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Bitcoin buried in Newport landfill

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Docksway landfill, Newport, Wales, 2007. The hard drive containing Bitcoin was buried here in 2013.

In mid-2013, James Howells disposed of a laptop hard drive containing the private keys for 8,000 Bitcoin[a] in the Docksway landfill in Newport, Wales. Howells subsequently assembled a team of specialists and secured funding to excavate the site, but the Newport City Council refused permission, citing the cost and environmental impact of the search. If the coins are discovered, Howell proposes distributing 30% of the proceedings among the council and the population of Newport.

As of November 2024, the missing Bitcoins were worth $750 million. Howells sued the council for £495 million, with the council contesting that the device is now their property. The High Court held a hearing to determine if a trial will take place. The attempted recovery of the missing Bitcoin has been likened to a digital treasure hunt. Howells and his team are confident that retrieval of the data remains possible, while the council continues to profess their scepticism.

Background

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Logarithmic chart showing the number of Bitcoin transactions per month since 2009, when Howells began studying the protocol.[11]

Creation of Bitcoin

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Main article: History of bitcoin

Bitcoin, the first decentralized cryptocurrency, was announced in October 2008 with the whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto,[11][12] followed by the implementation of the protocol as a peer-to-peer network in January 2009.[13] It is a significant digital currency that uses cryptography to verify blockchain transactions and record them in a public ledger.[11][14]

James Howells

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James Howells, a Welsh computer engineer from Newport, was influenced at a young age by his mother, who was involved in the production of microchips.[15][16][17] By his teens, he was a regular user of the internet. Howells began building computers at the age of 13 and became a Napster user around the time of Bitcoin's inception.[11][18] Working various IT jobs, he learnt about encryption while working on a Bowman communications system. Howells taught himself about Bitcoin in December 2008 and began studying the concept a month later.[18] After the 2008 bank bailout, Howells considered fiat currencies a scam, favouring the vision of Bitcoin inventor Satoshi Nakamoto instead. He became an early adopter of the technology in 2009.[11] By 2013, Howells was living in Newport with his three children and then partner Hafina Eddy-Evans.[19] The two later broke up with Eddy-Evans leaving with the children.[11] In 2021, he worked from home maintaining emergency-response systems in Wales.[11] A year later, he described himself as a cryptocurrency and blockchain project manager.[20]

Early Bitcoin mining

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Logarithmic mining difficulty chart of Bitcoin, showing the ease of mining in 2009 when Howells started mining.[21]
Further information: Bitcoin mining

On 15 February 2009,[18] James Howells, started mining Bitcoin with a Dell XPS laptop.[5][2] He recalled mining 400–800 Bitcoin intermittently overnight for two months,[18] which caused his device to overheat.[11] Howells later damaged the device and dismantled it for parts, selling some on eBay.[5][2] The laptop, containing 32 kilobytes worth of Bitcoin private keys, was also used for gaming, and held music, e-mails and family photographs.[11] The Telegraph considers Howells one of the earliest miners on the Bitcoin network,[22] with The New Yorker further identifying him as one of the first five miners.[11]

Disposal of hard drive

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Between 20 June and 10 August 2013, Howells accidentally disposed of an encrypted hard drive,[5][2] mistaking one device for another.[16] The disposed hard drive contained the cryptographic private keys for 8,000 Bitcoin[a][20][7][9] valued at £500,000 at the time.[2][22] According to reports, Hafina Eddy-Evans, Howells' partner at the time, took the trash with the hard drive to the tip (landfill).[11][18] According to Eddy-Evans, Howells "begged" her to take the unwanted items to the tip, and she reluctantly obliged, only doing so after a school run. She denies fault,[19][23][24] while Howells said he "subconsciously blames" her for the loss of the hard drive.[11]

By November 2013, the device was approximately three to five feet underground in Docksway landfill, Newport, South Wales, with an approximate value of £4 million.[1] At the time, Howells accepted that the coins were lost for good.[2] Newport City Council notes that the hard drive was likely "buried under 25,000 cubic meters of waste and earth",[25] weighing approximately 110,000–200,000 tonnes,[5][7][26] with CNN reporting the challenge in finding the device as near to impossible.[25] The former manager of the landfill site says the hard drive is located in a 15,000 tonne section named Cell 2, where waste was buried between August and November 2013.[18] The site holds 1.4 million tonnes of waste in total.[27]

Search attempts

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Logarithmic chart of Bitcoins price from 2011 to 2019, showing the increase in value of the hard drive since its dispoal. As the value increased, since 2017, Howells escalated his attempts to try and retrieve the device.[11]

In December 2017, Wired reported that the Newport City Council refused to allow Howells to search for the hard drive. According to Howells, the proposed search involves the first case, unrelated to a criminal investigation, of excavating a landfill site in the United Kingdom. The council cited cost concerns, environmental impact, galvanic corrosion of the device, and the potential of "treasure hunters" breaking the law.[5] Initially the council took a soft approach to the situation, indicating that they would return the device if found, but later took a tougher stance,[11] and stated that searching for the hard drive would be against the law.[4]

In January 2021, after repeatedly requesting access to search for the device, Howells offered the council 25% of the proceedings then valued at approximately £200 million.[11] He offered to donate £52.5 million ($71.7 million) to the council which would go to the 316,000 people of Newport, equivalent to £175 per person.[28] The council refused, claiming Howells' offer was in breach of licensing regulations.[28] Howells believes the drive is still functional due to its protective casing[29] and the anti-corrosive cobalt layer coating the glass disk.[11]

To support his search efforts, Howells acquired financial support from a hedge fund with whom he would split 50% of the proceedings.[28] He believes that using council waste records they can identify the location of the device.[29] After they identify and find the hard drive, a team of data recovery specialists will help recover the Bitcoin.[28] The council estimates that the excavation would cost millions of pounds,[29][30] with Howells budgeting £5 million for a 9-12 month operation.[11]

Even if we were able to agree to his request, there is the question of who would meet the cost if the hard drive was not found or was damaged to such an extent that the data could not be recovered.

In August 2022, Howells expanded his search plan to include the use of artificial intelligence using a mechanical arm to scan waste to identify the hard drive; the plan also called for using drones, and Boston Dynamics robotic dogs for security, as well as recruiting an AI specialist and an environmental team to the project.[20][26][8] His team includes eight experts in landfill excavation, and a data recovery advisor who helped recover the black box from the Space Shuttle Columbia disaster. The budget also increased to £10–11 million with the help of venture capitalists who would retain 30% of the proceedings along with Howell.[7][26] His new time-frame for the retrieval of the device was updated to between 18 months and 3 years, with a cost of somewhere around $6 and $11 million respectively.[9]

Additionally, Howells now intended to develop a community-owned mining facility on the landfill site with the proceedings.[8] The facility would use solar or wind power.[26] That same year, Richard Hammond produced a short documentary on Howells' quest to retrieve the drive involving the recovery team, and by September 2023, the team doubled in size.[31]

Litigation

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Howells' legal team published an open letter to the Newport City Council on 6 September 2023 with his intention to sue. The letter sought to prevent future works on the site while seeking £446 million in damages and a judicial review of the council's decision refusing access to the site.[31] Two months later, his legal team wrote again to the council requesting access prior to pursing a case in court.[32]

By October 2024, the contents of the hard drive were estimated at $750 million. Howells sued the council for £495 million,[27][33] setting a date for a commerce court in Cardiff in December 2024, arguing for intellectual property rights among other claims.[34] According to Wales Online, Howells was represented by the same team of barristers that also represented some of the alleged victims against Mohamed Al-Fayed. In response, the council argued that they legally own the device as the property was deposited to the site; Howells' barristers denied such claim based on intent.[33]

The council requested a High Court hearing on 3 December with the intent to have the case dismissed. The Judge postponed the verdict until a later day. Council barristers argued Howells attempted to "bribe the council" by offering a percentage of the Bitcoin to the local community. Howells' legal team contested, arguing that their client was entitled to search for his missing hard drive.[35][36]

Opinion

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Howells said that he would have sold 30–40% of the Bitcoin in 2013 if he had access to it, believing that reaching $100,000 was a "conservative figure" for the cryptocurrency. By 2017, he described cryptocurrencies as the "new gold, oil and water combined". He focused on Bitcoin Cash and Ethereum,[5] anticipating an increase in Bitcoin's value on the hard drive rising to between $500 million and $1 billion.[22] In 2024, approximately seven years later, the value of the hard drive increased to $749 million[34] as the Bitcoin price reached $97,000.[37]

Howells believed that the chances of retrieving the device increased as the value increased.[22] Analytics firm Chainalysis estimated in 2020 that 3.7 million bitcoin (out of an all-time total of 21 million bitcoin) were lost like Howell's.[38] By 2022, Howells was 80–90% confident that he could successfully recover the hard drive data.[26] At the same time, he acknowledged that the device was "a needle in a haystack" and that the investment from venture capitalists was extremely high-risk.[26]

In 2024, Howells' legal team stated in court that the metaphorical haystack was theoretically "much, much smaller", due to the "considerable expertise" involved in planning an excavation.[35][36] Attempts to recover the device is often described as a digital treasure hunt.[9][34][39]

Notes

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  1. ^ a b Reports of the total number of Bitcoin lost were initially 7,500 in 2013,[1][2][3] 2017,[4][5] until 2021,[6] followed by 8,000 from 2022 onwards.[7][8][9][10]

See also

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References

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  1. ^ a b "James Howells searches for hard drive with £4m-worth of bitcoins stored". BBC News. 28 November 2013. Archived from the original on 27 November 2024. Retrieved 22 November 2024.
  2. ^ a b c d e f Hern, Alex (27 November 2013). "Missing: hard drive containing Bitcoins worth £4m in Newport landfill site". The Guardian. ISSN 0261-3077. Retrieved 22 November 2024.
  3. ^ Smith, Alexander (29 November 2013). "IT worker throws out hard drive, loses $7.5 million Bitcoin fortune". NBC News. Retrieved 25 November 2024.
  4. ^ a b Carter, Shawn M. (20 December 2017). "Man accidentally threw away $127 million in bitcoin and officials won't allow a search". CNBC. Archived from the original on 30 November 2024. Retrieved 22 November 2024.
  5. ^ a b c d e f g Kobie, Nicole (1 December 2017). "This man's lost bitcoin are now worth $75m – and under 200,000 tonnes of garbage". Wired. ISSN 1059-1028. Archived from the original on 20 September 2024. Retrieved 22 November 2024.
  6. ^ "Bitcoin: Newport man's plea to find £210m hard drive in tip". BBC News. 14 January 2021. Archived from the original on 3 December 2024. Retrieved 25 November 2024.
  7. ^ a b c d Morris, Chris (1 August 2022). "The Welshman who accidentally threw out 8,000 Bitcoin in 2013 is mounting an $11 million campaign to get it back". Fortune. Archived from the original on 10 March 2024. Retrieved 24 November 2024.
  8. ^ a b c Middleton, Joe (2 August 2022). "Man who threw away £150m in bitcoin hopes AI and robot dogs will get it back". The Guardian. ISSN 0261-3077. Retrieved 24 November 2024.
  9. ^ a b c d Hamilton, Isobel Asher (24 July 2022). "The quest to find $181 million in bitcoin buried in a dump". Business Insider. Archived from the original on 2 December 2024. Retrieved 24 November 2024.
  10. ^ Bevan, Nathan (3 November 2023). "Newport: Can AI help find lost £227m Bitcoin fortune?". BBC News. Retrieved 25 November 2024.
  11. ^ a b c d e f g h i j k l m n o p q Max, D. T. (6 December 2021). "Half a Billion in Bitcoin, Lost in the Dump". The New Yorker. ISSN 0028-792X. Archived from the original on 23 November 2024. Retrieved 23 November 2024.
  12. ^ Nakamoto, Satoshi (31 October 2008). "Bitcoin: A Peer-to-Peer Electronic Cash System" (PDF). Archived from the original (PDF) on 4 July 2010. Retrieved 20 December 2012.
  13. ^ Wallace, Benjamin (23 November 2011). "The Rise and Fall of Bitcoin". Wired. Archived from the original on 31 October 2013. Retrieved 13 October 2012.
  14. ^ A History of Bitcoin. Archived 1 June 2018 at the Wayback Machine Monetary Economics: International Financial Flows, Financial Crises, Regulation & Supervision eJournal. Social Science Research Network (SSRN). Accessed 8 January 2018.
  15. ^ Little, Darren (28 November 2013). "Bitcoin Blunder Man Throws Away '£4m Laptop'". Sky News. Archived from the original on 6 November 2023. Retrieved 22 November 2024.
  16. ^ a b Humphries, Will (14 January 2021). "IT worker offers council £50m to let him search tip for bitcoin hard drive". The Times. Archived from the original on 23 November 2024. Retrieved 23 November 2024.
  17. ^ Leston, Ryan (19 November 2024). "Bitcoin: Newport man says binned hard drive now worth £569m". BBC News. Archived from the original on 22 November 2024. Retrieved 23 November 2024.
  18. ^ a b c d e f Boggan, Steve (22 January 2023). "How I accidentally threw away £107 million in bitcoin". The Times. Archived from the original on 24 November 2024. Retrieved 24 November 2024.
  19. ^ a b Paul, James (28 November 2024). "Ex-Girlfriend Accidentally Disposed Rs 6,000 Cr Worth Bitcoin In Landfill Decade Ago; Man In Legal Battle To Dig Site". Mashable India. Retrieved 28 November 2024.
  20. ^ a b c Barr, Kyle (25 July 2022). "Bitcoin Dumpster Guy Has a Wild Plan to Rescue Millions in Crypto From a Landfill". Gizmodo. Archived from the original on 10 June 2023. Retrieved 24 November 2024.
  21. ^ Hughes, Marcus (14 January 2021). "Man who binned Bitcoin worth £230m wants to give away 25% if found". Wales Online. Archived from the original on 10 December 2023. Retrieved 25 November 2024.
  22. ^ a b c d Molloy, Mark (3 December 2017). "The unlucky man who accidentally threw away bitcoin worth $100 million". The Telegraph. ISSN 0307-1235. Archived from the original on 9 October 2024. Retrieved 22 November 2024.
  23. ^ Verma, Aniket (28 November 2024). "Remember James Howells Who Lost His Hard Drive With 8,000 Bitcoins Now Worth $760M? His Ex-Girlfriend Reveals It Was She Who Threw It Away". Benzinga. Archived from the original on 28 November 2024. Retrieved 28 November 2024.
  24. ^ Sharma, Dikshant (27 November 2024). "Wales man fights to recover $ 710 million worth of bitcoin thrown in garbage dump by ex-girlfriend". WION. Retrieved 28 November 2024.
  25. ^ a b Harrison, Virginia (29 November 2013). "U.K. tech worker dumps hard drive with bitcoins worth $9 million". CNNMoney. Archived from the original on 2 October 2024. Retrieved 22 November 2024.
  26. ^ a b c d e f g Parekh, Marcus (2 August 2022). "I'll spend £10m to get my Bitcoin back from tip, IT worker tells council". The Telegraph. ISSN 0307-1235. Archived from the original on 2 August 2022. Retrieved 24 November 2024.
  27. ^ a b Leston, Ryan (19 November 2024). "Bitcoin: Newport man says binned hard drive now worth £569m". BBC News. Archived from the original on 22 November 2024. Retrieved 24 November 2024.
  28. ^ a b c d Kolirin, Lianne (15 January 2021). "Man who accidentally threw out a bitcoin fortune offers $70 million to dig it up". CNN. Retrieved 23 November 2024.
  29. ^ a b c Morris, Steven (14 January 2021). "Man offers Newport council £50m if it helps find bitcoins in landfill". The Guardian. ISSN 0261-3077. Retrieved 23 November 2024.
  30. ^ Browne, Ryan (15 January 2021). "Man makes last-ditch effort to recover $280 million in bitcoin he accidentally threw out". CNBC. Archived from the original on 6 December 2024. Retrieved 23 November 2024.
  31. ^ a b Ross, Madeleine (8 September 2023). "Bitcoin investor who lost £164m in landfill to sue local council". The Telegraph. ISSN 0307-1235. Archived from the original on 8 September 2023. Retrieved 24 November 2024.
  32. ^ Middleton, Joe (7 November 2023). "Robot dogs, AI and the plan to retrieve £165m crypto fortune lost in rubbish dump". The Independent. Archived from the original on 8 December 2024. Retrieved 24 November 2024.
  33. ^ a b Gogarty, Conor (12 October 2024). "'I'm suing the council for £495m because they won't give me back my bin bag'". Wales Online. Archived from the original on 23 November 2024. Retrieved 24 November 2024.
  34. ^ a b c Pringle, Eleanor (21 November 2024). "Crypto miner fights to retrieve $749M Bitcoin fortune 'accidentally thrown in landfill'". Fortune. Archived from the original on 22 November 2024. Retrieved 22 November 2024.
  35. ^ a b Thomas, Huw (3 December 2024). "Bitcoin man sues Newport council over '£600m fortune lost in tip'". BBC News. Archived from the original on 3 December 2024. Retrieved 5 December 2024.
  36. ^ a b Morris, Steven (3 December 2024). "Man has 'finely tuned' plan to find £500m bitcoin thrown in tip, Cardiff court told". The Guardian. ISSN 0261-3077. Retrieved 5 December 2024.
  37. ^ Sinclair, Sebastian (21 November 2024). "Bitcoin Price Blasts Past $97,000 as Futures Hint at More Room to Run". Decrypt. Archived from the original on 21 November 2024. Retrieved 25 November 2024.
  38. ^ Beganski, André (14 October 2024). "British Man Demands He Be Allowed to Dig Through Trash to Find $500 Million in Bitcoin". Decrypt. Retrieved 24 November 2024.
  39. ^ Portillo, Sam (2 November 2023). "Bitcoin treasure hunter's legal fight to get in Newport landfill". South Wales Argus. Archived from the original on 21 November 2024. Retrieved 24 November 2024.
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