In 2010 Someone Lost Access To a Wallet With 9000 BTC

The date was August of 2010 and in this month a Bitcoin user lost access to his wallet containing 9000 BTC, a terrible loss if we look at the current prices, but how did this happen?

This were the early days of Bitcoin and everyone was playing around with Bitcoin. This person wanted to test something and after buying 9000 BTC he proceeded to transfer them to his wallet. To check how Bitcoin worked he proceeded to send 1 BTC to himself, triggering a transaction in the Bitcoin's blockchain. What wasn't very well known is how inputs and outputs work, meaning that everytime a transaction is made all the coins in a UTXO leave the wallet, in this case 1 BTC gets delivered to the address sent and the other 8999 BTC goes to another addres controlled by the user who sent 1 BTC.

In that time it would mean that a new address would be generated to receive the 8999 BTC. A new backup of the wallet would be needed to be done to ensure the wallet.dat file would include this new address. This is where this user went wrong, he didn't know he had to do a new backup and proceeded to wipe the disk and install his system again, when he loaded his old backup file in the Bitcoin client he had 1 BTC in his wallet and 8999 BTC sent to another wallet where he was completely locked out of. These coins were lost forever in that day.

This clearly could happen to anyone in that time, making a backup everytime a transaction is made in this days might seem an insanity, but at that time it was a reality. The backup needed to be updated everytime a transaction was made.

It was shortly after this that Satoshi purposed to put various addresses in the same wallet, making outputs and inputs manageable in these addresses, this would mean that the backup only would have to be done once when creating the wallet.

The truth is that Stone Man (Bitcointalk username) lost access to 8999 BTC, currently valued at over 232 million dollars.

The conversation in Bitcointalk can be found here.

The wallet address with lost Bitcoins can be found here.