China's Bitcoin tragedy! A university laboratory mined 2 BTC, but after graduation, they were scrapped, resulting in a loss of 600,000 RMB.

A Shanghai engineer shares his experience of losing Bitcoin: 12 years ago, while working as an administrator in the university's supercomputing lab, he mined more than 2 Bitcoins using idle computing power from the equipment. The Offline Wallet was saved on the hard drive of the computing node. Upon graduation, he did not take it with him as Bitcoin was worthless at that time. A few years later, Bitcoin experienced a big pump, and when he contacted a junior who stayed behind to teach, he learned that the lab's equipment had long been scrapped. Calculating at the current Bitcoin price, its value exceeds 600,000 RMB.

Opportunity for Mining Machines in University Part-time Supercomputing Labs

12 years ago, this old friend was still a university student and successfully applied for the position of administrator in the school's supercomputing laboratory. Since it was a supercomputing lab, the equipment was quite impressive, with computing power far exceeding that of ordinary computers. In terms of equipment usage, it was basically busy when there were people around, but when there were no people, the equipment was mostly idle.

After discovering this pattern, Lao Tie started to get creative. At that time, Bitcoin had just started to rise, and mining wasn't as difficult as it is now; even regular computers could participate. The equipment in the supercomputing laboratory had computing power dozens or even hundreds of times that of a normal computer. Lao Tie created a mining program himself, allowing the equipment to mine using idle computing power during the late night, automatically shutting down at 9 AM.

Such operations were not uncommon in the tech circle at the time. From 2010 to 2013, Bitcoin was still in its early stages, and the mining difficulty was far lower than today. Many students or researchers with technical resources used their school's or laboratory's equipment for mining. Some did it to study blockchain technology, while others purely aimed to obtain this emerging digital currency.

After working part-time in the lab for two years, the old iron accumulated over 2 Bitcoins, and the Offline Wallet was stored on the hard drives of two Computing Power Nodes. This method of storage was considered the safest at the time because the Offline Wallet was not connected to the network and theoretically could not be hacked. However, this “safe” storage method later became the source of tragedy.

The Fatal Oversight at Graduation

When graduating, the old buddy did not take the wallet files and just left the school. Why did he make this decision? Because at that time, Bitcoin was not worth much. Between 2012 and 2013, the price of Bitcoin fluctuated between a few dollars to several tens of dollars, and 2 Bitcoins might only be worth a few tens to a few hundred dollars. For a newly graduated college student, this amount of money might not even be as much as a month's living expenses.

More importantly, at that time, almost no one foresaw that Bitcoin would experience a big pump in the coming years. Back then, Bitcoin was still an extremely niche thing, regarded by mainstream society as a “internet toy” or “geek's game.” Many believed it was just a fleeting technological experiment that would soon disappear. In this context of perception, it seemed a “reasonable” decision for the old iron to choose not to take the Wallet file.

However, this “reasonable” decision later became one of his biggest regrets. The price trajectory of Bitcoin completely shattered everyone's expectations. In 2017, Bitcoin first broke through 10,000 USD. In 2021, Bitcoin reached an all-time high, nearing 70,000 USD. Even after experiencing multiple big pumps and drops, the current price of Bitcoin still remains above 100,000 USD. This means that the 2+ Bitcoins mined by the old iron back then are now worth over 200,000 USD, equivalent to over 600,000 RMB.

The apprentice's helpless reply: The equipment has been scrapped

Later, Bitcoin experienced a big pump, and the old friend suddenly remembered that he still had 2 Bitcoins saved on the laboratory's equipment. He tried to contact the laboratory manager, who was later a teacher at the school. However, the teacher's reply left him completely in despair: the laboratory equipment had already been replaced with new ones, and the old equipment had long been scrapped.

When the equipment was replaced back then, the laboratory followed the standard procedure and only exported the work files of each person from the main node. However, the old buddy's Bitcoin wallet file was not in the work file directory, but was saved in a hidden folder of the computing power node. The personnel responsible for data migration had no idea that there were such important files there, and they were thus overlooked.

After the old equipment is scrapped, according to the school's asset disposal process, hard drives will be physically destroyed or formatted and treated as electronic waste. This means that the old iron's Bitcoin wallet file, along with those 2+ Bitcoins, has permanently disappeared in the landfill or recycling station. Without the private key, it is impossible to access Bitcoin, which is a hard rule of blockchain technology. Even though those 2 Bitcoins still exist on the blockchain, without the wallet file, they are equivalent to being permanently locked and can never be used again.

There is really no way, all that is left for the old iron is a sigh. This feeling is more painful than never having had it before, because he clearly had it, but lost it forever due to his own negligence.

Bitcoin Loss Case: A Shared Tragedy from 8000 Coins to 2 Coins

The experience of Old Iron is not an isolated case. When it comes to lost Bitcoin, the most famous case is that of British programmer James Howells. In 2013, Howells accidentally threw away an old hard drive containing the password for 8,000 Bitcoins while cleaning his office, and the hard drive was buried in a landfill in Newport, Wales. Now, over 10 years have passed, and he still has not recovered this virtual asset worth billions.

Howell has applied multiple times to the local government for permission to excavate the landfill, even willing to pay high fees and promising to share the recovered Bitcoin with the local government. However, the government has consistently rejected his applications on the grounds of environmental risks and excavation costs. That hard drive is buried under thousands of tons of garbage, and even if excavation were to happen, there's no guarantee it could be found, and even if it is found, the hard drive may already be damaged and unreadable.

Common Reasons for Bitcoin Loss:

Hard Drive Damage or Disposal: The most common reason for loss, hard drives are scrapped, formatted, or thrown away as garbage.

Forgot Private Key or Password: Bitcoin wallet has set a password but forgot it later, unable to unlock.

Exchange Closure: Storing Bitcoin in centralized exchanges, the exchange may run away or go bankrupt.

Inheritance Issue: The holder passes away, and the family is unaware of the existence of the private key or how to use it.

According to estimates by the blockchain analysis company Chainalysis, approximately 3.7 million Bitcoins are permanently lost, accounting for about 20% of the total Bitcoin supply. Although these Bitcoins still exist on the blockchain, the private keys have been permanently lost, equivalent to being locked in a safe that can never be opened.

Blood and Tears Lesson: Important Files Must Be Backed Up

These two cases about Bitcoin serve as an important reminder to everyone: important work files, etc., must be backed up, and unique electronic files must be properly preserved. Otherwise, when lost, there is no way to do anything but regret and sigh.

This lesson is especially important for cryptocurrency holders. The decentralized nature of Bitcoin means there’s no “customer service” to help you recover your password, no “bank” to reset your account. The private key is everything; losing the private key is equivalent to losing your Bitcoin.

Suggestions for Avoiding Bitcoin Loss:

Multiple Backups: Backup the wallet files or private keys at least 3 copies, stored in different locations.

Using Hardware Wallets: Professional hardware wallets are safer than computer hard drives and are less likely to be damaged or lost.

Regular Check: Regularly verify that backup files are intact and that the private key is functioning properly.

Inform Family: Let at least one trusted family member know that you have cryptocurrency and how to access it.

The story of Lao Tie reminds us that while technology brings convenience, it also brings new risks. In the world of blockchain, you are the sole guardian of your wealth; no one can help you recover a lost private key. Careful storage and regular backups are the only ways to protect your digital assets.