The Terrible Week
As I had mentioned before, this was indeed the Digital Wild Wild West, and I had just fell victim to my first scam! On top of that, I accidentally locked away 46 ether tokens in an account I couldn’t remember the password to… all within 7 days!!! If I had hair, I surely would’ve pulled it out. Let me go back and explain.
Everything was going well with work, a little frustrating and challenging at times, but it was a good frustration. While work was going well, I was getting a little too lax and confident once it came to trading crypto amongst myself. And just like clockwork, there was the universe letting me know it’s still there! Not only did I make one rookie mistake…but two!
My first mistake
The first rookie mistake was locking 46 Ether tokens in Mist (a software wallet) and not knowing the password! At work the week prior, I was tasked to look up public Eth accounts and follow the money, learning how to read the transaction and all the details within the receipt. After staring at 1s and 0s, Xs and Os, I started to have an appreciation for round numbers and symmetry.
So later that night, I decided to split up my Eth tokens among my numerous accounts, making each one have the same number of ETH in each account. I had two accounts with a nice, solid, round number in both. The third account was a few short, but I figured any profit I’d throw in that account to even it out. I tried so many passwords to unlock that account but still to this day, NO LUCK. By the way, the 46 tokens started at $800, and they are at $11,902 as I write this!
The bad week builds
And now the second rookie mistake. Since I was just trading amongst myself, I did not need to use a major exchange like Kraken or Coinbase. Instead, I opted to use Shapeshift. At the time, Shapeshift was everything I needed. There were some limitations coin-wise, but besides that, the site was awesome! All I had to do was pick which token I wanted to “Shift” and then choose what token I’d like to receive in return. After that, I just needed my return address and my destination address and Shapeshift did the rest. On top of that, the fees were small and IDEAL!
One day while browsing the internets, I came across an article that was promoting a competitor to Shapeshift with even LOWER fees. This seemed too good to be true, but hell, I figured I’d give it a go. I mean competition among competitors is great for the consumers right? I was always told to shop around for the best price, and now I could do that with crypto.
At the time, I was on the Dash (coin) wave. My entry point was around $9 and rose to around $45, giving me my first real gains. So I decided to turn my profits from Dash to Ether, but instead using the new “cheaper” exchange. So I did the same thing as I would on Shapeshift, entered the desired coins, addresses, and destinations. And what do you know, it worked like a charm. Things went off without a glitch. I used them a few times after that, again for small amounts. Then as soon as I got a little faith in the new exchange, I sent 13 Dash to be converted and sent to my other wallet. I went through the normal routine, but this time, something was up! I looked up my transaction receipt and it appeared that my coins were sent to another address.
Crypto trading lessons learned
I reached out to their customer service, and I got an auto reply say thing they’ve received my ticket and they’d be in touch shortly. I thought things were cool, but I kept an eye on my funds in the account it was transferred to that was not mine. Then the coins started to move! Who would’ve thought that the tedious soul-draining tasks I did at work, would be helping me track my coins. As I watched the funds being moved around, and that’s when I knew…I GOT SCAMMED.
I knew it a scam, but I wasn’t completely sure until the same website that originally informed me of the “cheaper” competitor, came out with an article saying the site was a scam. It ended up being a fake sell website where they built a website and took bids themselves and just used Shapeshift to place the bids, and when an order was big enough, they’d steal the funds. Ain’t that about a B! Only if I just would’ve used the hardware wallet T got me..
Despite these setbacks I stayed determined to go forward with my crypto trading. It certainly helped that the Dash token was continuing its bull run and making moves, the gains from that helped make up for the loss of my Ether tokens. It was a tough two lessons that week, but I learn from my mistakes. Always use reliable, trusted sources; own your own keys; and use a hardware wallet.
To understand what led up to Jordan’s crypto trading mishap, read his Part 1 and Part 2 from Tales of a Trader. And if you are now questioning wallet security, first make sure you have a decent understanding of cryptocurrencies, and then explore some wallets! Don’t get scammed… Understand wallet security if you are investing in crypto. Read our Ask the Expert, “How do I keep my cryptocurrency secure,” if you would like to learn more.