Losing your wallet isn’t what it used to be. In the digital age, it means than just having to replace your driver’s license, credit cards and some cash. Just ask Daniel Rodriguez, CEO of Animusoft and CTO of Billshark, who lost a digital wallet containing Bitcoin worth millions of dollars.
Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto, an unknown person. It’s a completely decentralized digital cash system monitored by peer-to-peer internet protocol. Transacting with Bitcoin does not involve banks and there are no fees. Although transactions are not completely anonymous, there is a level of privacy that can be maintained by the user. Major retailers like overstock.com, Expedia, Dish Network and Newegg have been accepting Bitcoin for the last few years and more merchants are starting to follow suit. Bitcoin is just one of several cryptocurrencies on the market, but thus far, it’s considered the digital gold standard.
So how does Rodriguez, a savvy tech entrepreneur and computer scientist, lose Bitcoin worth millions? Pretty easily, it seems. There are numerous ways one can “lose” a digital wallet. A person can get hacked, they can accidentally send payment to the wrong wallet, or they can throw out a hard drive with bitcoins on it. Rodriguez’s situation was another common one: he lost his wallet and, on top of that, forgot his password.
Bitcoin mining is a lot like mining for gold and it’s one of several ways you can acquire the cryptocurrency. When a Bitcoin transaction occurs, it must be verified. These transactions are placed into boxes that have a “virtual padlock” that must be unlocked. Miners run software that finds the key, unlocks the box, and verifies the transaction. For this, the miner receives a reward of newly generated Bitcoin. Once a person starts mining Bitcoin, it can run itself, essentially funneling the Bitcoin to a digital wallet. Rodriguez, intrigued by the process, set up several computers to mine Bitcoin, which eventually amassed a small fortune. But, as an entrepreneur with a rapidly growing business, Rodriguez was focused on building Animusoft, a Miami start-up that built a software platform for the drone industry called ALIVE. As Rodriguez’s computers were mining Bitcoin, he was using all his time and resources, including the computers mining for bitcoin, to grow his business. His mind on his business, two critical things happened. One, he lost the digital wallet that received the mined Bitcoin. And two, even if he was able to locate it, he no longer remembered the complicated password. And once Bitcoin is lost, it cannot ever be recovered. For a list of ways to keep your Bitcoin secure, check out these tips.
Although most people are not dealing with cryptocurrency (yet), there is a lesson here for every consumer. As the world becomes more digital, consumers have to adapt. That means keeping track of their online accounts, their passwords and their online security. Losing track can mean losing more than just a small investment; sometimes it can mean losing your life savings.
Despite the disappointment of losing the Bitcoin, Rodriguez’s success with his business has far outweighed the loss of his digital wallet. His laser focus on his company has paid off. Animusoft recently raised $1 million in funding for its drone software platform.