Bitcoins in the Bin

News from Newport is not usually known for making headlines around the world, but in 2017, a tale of high-tech heartbreak did. Bitcoin pioneer, James Howells, an IT worker in the city, managed to spectacularly lose tens of millions of pounds by throwing away his old computer hard drive. The drive itself wasn’t worth that much, but the 7,500 Bitcoins it contained were worth a fortune. So, how did it happen, was the drive ever found and where is Howells now?

Starting the Revolution

Newport resident Howells was one of only a handful of people who started Bitcoin mining back in 2009. He worked with the creator Satoshi Nakamoto and successfully mined thousands of the cryptocurrency coins by setting his computer to solve complex maths problems. He saved the Bitcoins to his hard drive with a unique security key that was essential to unlocking them. Without this heavily encrypted key to his virtual wallet, he had no access to the coins.

Unfortunately, during a clear-out in 2013, Howells threw away the wrong hard drive, keeping an unimportant one and binning his Bitcoins. To make matters worse, a house move and other distractions meant that he did not notice the drive missing until four years later. By then, it was buried beneath thousands of tonnes of other refuse at the local landfill site.

Lost Forever

Despite repeated requests to the local council and significant backing from investors to undertake the dig and make the site right again afterwards, Howells was never allowed to go through the rubbish pile for the Bitcoins he had mined years before. He even offered the council a cut of the proceeds, but they declined due to technical and health and safety issues. They also doubted that the drive would still be operable after spending so long buried among other waste. Much to his great frustration, Howells had to let his lost treasure go.

What was the lost drive worth?

The fluctuations in Bitcoin mean that the value of the hard drive — if it still works — has changed considerably over time. When it was first thrown away, it was worth a few hundred thousand pounds, but by the time Howells realised his mistake, that value rose to around £63 m. Since then, losses in the currency have reduced the value to around £20 m. While this is still a sum that’s not to sniffle at, it must have been even more frustrating for Howells to see his Bitcoins dropping in value without being able to cash in before they did.

He’s Not Alone

James Howells is not alone in throwing away or even giving away Bitcoins accidentally. The editor of Gizmodo Australia, Campbell Simpson, once threw out 1,400 Bitcoins on an old hard drive while early adopter Laszlo Hanyecz thought he was clever when creating the first ever Bitcoin transaction by paying 10,000 Bitcoins for two pizzas. At today’s exchange rate, that equates to around £13.5 million per pizza.

Accidental Bitcoin-loss stories have become a part of cryptocurrency folklore to such an extent that one even featured on “The Big Bang Theory” sitcom. In series 11 episode titled ‘The Bitcoin Entanglement’, Sheldon tries to teach his colleagues a lesson, only to lose millions of dollars in Bitcoin in the process (although many experts have found fault with the way in which they used Bitcoin in the plot).

Where is he now?

Bitcoin may have lost value since its sensational spike in 2017, but the currency is still going strong. Today, you can use it for everything from internet purchases of goods and services, to playing at online Bitcoin casinos. Despite his heartbreaking history with Bitcoin, Howells is still heavily involved in the industry, promoting a point-of-sale system called miniPOS.Cash, which allows people to pay with Bitcoin with the same ease as chip and pin or contactless payments. The new system, however, does not have the same flaw as the original Bitcoin keys that cost him a life-changing fortune a few years ago.

Meanwhile, his multimillion-pound hard drive still sits somewhere deep in the landfill. Perhaps one day someone will discover it in the way that Viking hordes of gold coins from long ago are in archaeological digs today. Who knows, by then, it could be worth billions, or it may be altogether worthless.