>>> KrebsOnSecurity last month interviewed a victim who recently saw more than three million dollars worth of cryptocurrency siphoned from his account. That user signed up with LastPass nearly a decade ago, stored their cryptocurrency seed phrase there, and yet never changed his master password — which was just eight characters. Nor was he ever forced to improve his master password.
This does fascinate me. How many people who have won the crypto-lottery like that still keep invested? Is most of the crypto gain unrealised so far? Or most of it been drained out?
The more early someone was in mining or buying Bitcoin, the greater the possibility that they believe in Bitcoin in and of itself.
I.e. to someone who was early into Bitcoin, they might wish to never sell off all of their BTC.
And besides, even if you wanted to sell off your Bitcoins, there are a number of things to consider:
- Taxes. Why sell millions of USD worth of Bitcoin now, and pay taxes on all of it today? Possibly better in some situations to sell enough to live comfortably for a few years, and then sell more later when you need to again.
- What are you gonna do with the money instead? Put it in stocks? Buy a bunch of houses?
This is a classic issue with money. What do you do if you're Taylor Swift? You're a 750 millionaire, with the next couple 100 on the way from this tour.
Whelp, spent the first 50 on a house all humans will drool over. Got the compulsory car. Got the compulsory jet. Got the compulsory yacht (not quite as large as Bezos' (ehmm, banana?) that could not leave its construction port). [1]
And with the other 600 million? Private air force? [2] Air craft carrier for your private air force? Or you end up like every wealthy human, dumping your money into real estate so that you can buy 1000 houses for every normal human, and completely "disrupt" the housing market.
Use it to give people jobs. Open up restaurants and build schools and hospitals. Help friends start their own businesses, stimulate the economy. Tony Hseih, RIP, didn't have a private air force, but he made downtown Vegas. Someone's already started an electric car company, and built a rocket company to go to Mars, so that's been done, but there's just so much out there. Rhianna's got her clothing line for people who aren't models. Cars and mansions are boring.
There's a risk of "dragon sickness" (from The Hobbit) and conflating one's self-worth with their financial value; I feel for these folks, and support regulation that would make it increasingly difficult to amass money beyond a certain point (basic needs being well met and all that), along with psychological help (not in a pejorative way- I am a beneficiary of therapy and medication and I don't feel lesser for it).
Generally agree. Had the same thought. However, related to this comment and @fragmede's response, is that wealth is strong correlated in human society with power, influence, celebrity ... and more wealth.
People quite literally just hand money to people who already have money. I have sat in a room, and watched someone nearby check their phone and say "There's a minor wealthy celebrity nearby! We all need to go and buy tickets to the stadium! We might see or meet them!"
I went to Dragon Con a few years ago, and people were willing to stand in line all Dragon Con, their entire weekend experience, to see a wealthy famous person. I'd go play games, go out, and see the people move in the line slightly. All weekend. Stretched all the way around the entire block and down the street. Wasn't even "that" famous (supporting movie character).
> The more early someone was in mining or buying Bitcoin, the greater the possibility that they believe in Bitcoin in and of itself.
Citation needed. I got into bitcoin back when mining on your CPU was actually a reasonable thing to do. I tried selling it when it was worth about $50, only for mtgox to promptly fold.
Suffice to say I firmly believe bitcoin isn't really a solution to anything.
Of course anecdote does not data make, but neither does an unsourced claim.
I wonder how many people heard of Bitcoin very early in its creation, mined a few "just for fun", and then forgot about them or even deleted them when they thought it wouldn't amount to anything.
2009-ish I remember finding an online wallet that would just give you half a bitcoin for making an account. Intended to look into bitcoin some more but just forgot about it until years later when it had gone up like 1000x or more and was just like "aaaghhhh dammit"...
I’m fascinated by crypto lottery winners, too. The only person I know personally who did very well and exited on top did so for environmental guilt reasons: He became too opposed to the environmental effects of BitCoin’s energy consumption to feel okay about hanging on to it. Cashing out at the top was just a coincidence.
The other crypto lottery winners I know (those who have admitted it, anyway) gave up a lot of their winnings either by doubling down in BitCoin at the highs or by gambling on altcoins in the hopes of a repeat. They started as believers and their early winnings only galvanized their confidence. After that, they were dumping their cash into crypto at every opportunity because they thought it was going to make them supremely wealthy.
I "won" the crypto lottery and got a 100x return... which means that I sold many years before the peak and made $2000. There's people who timed things much better than I did, but if you'd held on past a 10,000x you're probably going to keep holding.
Or not realize they have a terrible password. The thing I notice is not all services allow spaces. A sentence of regular dictionary words has proven a good password for a long while otherwise.
I still hold ~1M US worth of crypto all together, which is roughly the majority of my net worth. Been in since early days. If I'd guess I've probably "realized" (sold/used for payment for non-crypto goods or services) ~20~30k$ or so over the years? I still donate here and there and use it for payment for goods and services when I can.
I probably lost at least another ~1M$ worth (not projected: at the time. it sucks but you move on) through completely preventable ways when acting agains my own better knowledge. Check. Your. Backups. 3-2-1.
I made great "second-order-gains" from my dabbling in crypto I guess you can say, since I made a decent career in the crypto industry. Most people I know in the industry personally who have been around for as long are still invested to various degrees and defi people gonna defi.
I'd probably balance my portfolio more towards real-estate, commodities and maybe stocks if I'd be smart about it but I have enough of anxiety around taxes that I'm postponing doing anything that means having to file paperwork or that may be illegal. No accounts on exchanges. If it really comes down to it I guess I'd had to consider changing countries if my country of residence becomes hostile enough that using my crypto becomess untenable. I'm still very much a "true believer".
1. You said fear of taxes - have you spoken to an accountant? I understand it's capital gains.
2. What's your view on why the price went up and stays up-ish? Speculation? Funnel for money laundering?
3. What's "believing"? If central banks all published their own coins does that solve the problem of native digital cash? or is this money without fiat type of thing (I am sorry for strange questions - I am sure there are places to dig this up online but it's only what I can glean from around)
Add: Realized I def sold more than $30k when I consider I basically lived off cash I got through localbitcoins and similar for a few years. Meeting up random people at coffee shops etc.
Isn’t the market cap of, say, Bitcoin high enough that selling a few mil USD worth shouldn’t really impact it? But maybe the trading volume is too low.
It’s hard to say how much of that are “real” trades, bots can have minimal liquidity but a huge trading volume.
Satoshi is in theory holding onto ~25 billion in coins. Trying to cash that out would however absolutely tank the current valuations.
But that’s hardly the only major risk. Bulgaria has something like 213,000 bitcoin worth nominally 5 billion or so and no particular interest in bitcoin, but trying to cash that out is again problematic.
I'm just saying $3 million doesn't do much to the price. If someone suddenly cashes out several thousand times that much, then sure, price will crash.
I've personally watched sell pressure on Coinbase in the multi-million range get executed over the course of a few minutes, with only a modest temporary effect on the price.
Yes, if the benchmark is 3 million then most of the time it’s inconsequential but there’s much larger wallets susceptible to being pillaged and I would expect a significantly larger impact from even just 30 million. Further liquidity isn’t a steady state. So, if you happen to execute a significant trade at the wrong time you can trigger a surprisingly large cascade effect.
Which is why very large transactions frequently occur either outside of open markets or across a surprisingly long period.
This does fascinate me. How many people who have won the crypto-lottery like that still keep invested? Is most of the crypto gain unrealised so far? Or most of it been drained out?