"I'm not sure what to do now or how to feel. This was my life's savings. Where do I start from?"
This is the story of Kim, whose mom threw away the seed phrase to his 20 BTC worth $410,000 that took him 2 years to gather. This is a lesson in crypto self-custody. Let's find out what happened.
How Kim Made His Money
Kim came from a family with little means. When he was 23, he left home to hustle with his friends. He found out about crypto in 2020 and took his time to learn what he needed to know.
Knowing how hard it is to make money, he was very keen on capital preservation. He never joked about taking profits. This ruthless and disciplined approach to trading saw him turn $1,300 into over $500,000 by the end of 2021.
He was not going to lose any of his fortune. Not to hackers, scammers, or anyone who thrives around him. How will he keep his hard-earned money safe?
Kim Keeps Seed Phrase Where He Feels It Is Safe
Back home, the family picture hung on the wall is one of the items that never gets moved. So he thought to himself. That's the safest place to keep my seed phrase.
He created a new wallet, wrote down the seed phrase on a piece of paper, and transferred all 20 BTC into it. He visited his family that weekend and had a good time. When it was night and everyone else was asleep, Kim took out the piece of paper where he had written his seed phrase, and attached it to the back of the family picture in the living room.
It looked perfect, just as it was. No one would ever think something was there. Feeling safe and secure with his BTC, he went back to squat with his friends.
The Unexpected Happened
Almost a year later during the holidays, Kim visited his family. He felt it was the right time to let his parents know how much money he had made. He wanted to use some of the money to set up a business for his father, as he was about to retire.
During dinner that evening, he broke the joyful news. His parents couldn't hold back the tears of joy. His father said to him, "I am so proud of you, my son."
Kim stood up, went towards the family picture hung on the wall, and brought it down. He couldn't find the piece of paper he attached to the back. He was confused. "I kept it here," he mulled.
"Mom, did anyone see any piece of paper I attached behind this family picture?", he asked out loud. His mom came close and asked what it was for. He explained that he wrote the seed phrase to his fortune and kept it there for safety reasons.
He asked again if she saw it. Feel sad, embarrassed and dejected, his mom said in a low tone, "I threw it away two months ago. No one knew what it was. It didn't make sense to your father and I, so we just disposed it with the trash".
Kim felt a sharp pain run through his heart. With fists clenched, he went on his knees and started crying profusely. It was like the ground would open up and swallow him.
What Can We Learn From Kim?
Kim's story was a very sad one. Unfortunately, many today have experienced something similar. Maybe not so dramatic. Self-custody of crypto is not an easy task. Millions get lost every now and then.
For best self-custody practice, here are some things you can do, to avoid a situation like Kim's:
Use a hardware wallet
If you have it written and don't want to keep it with you, keep it in a safe.
Use a trusted centralized exchange if you are not sure how best to self-custody
In 2021, a man lost over $200 million worth of Bitcoin after he accidentally deleted the private keys to his wallet. In 2022, a hacker stole over $600 million worth of crypto from a number of different self-custody wallets.
I don't want you to be the next victim.
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