๐ก **The Fascinating Tale of Zhao Tong and Bitcoinica**
In 2010, Zhao Tong, a Chinese teenager, entered the world of cryptocurrency with a $10 investment in Bitcoin, captivated by its potential as a global digital currency.
๐ **Early Challenges and Interest**
- At 16 years old, Zhao faced difficulties purchasing Bitcoin in 2011.
- Mt. Gox, the largest exchange, often went offline and suffered a flash crash that saw Bitcoin's price drop to $0.01 shortly after Zhao's initial purchase.
๐ง **Creation of Bitcoinica**
- A self-taught coder, Zhao built Bitcoinica in just four days.
- Bitcoinica distinguished itself by allowing margin trading, enabling users to speculate on Bitcoin's future price.
- The platform quickly gained popularity, trading up to $40 million monthly, ranking second only to Mt. Gox.
- Zhao made $10,000, or about 2,000 BTC, in the first two weeks alone.
๐ **Growth and Challenges**
- Despite rapid growth, Bitcoinica faced skepticism due to Zhao's age and concerns about security.
- Critics doubted the platform's safety, but it continued to handle large volumes of Bitcoin trades.
๐ **Transfer and Subsequent Hacks**
- Overwhelmed by school exams, Zhao sold Bitcoinica to Wendon Group in late 2011.
- Wendon Group invested heavily, acquiring the Bitcoin.com domain for $1 million.
- Disaster struck in March 2012 when Bitcoinica was hacked, losing 43,000 BTC, followed by two more hacks resulting in the loss of another 48,000 BTC.
- Bitcoinica's security flaws, including vulnerability to password resets, contributed to these incidents.
๐ **Aftermath and Legacy**
- The hacks caused outrage among users, including notable losses for investors like Roger Ver.
- Zhao's reputation was damaged, and "Zhao Tonged" became a meme for those who lost funds due to hacks.
- Before leaving the industry, Zhao invested 1,000 BTC in a rare solid gold Casascius coin, now worth over $60 million.
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