In perhaps the most entertaining development in the blockchain world this month, famed Bitcoin-skeptic Peter Schiff has lost access to his Bitcoin wallet and subsequently regained it. What makes it so entertaining is the outburst he caused on Twitter by claiming that his user error was proof that Bitcoin was a bad investment.
The story starts with this tweet:
“I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”
From there, numerous people started to chime in with their thoughts on what Schiff could do to recover his crypto. Even Morgan Creek Digital Anthony Pompliano co-founder and partner at
After spending a few days tweeting about how bad an investment Bitcoin was due to its unreliability, he was forced to post that he had regained access to his wallet after realizing that he’d mixed up his PIN with this seed phrase.
Whose Fault is User Error?
The crypto-sphere has always been full of the sentiment that the older generations don’t understand Bitcoin and what it represents, which makes this recent development amazingly entertaining.
Schiff now knows what he did wrong and what he could have done to retain access to his crypto, but still insists that this incident is proof of its nonviability. As he later tweeted:
“The most basic thing about Bitcoin is that it’s not money. It will not succeed as either a medium of exchange or a store of value. What the episode does show is how easy it is to lose your Bitcoin if you are confused about how wallets work.”
Designing for Scalability
He seems confused about the difference between functionality and scalability here. His Bitcoin is working perfectly, but does have a design that makes it difficult for some to understand. All of this does eventually lead to a bigger idea about user accessibility, because this won’t be the last time someone struggles with their ability to use the wallet. Although Schiff was tweeting in bad faith, the idea that someone could lose access to their money due to user error will continue to be an issue.
Online banking took a long time to catch on because people weren’t used to using their computers to access their money, and this is the natural next step. Users can both access and control their money, which is an important distinction and evolution from online banking.
Binance CEO Changpeng Zhao made the point that cryptocurrency may be better managed if kept in the crypto exchange’s wallet. And Ethereum co-founder Vitalik Buterin pointed out there were still major issues for user access in the ecosystem and that the sector has a lot of room for improvement when it comes to how simplicity. Basically, an intuitive design is the only way crypto will end up scaling.