TLDR: External harddrive on top of the console disrupted it's ability to connect to Wi-fi when placed on top of the console, possibly caused by vibrations (always place off of the console). Unsure if this applies to all XBOX 1 or just the One X.
Edit: It has been suggested in comments that it could actually be something to do with a electromagnetic field causing interference.
Recently got a Seagate external harddrive due to game files exploding in size.
When I first plugged it in I thought to myself, this will look tidy on top of the console, once turned on immediately the console was unable to connect to the internet. No matter what I tried to resolve it nothing was working and I begun to get stressed (not a good time to quit smoking) and panicking a bit.
Fortunately, I have a friend who is sharper at internet research than me and while I checked on my laptop that the device was fine, he managed to dig out a 3 year old Reddit post on the topic which, lead us to find out that there are some components related to the console WiFi on top of console that get disrupted by the external harddrive.
So in short thank you Reddit for being a useful source of information.
Edit: alternative and more logical reason added in the TLDR for WiFi interference.
To the few toxic users, you can down vote every comment I make but it doesn't change the fact that this has actually been a common issue for many others as well.