Sun. Aug 7th, 2022

It’s no secret that gold bug Peter Schiff has come out swinging against bitcoin, a rival store-of-value asset to the precious metal. He has railed against bitcoin, insisting that the “digital gold” was doomed to fail even though its returns have trounced that of his favorite precious metal over the past decade. Last summer, to much of the crypto community’s surprise, Schiff revealed that he actually had a bitcoin wallet and after some urging shared the address with the crypto community. Crypto investors then took it upon themselves to send Schiff thousands of dollars’ worth of bitcoin donations in an effort to convert him into a bitcoin believer.

Now Schiff appears to be crying wolf, saying that all of his bitcoin was lost as a result of a faulty wallet. The cryptocurrency community isn’t buying it, quickly pointing out that if bitcoin-hater Schiff can’t access his coins, it’s a result of human error, not technology.

Source: Twitter

Schiff’s tweet generated thousands of critical responses, the majority of which took aim at Schiff for blaming the wallet instead of taking responsibility for the mishap. Morgan Creek Digital Partner Anthony Pompliano said,

“Translation: You forgot your password? Same thing happens to your email if you’re irresponsible and forget your password, Pete.”

Others still accused Schiff of trying to dupe the crypto community into sending him more free bitcoin. The consensus appears to be that Schiff “didn’t back up his passphrase or private key,” which is a surefire way for the funds to get locked away.

The crypto community coined the phrase, “not your keys, not your coins.” Holding  your crypto in a hard wallet is considered the safest way to store your funds considering that third-party custodians such as crypto exchanges have proven to be vulnerable to hacks. Even if a hardware wallet becomes lost or damaged,  as long as you’ve saved your recovery seed words, you can recover your crypto funds from wallets such as Trezor and Ballet.

Crypto analyst Willy Woo appeared to give Schiff the benefit of the doubt.

Source: Twitter

So did Ethereum Co-Founder Vitalik Buterin.

Source: Twitter

Perhaps nobody knows better what happened to Schiff’s funds than ShapeShift CEO Erik Voorhees. He explained that after a 2018 bitcoin debate in which they both participated, Voorhees took the time to set up a wallet on Schiff’s phone, recalling that it was either Edge or BRD. Voorhees advised Schiff to “secure it if he ever held significant value on it,” saying he “gave him USD 50.” Voorhees concludes that Schiff “forgot pw, and never recorded phrase.”

Source: Twitter

It’s no love lost for Schiff, who in recent months called for the cratering of the BTC price to USD 1,000. Talk about looking a gift horse in the mouth.

Source: Twitter

Unfortunately, Schiff is not the only one who lost access to their crypto funds. According to crypto research firm Chainalysis, somewhere between 2.78 million and 3.79 million bitcoins have been lost forever, representing between 17% and 23% of the total bitcoins in circulation – each of which are worth approximately USD 8,700 at the current price. As a result, by the time the total 21 million bitcoin supply is mined by 2040, the actual number of coins in circulation will be much lower. The research firm suggests that as much as 30% to 50% of total bitcoins – worth some USD 20 billion – could ultimately be lost as a result of lost private keys. The culprit about one-fifth of the time? “Mismanaged wallets.”