The developer, 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 buy cryptocurrencies through PayPal.
The first 1,000 BTC transactions were sold for only $5. At that time, one could mine nearly 1,200 BTC per day using a simple laptop. However, in 2011, with the popularity of the internet, mining difficulty underwent a significant change, leading to a substantial increase in mining difficulty.
“Suddenly, everyone started mining, including close ones, even our dog,” Alinwein pointed out.
To support the Bitcoin economy, he began trading physical goods, such as acting 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 true prosperity in cryptocurrency prices. At the time, it was estimated that Alinwein’s holdings were worth around $500,000. However, on March 25, 2011, he discovered that 25,000 BTC had been removed from his wallet without his knowledge.
“I was heartbroken. I woke up to find that most of my Bitcoin balance was gone. If only my wallet was encrypted on my hard drive. It was my mistake not to transfer this money to a separate non-Windows computer,” he said.
The stolen cryptocurrency was valued at approximately $160 million. Alinwein admitted to security vulnerabilities and suspected that a Trojan disguised as mining tools infected his unencrypted wallet files.
The news of the stolen funds quickly spread worldwide. This story made it to Forbes as the first known Bitcoin robbery case. People also began to question if the theft was not orchestrated by Alinwein himself. However, he bravely admitted his mistakes and attributed it to poor security measures.
Alinwein’s story is an important one for BTC users, as it serves as a reminder to protect their tokens through offline key protection and stringent security measures.