The developer, named Alinwein, was one of the early adopters when the price of Bitcoin was below $0.05. In 2010, he created “Bitcoin Express” and became one of the leading BTC exchanges, allowing customers to purchase cryptocurrencies through PayPal. The first 1,000 BTC transactions were sold for only $5. At that time, it was possible to mine nearly 1,200 BTC per day using a simple laptop. However, in 2011, with the widespread popularity of the internet, mining difficulty underwent a huge change, leading to a significant increase in mining difficulty.
“Suddenly, everyone started mining, including close friends, even our dog,” Alinwein pointed out.
To support the Bitcoin economy, he began trading physical goods, serving as a sales agent for Canadian customers looking to purchase coffee cards. His substantial investments in the BTC ecosystem earned him the title of “Bitcoin Whale.” He accumulated over 25,000 BTC.
In early 2011, Bitcoin surged to $30, marking the first real boom in cryptocurrency prices. It was estimated at the time that Alinwein’s holdings were worth around $500 million. However, on March 25, 2011, he discovered that 25,000 BTC had been removed from his wallet without his knowledge.
“I was devastated. I woke up to find that most of my Bitcoin balance was gone. If only my wallet had been encrypted on my hard drive. It was my fault for not transferring this money to a separate, non-Windows computer,” he said.
The stolen cryptocurrency was valued at approximately $160 million. Allinway admitted to security vulnerabilities and suspected that a Trojan disguised as a mining tool infected his unencrypted wallet file.
The news of the stolen funds quickly spread worldwide. This story made it to Forbes as the first known Bitcoin robbery. People began to question whether the theft was not orchestrated by Alinwein himself. However, he bravely admitted his mistake, citing poor security measures as the cause.
Alinwein’s story is an important lesson for BTC users, teaching them how to safeguard their tokens through offline protection of private keys and strict security measures.