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Bitcoin buried in Newport landfill

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Docksway landfill, pictured in 2007. Located in Newport, Wales, it is the location of the hard drive containing Bitcoin that was buried in 2013.

In mid-2013, James Howells disposed of a laptop hard drive containing the private keys for 8,000 Bitcoin,[a] and has repeatedly requested that Newport City Council allow him to search for the device. Buried in Docksway landfill, Newport, Wales, Howells has been refused permission to search for the device by the council.

Over the years Howells assembled a team of specialists and secured funding for such an excavation, with the council refusing permission citing the cost and environmental impact of such an excavation, as well as legislation. He has offered the council 30% of the proceedings from the coins if found, as well as distributing funds among the population of Newport. As of November 2024, the missing Bitcoins were worth $750 million and Howells sued the council for £495 million, with the council arguing that the device is now their property.

The attempts to recover the missing Bitcoin has been described as a digital treasure hunt, with Howells and his team confident that retrieval of the data remains possible, while the council remains sceptical.

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 protocol being implemented as a peer-to-peer network in January 2009.[13] It is a digital currency that uses cryptography to verify blockchain transactions and record them in a public ledger,[11] that has grown in significance over the years.[14]

James Howells

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Howells lives in Newport and has three children with his partner Hafina. Influenced by his mother who was involved in the production of microchips, he become a regular Internet user in his teens, building computers from the age of 13, and later a Napster user around the time of Bitcoin's inception.[11][15]

Working various IT jobs he learnt about encryption when working on Bowman communications system, and learnt about Bitcoin in December 2008, prior to studying the concept a month later.[15] After the 2008 bank bailout, Howells considered fiat currencies to be scams and instead favoured the vision of Bitcoin inventor Satoshi Nakamoto, becoming an early adopter of the technology in 2009.[11]

In 2021, he worked from home maintaining emergency-response systems in Wales.[11] A year later, he described himself as a project manager within cryptocurrency and blockchain.[16]

Overview

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Early Bitcoin mining

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Logarithmic mining difficulty chart of Bitcoin, showing the ease of mining in 2009 when Howells started mining.[17]
Further information: Bitcoin mining

On February 15 2009,[15] James Howells, a Welsh computer engineer from Newport,[18][19][20] started mining Bitcoin with a Dell XPS laptop.[5][2] According to Howells, he mined 400–800 Bitcoin intermittently overnight for two months,[15] which subsequently caused the device to overhead.[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 later considered Howells to be one of the earliest miners on the Bitcoin network,[21] with The New Yorker 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 disposed of the encrypted hard drive,[5][2] mistaking one device for another,[19] that contained the cryptographic private keys for 8,000 Bitcoin,[a][16][7][9] valued at £500,000 at the time of disposal.[2][21]

By November 2013, the device was valued at £4 million located approximately three to five feet underground in Docksway landfill, Newport, South Wales,[1] after Howells partner had taken the trash with the hard drive to the tip.[11][15] At the time, he had accepted that the coins were lost.[2] According to Newport City Council, the hard drive would be "buried under 25,000 cubic meters of waste and earth",[22] weighing approximately 110,000–200,000 tonnes,[5][7][23] with CNN reporting the challenge in finding the device as near to impossible.[22]

The former manager of the landfill site has stated that the device is located in a 15,000 tonne section named Cell 2, where waste had been buried between August and November 2013.[15] The site holds 1.4 million tonnes of waste in total.[24]

Search attempts

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Logarithmic chart of Bitcoins price from 2011–2019, showing the increase in value of the hard drive since it was disposed of. Howells has escalated attempts to try and retrieve the device since 2017 as the value increased.[11]

In December 2017, Wired reported that Howells had been refused permission to search for the hard drive by Newport City Council. According to Howells, the search would involve the first case of excavating a landfill site in the United Kingdom, unrelated to a criminal investigation. The council cited concerns over costs, the environmental impact, galvanic corrosion the device would likely have suffered, and additionally noted that potential "treasure hunters" arriving at the landfill site would be 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, having repeatedly requested access to search for the device, Howells offered the council 25% of the proceedings then valued at approximately £200 million.[11] His offer was for the donation of £52.5 million ($71.7 million) to the council to go to the 316,000 population of Newport, that would equal £175 per person,[25] Howells was refused with the council claiming it would breach licensing regulations.[25] His belief was that the drive would be in functional conditions due to the protective casing,[26] and because the glass disk was coated in an anti-corrosive cobalt layer.[11]

According to Howells, he gained financial backing from a hedge fund, who would take 50% of the proceedings;[25] and would be able to identify the location based on council waste records,[26] followed by using data recovery specialists to recover the Bitcoin.[25] The council estimated that the cost for such excavation would cost millions of pounds,[26][27] with Howells budgeting £5 million for the operation taking 9–12 months.[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.

Newport City Council,
2 August 2022[23]

In August 2022, Howells expanded his search plan to include the use of artificial intelligence; featuring a mechanical arm to scan waste, drones, and Boston Dynamics robotic dogs for security while excavating, as well as recruiting an AI specialist and an environmental team to the project.[16][23][8] His team included eight experts in landfill excavation, including a data recovery advisor who helped recover the black box from the Space Shuttle Columbia disaster, with an increased budget of £10–11 million from venture capitalists, who along with Howells would retain 30% of the proceedings.[7][23] His new time-frame estimates for the retrieval of the device were between 18 months and 3 years, costing between $6 and $11 million respectively.[9]

Howells also stated his intent to develop a community-owned mining facility on the landfill site with the proceedings,[8] based on solar or wind power,[23] That year, Richard Hammond produced a short documentary on the quest to retrieve the drive involving the recovery team, and by September 2023, the team had doubled in size.[28]

Litigation

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On 6 September 2023, Howells legal team published an open letter to Newport City Council with his intention to sue, in attempt to prevent future works on the site, while seeking £446 million in damages and a judicial review of the councils decision to refuse access to the site.[28] His legal team again wrote to the council two months later requesting access to the site, prior to pursing a case in court.[29]

By October 2024, the contents of the hard drive were worth $750 million and Howells sued the council for £495 million,[24][30] setting a date for a commerce court in Cardiff on 3 December 2024, arguing that he has intellectual property rights among other claims.[31] According to Wales Online, he is being represented by the team of barristers that have represented some of the alleged victims against Mohamed Al-Fayed. The council have argued that they legally own the device as the property was deposited to the site, with Howells' barristers denying such claim based on intent.[30]

Opinion

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Howells has stated that had he had access, he would have sold 30–40% of the Bitcoin in 2013, speculating that reaching $100,000 would be a "conservative figure" for the cryptocurrency. In 2017 his interests were focused on Bitcoin Cash and Ethereum,[5] while anticipating that the value of Bitcoin on the hard drive would rise to between $500 million and $1 billion, describing cryptocurrencies as the "new gold, oil and water combined".[21] In 2024, approximately seven years later, the value of the hard drive reached $749 million,[31] as the Bitcoin price reached $97,000.[32]

In 2017 Howells believed that the chances of retrieving the device increased as the value increased.[21] In 2020 analytics firm Chainalysis estimated that the buried Bitcoin is part of 3.7 million, of a total of 21 million, that has been lost.[33] In 2022 while acknowledging that the device was "a needle in a haystack" and that the investment from venture capitlaists was extremely high-risk,[23] Howells remained 80–90% confident in successfully recovering the hard drive data.[23] The attempts to recover the device has been described as a digital treasure hunt.[9][31][34]

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]

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. 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. 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. 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. 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. 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 Max, D. T. (6 December 2021). "Half a Billion in Bitcoin, Lost in the Dump". The New Yorker. ISSN 0028-792X. 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. Monetary Economics: International Financial Flows, Financial Crises, Regulation & Supervision eJournal. Social Science Research Network (SSRN). Accessed 8 January 2018.
  15. ^ 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.
  16. ^ a b c Barr, Kyle (25 July 2022). "Bitcoin Dumpster Guy Has a Wild Plan to Rescue Millions in Crypto From a Landfill". Gizmodo. Retrieved 24 November 2024.
  17. ^ Hughes, Marcus (14 January 2021). "Man who binned Bitcoin worth £230m wants to give away 25% if found". Wales Online. Retrieved 25 November 2024.
  18. ^ Little, Darren (28 November 2013). "Bitcoin Blunder Man Throws Away '£4m Laptop'". Sky News. Retrieved 22 November 2024.
  19. ^ 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.
  20. ^ Leston, Ryan (19 November 2024). "Bitcoin: Newport man says binned hard drive now worth £569m". BBC News. Retrieved 23 November 2024.
  21. ^ 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.
  22. ^ a b Harrison, Virginia (29 November 2013). "U.K. tech worker dumps hard drive with bitcoins worth $9 million". CNNMoney. Retrieved 22 November 2024.
  23. ^ 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.
  24. ^ a b Leston, Ryan (19 November 2024). "Bitcoin: Newport man says binned hard drive now worth £569m". BBC News. Retrieved 24 November 2024.
  25. ^ 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.
  26. ^ 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.
  27. ^ Browne, Ryan (15 January 2021). "Man makes last-ditch effort to recover $280 million in bitcoin he accidentally threw out". CNBC. Retrieved 23 November 2024.
  28. ^ 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.
  29. ^ Middleton, Joe (7 November 2023). "Robot dogs, AI and the plan to retrieve £165m crypto fortune lost in rubbish dump". The Independent. Retrieved 24 November 2024.
  30. ^ 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. Retrieved 24 November 2024.
  31. ^ a b c Pringle, Eleanor (21 November 2024). "Crypto miner fights to retrieve $749M Bitcoin fortune 'accidentally thrown in landfill'". Fortune. Retrieved 22 November 2024.
  32. ^ Sinclair, Sebastian (21 November 2024). "Bitcoin Price Blasts Past $97,000 as Futures Hint at More Room to Run". Decrypt. Retrieved 25 November 2024.
  33. ^ 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.
  34. ^ Portillo, Sam (2 November 2023). "Bitcoin treasure hunter's legal fight to get in Newport landfill". South Wales Argus. Retrieved 24 November 2024.
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