The exchange that accidentally deleted its 17,000-Bitcoin wallet file
Main Idea
The article recounts the 2011 incident where Bitomat, a Polish Bitcoin exchange, accidentally deleted its wallet file containing 17,000 BTC due to a server mishap, highlighting the risks of centralized custody and the importance of self-custody in cryptocurrency.
Key Points
1. In August 2011, Bitomat, a Polish Bitcoin exchange, lost 17,000 BTC after its wallet file was accidentally deleted during a server RAM upgrade on an Amazon EC2 virtual machine.
2. Bitomat's administrator, Bartek Szabat, sought help from the Bitcoin community and Amazon Web Services to recover the lost data but was unsuccessful.
3. Szabat attempted to compensate users by offering the euro equivalent of the lost BTC and later partnered with Mt. Gox to migrate users to a Polish-language version of the exchange.
4. The incident underscores the vulnerabilities of centralized exchanges and the importance of self-custody, as highlighted by Hacker News users at the time.
5. Mt. Gox, which assisted Bitomat users, itself faced major hacks in subsequent years, further emphasizing the risks of trusting exchanges with custody of cryptocurrencies.
Description
A spooky story about the importance of self-custody
Latest News
- Jito’s BAM upgrade set to make Solana apps richer2025-08-01 21:13:00
- Friday charts: The observer effect2025-08-01 21:09:21
- Coinbase eyes ‘Everything Exchange’ despite Q2 revenue decline2025-08-01 19:43:57
- Imagine if Figma’s IPO had Hyperliquid’s pre-launch perps2025-08-01 17:05:04
- The exchange that accidentally deleted its 17,000-Bitcoin wallet file2025-08-01 16:23:27