On Sunday (January 19), famous gold bug Peter Schiff tweeted that he had lost access to all of his Bitcoin holdings due to a malfunctioning wallet, a claim for which he was ridiculed by almost everyone in the crypto community. One notable exception, though, is Vitalik Buterin, the creator of Ethereum.
On 4 July 2019, Schiff, who is the CEO of Euro Pacific Capital, a full-service, registered broker/dealer specializing in foreign markets and securities, and founder and Chairman of SchiffGold, a full-service, discount precious metals dealer, and a man who is extremely bullish on gold, bearish on the U.S. dollar, and highly skeptical about Bitcoin, admitted to owning Bitcoin (BTC), Ether (ETH), and Bitcoin Cash (BCH), and said that he was going to HODL his bitcoin no matter what happens to the Bitcoin price.
Then, yesterday (January 19), Schiff took to Twitter to express his anger with Bitcoin after allegedly losing access to the crypto wallet that holds his bitcoin:
I just lost all the #Bitcoin I have ever owned. My wallet got corrupted somehow and my password is no longer valid. So now not only is my Bitcoin intrinsically worthless; it has no market value either. I knew owning Bitcoin was a bad idea, I just never realized it was this bad! pic.twitter.com/6SJvDJOZU6— Peter Schiff (@PeterSchiff) January 19, 2020
Although Schiff thinks that the wallet app he was using has "somehow" gotten "corrupted" and that is why his password -- which he is sure of remembering correctly -- is being rejected, most people in the crypto community seem to believe that this is just a case of a "boomer" who has simply forgotten his wallet's password. Here are a couple of examples:
Translation: You forgot your password?— Pomp 🌪 (@APompliano) January 19, 2020
Same thing happens to your email if you’re irresponsible and forget your password, Peter 🤷🏽♂️
Oh man, this is wrong on so many levels...— CZ Binance (@cz_binance) January 19, 2020
I am not sure even a centralized exchange can help him secure his coins.
I can’t believe I am about to say this, but maybe “stay in fiat”? https://t.co/LZqDhlI25n
Eric Voorhees, Founder and CEO of ShapeShift, whom Schiff claims was the person who set up Schiff's wallet in the first place, says that it is Schiff who is to blame (and not Bitcoin) for forgetting his password and not making a note of his wallet's recovery phrase:
Here's what happened: after debate in 2018, we went to dinner. Peter had never used bitcoin before (!) I helped him set up wallet on his phone (Edge or BRD?), told him to secure it if he ever held significant value on it, gave him $50. He forgot pw, and never recorded phrase. 😑 https://t.co/kcQkAyU9Rv— Erik Voorhees (@ErikVoorhees) January 19, 2020
He emailed me a day ago about it. I wasn't going to embarrass him on the interwebs but then he posts this 🤨 If I gave him an ounce of gold and he dropped it on the sidewalk would he similarly condemn the precious metal as a foolish monetary system?— Erik Voorhees (@ErikVoorhees) January 20, 2020
Meanwhile, Schiff insists that he did not forget his password, and he surprisingly appears shocked by the crypto community's reaction to his original tweet:
So much fake news about how I forgot my wallet password. Can't #Bitcoin pumpers be honest about anything? I was very clear that I didn't forget my password. My wallet no longer recognizes my correct password. Plus what's up with over 3K people liking that I lost my Bitcoin?— Peter Schiff (@PeterSchiff) January 20, 2020
It is not clear at this point what wallet app Schiff was using, if he indeed is just misremembering his password, or even if this whole circus (which should perhaps be called "WalletGate") is just a masterful marketing ploy by Schiff in order to persaude people to drop Bitcoin in favor of gold.
There is naturally very little sympathy for Schiff, a man who has constantly been attacking Bitcoin over the past few years.
However, Vitalik Buterin, the Russian-Canadian programmer who created Ethereum, has come to Schiff's defense, saying that instead of criticizing Schiff for being careless with password security, we should be focusing on the fact that wallet technology needs to be improved to make this task easier for regular people:
Disappointed at people replying to this with "crypto is what it is, it's your job to be super-careful and write down backup seeds in three places". We can and should create better wallet tech to make security easier.— vitalik.eth (@VitalikButerin) January 20, 2020
Eg. here's a social recovery ERC WIP: https://t.co/tuSbHhXKgd https://t.co/hCBAJKbK41
Buterin also belives that we should be more "forgiving of people who are really upset because they just lost a huge pile of money" (even though Schiff himself is not too sad about the loss because all of the bitcoin he owned was gifted to him):
I think we can afford to be forgiving of people who are really upset because they just lost a huge pile of money.— vitalik.eth (@VitalikButerin) January 20, 2020
And finally, one other member of the crypto community who believes that this case highlights the need for better and easier-to-use crypto wallets is CZ:
Many hardcore crypto ogs advocate storing your own keys. But the truth is, today most people are not able to secure a key even from themselves (losing it). A trusted centralized exchange is #SAFUer for most people. The numbers speak for themselves.— CZ Binance (@cz_binance) January 19, 2020
Need to work on wallets. https://t.co/bsX3Ea5WCD