Transcription
Warning: How I Lost $2.2 Million Dollars in Bitcoin and How You Can Avoid the Same Mistake.
Now, Bitcoin has been the best-performing asset in history since its inception over a decade ago. It's had an average 200% compounded annual growth rate. And while there are many stories of people buying at the top of the market and then having to crash down, losing their dollars, there are some other stories of people losing it for other reasons, such as theft, loss, mistakes, things like that.
Now, I personally lost over $2.2 million dollars worth of Bitcoin for making mistakes, and you do not want to repeat the same mistakes that I made. And so, in this video, I'm going to explain how I lost millions of dollars in Bitcoin, what lessons I've learned, why I've completely changed the way that I approach security for my own Bitcoin and cryptocurrency, and how you need to make the same changes right away if you don't want to lose big like I did. So, let's go.
All right, jumping right in here. My name is Mark Moss. Welcome to the channel. And today, I am going to tell you a very painful story. A real story that I have that I literally lost millions of dollars in Bitcoin. And it's a painful story, and to be honest, it's an embarrassing story. But I'm gonna tell it because I have changed the way I'm doing everything, and I'm highly recommending that you change the way that you do it as well.
Now, um, to give you just a high-level overview real quickly, uh, Bitcoin, it's many things. Uh, so I'm not gonna go through this whole thing and catch you up on what Bitcoin is. I'm assuming you already know what it is, uh, and why it was worth millions of dollars to me. Um, but some people call it digital, digital cash. Some people call it digital gold. Is it those things? Sure, it's those things, but it's more. Some people call it a medium of exchange. It's not a good medium of exchange. It is a store of value. It's not a good store of value. Maybe it is, maybe it isn't. Some people are calling it a new internet layer of value. We're seeing today, just in the last several months, we're seeing now chat and voice and video being done over the Bitcoin network. It's not just money, it's value, voice, video, chat. We have no idea where it's really going to go in the future because it's a new technology that's so disruptive. We have no idea how big it's going to get. But one thing that we do know is we do know it's the most secure network, computer network in the history of the world. So, every computer network has been hacked. The CIA's been hacked, the NSA's been hacked. When they hacked the NSA, they stole their NSA hacking software. Experian was hacked, on and on and on. The Bitcoin network has never been hacked.
Now, when I lost my Bitcoin, it's not because the network was hacked, and I'm gonna explain to you what that means. I just wanted to throw that out there, just so you're aware of that right now.
Now, on top of that, Bitcoin is fixing the world. Now, in the Bitcoin space, we say, if we can fix the money, we can fix the world. I believe that. Like a big oak tree, 10,000 leaves on it. Every single leaf is a problem in society. At the base of that, at the root, is the money, is the money printer. And so, if we can fix that, we can fix almost everything else. And some of the properties that it has is that it's decentralized. And so, one of the big problems we have is that a centralized government is making plans. A few guys in, in a far, far away place are making plans for me, for millions, hundreds of millions of people, billions of people. Um, and that centralized control leads to manipulation. We also have a problem where they're printing unlimited amounts of money. And so, when it's decentralized, nobody can control it. Because nobody can control it, nobody can change it, nobody can manipulate it, nobody can print more money for their own benefit. It's also censorship resistance. So that means that not only like with Facebook and YouTube, you're getting censored, but even with my own money, I'm getting censored. So, as my money's in my account, they're inflating it, they're stealing my value through inflation. And if I wanted to send it to somebody, they could choose to stop it or block it or prevent it. For example, you saw recently OnlyFans was talking about, um, getting out of, um, certain adult content because the payment processors would no longer allow them to send money. Now, whether you agree with that or not, it's not the point. The point is that they actively censor what you can and can't spend your money on. So, Bitcoin is censorship resistant. Bitcoin is also immutable law. So, um, we have a big problem right now across the world. I don't know what the laws are going to be next month. They submitted a bill to ban all airline travel if you don't take the current recommended medication. We'll leave it at that. They're changing the laws all the time. I don't know what they'll be next month. We can't live like that. So, it's immutable law, not governance, like all the other cryptocurrencies have. It's immutable law.
But the big thing, and this is what I want to focus on, is that it allows us to self-custody the asset. And that's what allows us to have all those other things. Because I can retain custody. If I have somebody else holding my custody, then it's not decentralized. They've centralized the control. They can now steal it, manipulate it. If I don't have the custody, then it can be censored. And currently, we've seen exchanges saying, "No, you can't withdraw money to those wallets. You can't deposit money from those wallets," et cetera. So, the custody is what gives me all these things. However, in order to have that freedom of me to be able to hold my assets and not have those things, it requires great responsibility. And unfortunately for me, I've messed up in some of that, and it's cost me millions of dollars. And I want to tell you what those ways were because I want you to be responsible.
All right, now let me just show you a couple of losses that I had. I've had more than these. These are the big ones. All right.
Bitcoin Loss Number One. This was back in July of 2017. I was in Mexico. I was on a surf trip down there. And I was withdrawing money into a hot wallet, an app on my phone. It was a Jax wallet at the time. You can see a hot wallet. So that's an app. So there's a bunch of wallets you can download from the Play Store, the iTunes Store on your phone, and you can store your Bitcoin and cryptocurrencies in there. And I needed to spend. I was buying some mining equipment at the time, some Bitcoin miners. And I had to send a big lump sum payment. I think I was limited to like, whatever, $2,500 withdrawal at the time. So every day I was withdrawing into my hot wallet so I could send it all at one time. Um, after several days, I logged into my hot wallet, opened it up on my phone to send it all out, and it was gone. It was completely gone, zeroed out. At the time, it was about $40,000 worth of USD that was gone. At the time, Bitcoin was worth only about $2,000. Oh, do you wish you were buying it back then? So, at the time, I lost about $40,000 USD. But Bitcoin was worth 2.2, 200. So, at the time, it was about 17.8 Bitcoin that I lost. A $40,000 loss. However, today, in today's dollars, that's worth $860,000, almost a million dollars. Now, some people may say, "Well, yeah, you never would have held it." But that's not true. If you've watched my videos, you know I'm never selling, and I'm holding on to everything that doesn't get lost. And that's why I've made these changes that I'm gonna explain to you. So, in today's dollars, if I would have kept that, that $40,000, it literally was almost a million dollars of loss. Now, is that as bad as that sounds? Let me show you the next one. This is the big one right here.
Bitcoin Loss Number Two. In October of 2019, I lost about $220,000 USD value at that time. Now, this happened because of an exchange hack. My money was sitting on an exchange. I logged in one day, it was there. The next day, I logged in, my account was at zero. Bitcoin at the time was about $7,900, about $8,000 at that time. And I lost over 27 Bitcoin at that time. 27 Bitcoin. It was about $220 grand at the time, about a quarter million dollars. Today, it's worth about $1.3 million dollars. If I would have had it in my account, I still would have had it. Now, I'm not going to tell you which exchange it was because I'm in an active lawsuit with them right now. I'm, I'm alleging that it was, uh, their fault, and, uh, I'm trying to get reparations for that. They have pushed the court case back many times. I am staying silent until we finish that out. And depending on what happens, you'll be sure to find out exactly who it was because I want to warn you about that, depending on if they decide to make good or not.
So, if I add just those two up, now I've made other mistakes along the way, but if I add those two up, that's over $2 million, $250,000. $2.25 million dollars that I have lost just in Bitcoin alone, and I'll never get back. It's a big, big, big learning mistake. And I've made some changes. So let me tell you what I've done, and hopefully that you can do, because I don't want you to lose any money, much less big money like I have.
Now, the first thing you have to understand is that everything has trade-offs. And the way that you custody your coins has trade-offs. You have options, but you need to understand the trade-off. So, the first option is, leave it on the exchange. You buy it at Coinbase, or you buy it on Binance, or you buy it on River, Gemini, whatever, and you can just leave it there. Now, the pros and cons of that are that, you know, their security is pretty good overall. It might be better than your own security. Um, the con is that they may decide not to give it back to you. They may get hacked, like what's happened to me. Or they may decide not to give it back to you. The government may come in. We've seen Gary Gensler, the new head of the SEC, is talking about them attacking or going after custody specifically. I believe that's really the weak point of Bitcoin. They can't stop it, but they could attack the custody piece. So, at any given point, they could just say, "You can't withdraw your Bitcoin anymore," like kind of like if you're on a Robinhood or PayPal or Cash App, you can't withdraw your Bitcoin. Um, so it could just be stuck there forever. So, that, so if you leave it on the exchange, their security is pretty good, although I lost my Bitcoin, um, but they could decide not to give it back to you.
The other option is, you can use like a hot wallet, which is like on your phone, an app. And that's one that I would definitely not recommend. I would think of that like a wallet. Like, how much, how much cash do you carry in your wallet as you walk around town? No more than you're willing to lose. You don't keep your life savings in your wallet as you're walking around town. So, I would not leave any more in your hot wallet, your phone app, than you would normally carry around in your walk-in wallet.
The next option is cold storage. So that'd be like a hardware wallet. So a Trezor, a Ledger, or a Coldcard, etc. And that's a pretty good way to do it. Now, I can take custody, but now I'm responsible for it. So the exchange, I don't have exchange risk, but what if I do something to mess that up? And then another option is to have like a multi-signature, which is a cold storage option. Now, I want to break these down for you. I'll tell you what I've had to do. I lost $2.2 million dollars plus. And so, let's just say I'm pretty motivated to make sure I have the very best security that you can ever have. And so, learn from my mistakes.
Now, I've had to upgrade my security. So what I've done is, uh, one, I started using hardware wallets. But I started using multiple hardware wallets because I don't want to have all my money in one hardware wallet. What if it gets hacked? Or what if it gets lost? Or what if there's a bug? Or who knows what happens? And so I've been using multiple of them. I think I had like eight different ones, and I had Trezors, I had Ledgers, I had Coldcards, and it was all split up. So if one thing happened to one, I wasn't going to lose all my money. And that seemed pretty good. But it's super complicated. It's a big mess trying to track everything and see everything. It's just a disaster. The problem that we have splitting up the devices, or specifically using one individual device, is because what if, and I'm not accusing anybody, but what if a developer at one of these companies, Trezor, Ledger, Coldcard, etc., what if one of those developers put in a backdoor? And you know, when Bitcoin gets to a million dollars, they decide to exit scam everybody. Uh, what if, what if there wasn't malicious? What if they just had a bug that they didn't know about? And so you don't want to have all of that dependent on one device. And like I said, it's super, super, super messy and complicated.
All right, the way that I am changing things now, what I believe is the very best security you can have, the top security, as I'm calling it, the one that I'm using to secure my wealth because I don't ever want to lose it again, is something that's called a multi-signature setup. And it looks kind of like this right here. So you can do, typically this would be three keys, as you can see. It's kind of like, if you've watched a movie like the nuclear codes, the president and the general both have to put their key at the same time and both turn at the same time. So it's kind of like that. Um, I would have three keys, and two of the three, the majority, two of the three would both have to sign the transaction at the same time. You could also do three of five if you wanted to do more like that. I am working with a company called Unchained Capital to do this. Um, they have a self, uh, a self, uh, self-serve system that you can set this up on your own, or they have a concierge service, which I've used, where they walk you through it because I don't want to make any more mistakes. And so I've taken advantage of their concierge service to do that.
Now, the benefit of doing that is that there's no single point of failure. So, let's just say, I'm still using the hardware wallets, a Ledger, Trezor, Coldcard, etc., but now I'm using one of each. So, let's just say that there was a bug in one, or there was a malicious actor code, or something behind one of them, potentially, I'm not accusing anybody, but it wouldn't matter because I have three different keys from three different people. The other thing is that it resists a wrench attack. So, the old way, if somebody broke into my house at gunpoint and grabbed my family, I might be a bla, I might be obligated to open my safe and give them my hardware wallets. But now they can't do that. I have one of my keys in California, I have one of my keys in Puerto Rico, and then Unchained Capital holds one of my keys. So it'd be pretty difficult for them to grab me at gunpoint and fly me, you know, thousands of miles away to get the other key. It's not very realistic to do that. And so it resists the wrench attack. No central point of failure. If it's good enough for the nuclear codes, it's good enough for me and my money. No more leaving money on exchanges. No more using, for sure, no more hot wallets on your phone, except for some walking around money. Like when I was in El Salvador a few weeks ago, I put a little bit of money in there just to spend around town. And not even using these hardware wallets anymore, except in my multi-signature device.
Now, the one thing that, the reason why I'm making this video, it's obviously kind of embarrassing. I've been studying and reading and researching and reporting and teaching how to use this for over seven years. I should have this pretty figured out. Um, I have been online. I started my first online business since 2001. My security, my opsec, is above par. I don't ever click on links. I have individual hard passwords for everything. I use a special laptop that's only used for my cryptocurrency transactions. My security is above probably 99% of the people out there. And yet, I still lost money. And so, if I can lose money, you can certainly lose money too. And don't learn from your own mistakes. Hopefully, you can learn from mine.
Now, like I said, there's a few ways that you can do this. You can do it yourself. So using Unchained Capital, I'll put some links in the description of this video. There are some discounts if you want to use their service. There's a link down below. This is not a sponsored or paid for video, by the way. I'm just telling you that up front. I am literally using this on my own because it's costing me daily without it. So check out those links down below. Though, but you can do it yourself. So they have a service called Caravan, and you can set up this multi-sig. There's other options. You can download some other software and you can build your own if you want. And I played around with those, but after a couple hours, I just realized, you know what, I'm pretty good on the internet, but I'm not a coder. And if I get one thing wrong, I could lose all my wealth. And so the, the risk and reward was too high. It's nice that I could kind of do it myself, that's the reward, but the risk was, it was too high. And so what I did is I chose to go with their concierge service, and they just get on the phone and they do like a Zoom meeting and they walk you through it. And so, depending on how much money you have. Now, if you have $10 in Bitcoin, it's probably not that big of a deal. You don't need to spend that much time securing it. If you have $100,000 or a million dollars, then you want to spend enough time to make sure you secure that. The other thing is, like, even when I lost $400, I'm sorry, $40,000 of Bitcoin, which maybe doesn't seem like that much today, it's worth hundreds of thousands. And so you might only have $10 or $20,000 in Bitcoin today, but in five years from now, that could be a million dollars. And so you still want to secure that. And so either use their do-it-yourself service, the Caravan's called, or consider using their concierge service. Like I said, there's links in the description if you want to use that. They'll give you some discounts and stuff like that. This is not a sponsored or promoted video. Uh, but it's what I'm doing myself.
Don't lose your wealth. Warren Buffett said the number one rule to investing is to never lose your money. He said the second most important rule is don't forget number one. Don't lose your wealth. Let me know what you think. Leave me a comment and let me know. Have you ever lost money? I know it's embarrassing and painful. I bared my cards. Let me hear your battle stories. Leave me a comment and let me know if you've lost any money, cryptocurrency, Bitcoin, etc. Other than that, give me a thumbs up on this video if you like it. I'm bearing my soul for you here. It's embarrassing, but I'm doing it for your good. If you don't like the video for whatever reason, go ahead, give me a thumbs down. That's okay. But leave me a comment and let me know what you think. I'm using Unchained Capital multi-sig services. There's links in the description. Um, that's what I got for you today. All right, to your success. I'm out.
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