Today I head about a guy who had deposited his crypto in an exchange however when he tried to withdraw it the exchange denied it on some technical grounds.
I was reading this on my mobile and though I wanted to follow up but it got lost somewhere in the feed.
A crypto loss is a big loss.
We invest in crypto with the hope it would do good in the future.
Crypto being a new asset class is still very volatile.
This makes it a high risk high reward investment for many.
Yet due to the slightest mistake all our crypto holding can be gone and vanish in a second.
The Mt. Gox hack
Mt. Gox was a reputed exchange that was at one time dealing with around 70% of bitcoin trades.
However one fateful day on June 19 2011 there was a security breach that caused the price of Bitcoin dropped to 1 cent and a hacker used the credentials of an auditor to transfer large number of Bitcoins to his account.
There was more drama to follow however the investors whose bitcoins were in the exchange suffered the loss.
The common denominator is loss
Thinking of loss I am reminded of four business partners who came across a very cute cat.
They were so enamored by its beauty that they decided to keep it as a pet.
Since they were business partners they decided that each leg of the cat would belong to one of the 4 partners.
All was fine till one day the cat got attacked by a dog and one of its legs got wounded.
Its owners called the doctor who applied a bandage to the wounded leg.
The injured cat needed more care and so they took turns to feed it and take care of its needs.
##One fateful day
One of the partner whose number corresponded to the injured leg had to go out of the city.
So it was decided that the rest of the three partners would take care of the cat.
Fate had other plans
That night there was a storm and the cat got very scared and ran around the house.
In this process the bandage that was wrapped to its leg caught fire.
This made the cat jump and run all over the house.
The three partners were fast asleep an in no time the house was on fire.
By sheer luck the three partners managed to escape the house and save their lives.
However the house could not survive the fire.The cat was no where to be found.
Below the house was the store where the partners used to store their goods.
Even the store got gutted in the fire.
The fourth partner arrived
Next day when the fourth partner arrived he was stunned to see the loss. It was assumed that the cat too died due to the fire and so the news of the death of the cat devastated him even more as he loved it very dearly.
The insurance claim
When the partners tried to claim the damages from the insurance company the investigating officer filed a report that since the fire was caused by the cat who was the pet of the owner so no claim can be filed.
The infighting begins
The four partners started to fight amongst each other and the matter reached the court of law.
The three partners who were left to take care of the cat were very clever and put the blame of the fire on the fourth partner.
Their argument was that since it was the leg owned by the fourth merchant that was injured and had the bandage on.
It was this bandage that had caught fire and so the blame of the fire falls on the fourth merchant and he should pay the damages.
The argument seemed legit and the fourth merchant seemed destined to be made accountable for the loss and liable to pay the damages for the loss.
The last resort
The fourth merchant was devastated by the loss of the cat and the deceit of his partners.
So he approached the biggest lawyer in the city. Having mercy on his condition the lawyer decided to help him.
Next day he presented the case.
His argument was as follows.
It is agreed that the bandage was on the leg of the cat that was the responsibility of the fourth merchant.
However due to the injury the cat was not able to use it. So when the bandage caught fire it limped and ran using the other three limbs.
Since the cat spread fire by the use of the other three legs owned by the other three merchants So the loss should be covered by the other three merchants.
The argument seemed logical in the eyes of the jury and so the fourth merchant partner was saved from paying the damages.
The lessons from the story and the common link
So fault may be anybodies yet it was the cat that got supposedly killed. The same way what ever the reason of the crypto hack it is the owner of the crypto who suffers if your crypto is stolen from the exchange.
Not your keys not your crypto. Do not leave your crypto on an exchange.
However these days even crypto in your possession is not 100% safe unless it is in a hardware wallet.
Are Hardware wallets a worthwhile investment?
If you value your hard earned crypto then you should consider getting a hardware wallet.
Think of a hardware wallet as an investment and not an expenditure.
As your crypto would grow in value over time so there would always be a risk due to it being stolen or you losing the private keys.
The best solution is to keep it off and away from the internet in a hardware wallet.
There are a number of choices and some of the best ones can be found here.
Coming back to the story
It was a story and I hate to see the cat die in the end . I hate hurting any living thing even in a story.
So let us end the story by saying that the cat too had escaped the fire and was hiding some where.
Seeing the 4th partner who loved it very much the cat came limping back and got reunited with him.
The fourth partner nursed it back to health and they lived happily ever after.
This being a story can be modified however one you lose crypto it cannot be brought back so give a serious thought about investing in a hardware wallet.
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