The 16-year-old mysterious Chinese boy who bought Bitcoin in 2010 founded the Bitcoinica exchange and was hacked for 102,000 BTC

Author: Weilin, PANews

In 2010, a 16-year-old Chinese teenager named Zhou Tong bought Bitcoin for $10. Later, this self-taught programming prodigy established the first cryptocurrency margin trading exchange, Bitcoinica, in just four days. The exchange's trading volume once reached $40 million per month, second only to the then-largest exchange, Mt. Gox. However, after suffering three consecutive hacker attacks, Bitcoinica ultimately lost 101,554 BTC.

Recently, foreign blogger Rizzo on platform X recounted this legendary story. PANews has compiled the original text, detailing how this teenager lost 102,000 Bitcoins now worth $6.8 billion, a story full of drama.

At the age of 16, Zhou Tong bought Bitcoin for $10 and was deeply interested in the idea that this currency could be sent globally. He introduced Bitcoin to all his friends because he thought it was very "cool."

At that time, in 2011, buying Bitcoin was very difficult, requiring time and reliance on intermediaries. The largest exchange, Mt. Gox, was often offline. Shortly after Zhou Tong purchased Bitcoin, Mt. Gox even experienced a flash crash, with the price of Bitcoin dropping to $0.01.

Zhou Tong was not discouraged by the price drop. This self-taught programmer built an exchange called Bitcoinica in just four days. This was not just another Bitcoin exchange; it allowed margin trading, enabling traders and miners to speculate on future prices. Users could bet up to 50 Bitcoins instantly.

After its launch, Bitcoinica's trading volume skyrocketed, reaching $40 million per month, second only to Mt. Gox. As for Zhou Tong, he made $10,000 in the first two weeks, equivalent to about 2,000 Bitcoins.

However, Bitcoinica soon faced some resistance. Some users were concerned about Zhou Tong's young age, while others worried about his lack of experience. As Bitcoin appreciated, users began to pay more attention to the security measures the exchange took to protect their Bitcoins.

Bitcoinica continued to trade hundreds of thousands of Bitcoins each month. But by the end of 2011, when investors approached him, Zhou Tong quickly sold the company. At that time, he was still in school and busy with exams.

The new owner, Wendon Group, had some doubts about Zhou Tong's work. Therefore, they sought the help of experienced Bitcoin developers to conduct the necessary audits for the exchange. One of them was Amir Taaki, a vocal hacker activist passionate about WikiLeaks and 3D-printed guns.

Wendon Group wanted to prove to Zhou Tong and Amir that they were serious—they made a significant investment. They even spent $1 million to purchase the industry's most sought-after domain: http://Bitcoin.com.

However, Bitcoinica was soon hacked. In March 2012, it lost 43,554 Bitcoins. This loss caused a huge uproar and was even permanently etched on the cover of the second issue of Bitcoin Magazine.

The situation worsened. In May and July of the same year, Bitcoinica's servers were attacked again. Hackers stole a total of 58,000 Bitcoins. At that time, there were no hardware wallets or multi-signatures: all the hackers had to do was reset a few passwords. (Note: The original post on platform X stated that the lost BTC was 99,000, or an incomplete calculation.)

Who should be held responsible for the consecutive attacks? Zhou Tong? Wendon Group? Or Amir? Users did not care; they wanted to recover their lost Bitcoins. Users like @rogerkver lost over 24,000 BTC.

What happened today remains a mystery. Zhou Tong summarized the situation by stating that Bitcoin users and businesses need to take their personal security seriously.

Due to these attacks, Zhou Tong's reputation collapsed overnight. His name became one of the earliest viral Bitcoin memes. Among OGs, the term "Zhou Tonged" is still used to describe investors who have been robbed and deceived.

Zhou Tong's last move was to take out 1,000 Bitcoins and invest in rare Casascius coins. In fact, he owns one of only three of these rare collectibles, now worth over $60 million. Then, he left the industry…

Hacker attacks on exchanges continue to this day. This is why serious Bitcoin investors are advised to use hardware wallets or multi-signature custody. It is estimated that over 1 million Bitcoins, worth $65 billion, have been lost in exchange hacks. Based on the total number of lost Bitcoins, Bitcoinica has the third-largest loss in history.

Today, Bitcoinica remains a warning, reminding people of the lost Bitcoins now worth $6.8 billion. Users should take their custody seriously and use multi-signature security measures, which also serves as a lesson from the Bitcoinica incident.