcoin as a monetary system is broken.

Schiff tweeted on Sunday that he has lost all his Bitcoin as his crypto wallet is “corrupted”. Schiff claims his BTC is now intrinsically worthless and has no market value.

However, the real blow to the Bitcoin community came when Schiff commented:

“I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”

Erik Voorhees, long-time Bitcoin supporter and CEO of crypto exchange ShapeShift, gifted the Bitcoin to Schiff in 2018, worth $50 at the time.

However, Voorhees claims that Schiff has simply forgotten the password to his wallet and didn’t back up the mnemonic phrase.

In a scathing follow-up tweet which was undoubtedly directed at Schiff, Voorhees said: “Financial sovereignty: It’s not for everyone.”

Voorhees argues that the situation is the same as blaming precious metals as a foolish monetary system if he lost his gold.

Technically, as Schiff’s funds are stored on the blockchain, there would be no issue accessing his holdings if he had retained the mnemonic phrase. As such, the Bitcoin community believe his claims are ill-founded.

Antony Pompliano, founder of Morgan Creek Digital, argues that the wallet couldn’t have “forgotten” Schiff’s password and offered to help him recover the lost BTC.

Binance’s Changpeng Zhao (CZ) was also quick to criticise Schiff, saying that perhaps the gold expert should “stay in fiat”.

Schiff responds to criticism

Schiff was quick to respond to criticism, calling his detractors “Bitcoin pumpers” and questioning their integrity.

Calling the controversy “fake news”, Schiff claims he didn’t forget his password, and instead the wallet malfunctioned and won’t recognise his credentials.

Schiff tweeted:

Surprisingly, Schiff was supported by Ethereum creator Vitalik Buterin, who commented:

“I think we can afford to be forgiving of people who are really upset because they just lost a huge pile of money.”

Buterin also claimed that the cryptocurrency community had a responsibility to create better wallet technology to make securing funds easier for novice users.

Schiff later downplayed the loss, tweeting: “Easy come, easy go.”

You can read more about keeping your Bitcoin funds safe here.