Both the code and the idea of bitcoin may hav ebeen impregnable, but bitcoins themselves -- unique strings of numbers that constitute units of the currency -- are discrete pieces of information that have to be sorted somewhere. By default bitcoin kept users' currency in a digital "wallet" on their desktop, and when bitcoins were worth very little, easy to mine and possessed only by techies, that was sufficient. But once they became valuable, a PC felt inadequate. Some users protected bitcoins by creating multiple backups, encrypting and storing them on thumb drives, on forensically scrubbed virgin computers without internet connections, in the cloud, and on printouts stored in safe deposit boxes. But even some sophisticated early adopters had trouble keeping their bitcoins safe. Stefan Thomas had three copies of his wallet yet inadvertently managed to erase two of them and lose his password for the third. In a stroke, he lost about 7,000 bitcoins, at the time worth about $140,000. "I spent a week trying to recover it," he says. "It was pretty painful."
From:
http://www.wired.co.uk/magazine/archive/2012/01/features/the-rise-and-fall-of-bitcoin?page=all