Peter Schiff, founder of the SchiffGold precious metals brokerage, has caused controversy among crypto enthusiasts after claiming that Bitcoin as a monetary system is broken. Schiff tweeted on Sunday that he has lost all his Bitcoin as his crypto wallet is “corrupted”. Schiff claims his BTC is now intrinsically worthless and has no market value.
However, the real blow to the Bitcoin community came when Schiff commented:
“I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”
Erik Voorhees, long-time Bitcoin supporter and CEO of crypto exchange ShapeShift, gifted the Bitcoin to Schiff in 2018, worth $50 at the time. However, Voorhees claims that Schiff has simply forgotten the password to his wallet and didn’t back up the mnemonic 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://twitter.com/PeterSchiff/status/1218911797626847234 …
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 My wallet got corrupted somehow and my password is no longer valid.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!
In a scathing follow-up tweet which was undoubtedly directed at Schiff, Voorhees said:
“Financial sovereignty: It’s not for everyone.”
Voorhees argues that the situation is the same as blaming precious metals as a foolish monetary system if he lost his gold.
Technically, as Schiff’s funds are stored on the blockchain, there would be no issue accessing his holdings if he had retained the mnemonic phrase. As such, the Bitcoin community believe his claims are ill-founded.
Antony Pompliano, founder of Morgan Creek Digital, argues that the wallet couldn’t have “forgotten” Schiff’s password and offered to help him recover the lost BTC.
The software just executes the commands that humans give it.
It can’t “forget” anything.
Email me and I’ll try to help you recover the lost Bitcoin.
Binance’s Changpeng Zhao (CZ) was also quick to criticise Schiff, saying that:
perhaps the gold expert should “stay in fiat”.
Schiff responds to criticism – Bitcoin Wallet Password
Schiff was quick to respond to criticism, calling his detractors “Bitcoin pumpers” and questioning their integrity. Calling the controversy “fake news”, Schiff claims he didn’t forget his password, and instead the wallet malfunctioned and won’t recognise his credentials.
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?
“I think we can afford to be forgiving of people who are really upset because they just lost a huge pile of money.”
Buterin also claimed that the cryptocurrency community had a responsibility to create better wallet technology to make securing funds easier for novice users.
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.
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