With one wrong move, a non-fungible token (NFT) collector made a very costly mistake.
On March 25, Brandon Riley tweeted that he accidentally destroyed his CryptoPunk #685, an NFT he had purchased weeks earlier for 77 ETH, which was worth about $129,437 at the time, according to Etherscan.
Riley was attempting to wrap his NFT, which is a process that allows the digital collectible to be traded on Ethereum marketplaces such as OpenSea or Rarible, according to DappRadar. Typically, CryptoPunk NFTs can only be purchased and sold on their own website.
Riley wanted to wrap his NFT in order to list it on NFTfi.com, a peer-to-peer platform that allows users to use their NFTs as collateral to borrow crypto from lenders, Decrypt reports.
While following a step-by-step guide on how to complete the transaction, Riley unintentionally sent his NFT to a burn address, he explained on Twitter.
In the world of crypto, a private key is a password that's used to access the funds held inside a digital wallet. A burn address is a virtual wallet that doesn't have a private key, meaning no one can access it. These types of wallets are typically used to permanently destroy a certain number of tokens, thus creating scarcity and potentially causing the price of that token to rise, according to Coindesk.
'A devastating mistake'
Since crypto and NFT transactions are irreversible, Riley's NFT can't be recovered and can't be owned or traded ever again. The misstep wiped out a third of his net worth, he said on Twitter. (CNBC Make It was not able to independently verify this amount.)
"This is truly a devastating mistake for me. But I did this myself, and it is no one's fault but my own," Riley said.
On Twitter, Riley has since asked Yuga Labs, the owners of the Bored Ape Yacht Club NFT collection who acquired the intellectual property rights to CryptoPunks in March 2022, if he could buy an earlier version of his CryptoPunk #685.
And although he won't ever be able to access his original NFT, Riley's Cryptopunk has now been "resurrected" as a Bitcoin ordinal, a digital asset that lives on the Bitcoin blockchain, he said on Twitter.
How to avoid expensive crypto mistakes
Riley's advice to other NFT owners: Be "way more careful" than he was.
Additionally, always thoroughly research and review any software program you use to store or transfer your digital funds or collectibles.
Using a password manager can be helpful for remembering the multiple complex passwords used to access your digital wallet, Coinbase says. And using two-factor authentication can add an extra layer of security by requiring a second method of verifying your identity.
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