Doh! The Five Worst Mistakes Ever Made In Crypto

Even in an industry built on irreversible transactions and self-custody, some mistakes stand out as catastrophic — not because of bad intent, but because of human error, flawed code, or a single misplaced click. In crypto, there’s no ‘undo’ button. One wrong move can vaporize millions in seconds.

Here’s what happens when crypto goes wrong — and why these mistakes still matter today.

1. The Bitcoin pizza guy – First Real-World BTC Transaction

On 22 May 2010, a programmer named Laszlo Hanyecz made the first-ever documented real-world purchase using Bitcoin. He posted on the Bitcointalk forum offering 10,000 BTC to anyone who would bring him two pizzas.

At the time, Bitcoin had no significant market value. It was mostly being mined by enthusiasts on home computers.

“I’ll pay 10,000 bitcoins for a couple of pizzas… like maybe two large ones so I have some left over for the next day.” — Laszlo, Bitcointalk.org

A teenager named Jeremy Sturdivant (handle: “jercos”) accepted the offer. He ordered two Papa John’s pizzas for Laszlo, which cost about $41. In return, Jeremy received 10,000 BTC, which at the time was more of a digital experiment than currency.

What that Bitcoin is worth today

That same 10,000 BTC — which bought two pizzas — would be worth over $750million in today’s market

Laszlo wasn’t trying to get rich — he was trying to show that Bitcoin had utility as money. He later said: “It wasn’t like bitcoins had any value back then, so the idea of trading them for a pizza was incredibly cool.”

He saw Bitcoin’s potential early, but was more interested in helping it become usable rather than hoarding it.

Jeremy, the guy who received the 10,000 BTC, reportedly spent them within a few months on travel and expenses. He said he never expected Bitcoin to become as big as it did.

Now, 22 May is celebrated as Bitcoin Pizza Day across the crypto community. It marks the moment Bitcoin moved from a digital idea to a real-world currency — even if, in hindsight, it cost Laszlo hundreds of millions.

2. James Howells – The Welsh Bitcoin landfill guy 

James Howells, a British IT worker from Newport, Wales, inadvertently discarded a hard drive in 2013 containing the private keys to 8,000 bitcoins. At that time, the cryptocurrency had minimal value, but as of April 2025, this amount is worth approximately $600m.

In 2009, Howells mined 8,000 bitcoins and stored the private keys on a hard drive. During a routine cleanup in 2013, the hard drive was mistakenly thrown away by his girlfriend and ended up in Newport’s Docksway landfill.

Realizing the significance of his loss as Bitcoin’s value surged, Howells sought permission from Newport City Council to excavate the landfill to retrieve the device. The council consistently denied these requests, citing environmental concerns and the potential costs involved.

Legal proceedings

In May 2024, Howells initiated legal action against Newport City Council, seeking either permission to search the landfill or compensation equivalent to the value of the bitcoins. He argued that the hard drive remained his property and that he had the right to recover it.

The council contended that, under the Control of Pollution Act 1974, items deposited in the landfill became their property and that excavation posed significant environmental risks.

In January 2025, the High Court ruled in favor of the council, stating that Howells’s claim had “no realistic prospect of succeeding” and upheld the council’s ownership of the hard drive. The court also emphasized the environmental and logistical challenges associated with excavating the landfill.

Recent developments

Following the court’s decision, Howells expressed profound disappointment but remained determined to pursue other avenues. He indicated plans to appeal to higher courts, including the European Court of Human Rights, arguing that his rights to property and a fair trial were breached.

Additionally, Howells proposed purchasing the landfill site outright to facilitate the search for his hard drive.

However, Newport City Council has shown no interest in selling the site, which is scheduled to be closed and converted into a solar farm by 2026.

As of April 2025, Howells continues to explore legal and practical options to recover his lost bitcoins, despite facing significant legal setbacks and the council’s firm opposition.

3. Bitcoiner who paid nearly $60,000 in transaction fees 

A Bitcoin user recently incurred a transaction fee of approximately 0.75 BTC, equivalent to around $60,000 at the time, due to a misstep involving the replace-by-fee (RBF) feature.

On 8 April 2025, the user initiated a Bitcoin transaction with a standard fee. Seeking a faster confirmation, they employed the RBF feature, which allows users to resend a transaction with a higher fee to expedite processing. In the process of adjusting the fee, the user inadvertently set it to 0.75 BTC.

This substantial overpayment was likely due to manual input errors or misinterpretation of fee metrics within the wallet interface.

Replace-by-fee (RBF) mechanism

RBF enables Bitcoin users to replace an unconfirmed transaction with a new one that offers a higher fee, aiming for quicker inclusion in a block by miners. While this feature provides flexibility during network congestion, it also introduces risks if not handled correctly.

This incident reflects the importance of user education and the need for intuitive wallet designs to prevent costly errors. Users should exercise caution when manually setting transaction fees and ensure they understand the functionalities of features like RBF.

Implementing safeguards, such as confirmation prompts for unusually high fees, can mitigate the risk of similar mistakes.

4. The $300m parity wallet freeze (2017)

In November 2017, a GitHub user going by “devops199” accidentally triggered a critical bug in the Parity multi-signature wallet smart contract. Parity was widely used to secure large amounts of Ether (ETH), especially by ICO projects.

The user unintentionally executed a command that made themselves the owner of the smart contract, and then, trying to fix it, deleted the ownership library — effectively bricking all wallets that depended on it. The result:

• Over 513,000 ETH was permanently locked.
• Worth around $300m at the time; over $1.8bn in 2025 value.
• Funds were completely inaccessible and unrecoverable.

Why it’s shocking? This wasn’t a theft. It was a programming mistake that broke hundreds of wallets, highlighting the fragility of smart contracts and the risks of immutability in blockchain.

5. DeversiFi’s $24m gas fee mistake

In September 2021, the decentralized exchange DeversiFi accidentally paid $23.7m in gas fees for a $100,000 USDT transfer on Ethereum.

The root cause? A user accidentally set the gas fee for the transaction manually, and due to a glitch in the integration between their UI and MetaMask, the wrong fee was signed and sent to the miners.

• The transaction was mined by Stakefish/F2Pool, one of the largest mining pools at the time.
• Remarkably, the miner returned the entire fee the next day — an extremely rare act of goodwill in crypto.

This error showed how fragile DeFi tooling can be and how easy it is to burn millions with a single wrong click. It also raised industry-wide conversations about UI/UX safety and wallet risk management.