In theory he is extremely rich, but the Welshman James Howells made a momentous decision in 2013: Back then, he threw a hard drive with 7,500 Bitcoins in the trash. He was convinced that he had made a backup – but that was not the case. In 2013, the crypto currency was only known to a small group, but that has changed fundamentally: Its Bitcoins would be worth around 230 million euros today.
Now he has offered the administration of his hometown Newport in Wales the equivalent of around 66 million euros, which will be distributed to the population if he can find his hard drive and restore the bitcoins. With around 300,000 inhabitants, it would be around 200 euros per person.
Welshman wants to dig for hard drive with 7,500 bitcoins
He already had a plan for this: Howells wanted to excavate a certain area of the local landfill using a grid system and recover the hard drive in this way. “All safety and environmental standards should be adhered to,” he says to the US broadcaster CNN.
If this process were successful, he would give a quarter of the sum to the city and half to investors who finance an excavation. He wanted to keep the rest. But the city rejects his application. “The cost of digging the landfill, storing and treating the waste could run into millions with no guarantee that the hard drive will be found or still functional,” a spokeswoman told CNN. In addition, an excavation is too high a burden for the environment.
Bitcoin: Wallet Recovery Services tries to crack passwords
Even if Howells is convinced that he can restore his Bitcoins, that is far from certain. If you lose your password, you can turn to services such as Wallet Recovery Services. The company tries – with the permission of the owner – to crack the password of its customer.
It could be an expensive proposition: If successful, the company charges up to 20 percent of the wallet value for its services, which can sometimes take months. According to the Wall Street Journal, the success rate in 2018 was around 30 percent.
In fact, the online forum provider Reddit has some entries from allegedly successful restores by Wallet Recovery Systems, which communicates with its customers under the pseudonym Dave Bitcoin.
Bitcoin: Programmer misplaces $ 220 million password
Stefan Thomas, who comes from Germany, faces the same problem. He only has two tries left to guess the forgotten password of a Bitcoin fortune that is currently worth more than $ 200 million. With the right password, Stefan Thomas could access a hard drive that contains the keys to his digital Bitcoin wallet, where 7002 Bitcoins are stored.
According to a report in the “New York Times”, the German received it in 2011 as payment for a video about the digital currency when it was still worth a few euros each. But ten years later, one Bitcoin is worth around 30,000 euros and Thomas is rich – at least theoretically, he too.
Because the programmer ignored the Bitcoins for years and lost the paper on which he had written the password for the hard drive. He has already entered the wrong password eight times – on the tenth failure, the hard drive is encrypted forever. He often lay awake and thought about the password and then he was desperate again after each failed attempt, he reported.
There is a clear difference here compared to a forgotten password on the Internet, which protects your own accounts on different pages. One click on the “Forgot password” button and the problem is usually resolved within a few minutes.
However, numerous Bitcoin owners, often those from the very beginning when this digital currency was still in its infancy, have the problem of no longer having passwords from old custodians. Bitcoins are stored on USB sticks or external hard drives, for example, and given a password. The problem: If the password is gone, you no longer have access to your digital money.
20 percent of all available bitcoins are considered lost
Overall, of the currently almost 19 million Bitcoins available, around 20 percent are considered lost. The value: around 140 billion US dollars, which corresponds to around 116 billion euros. The cryptocurrency data company Cainalysis has analyzed this, as the US newspaper “New York Times” writes.
According to this, Wallet Recovery Services, which specializes in restoring old passwords, receives 70 requests per day. That’s three times as many as last month. Often there are owners who have been using the digital currency for years. The hard drive ends up in some drawer and the password for it cannot be found.
The fact that nobody can help when bitcoins are slumbering on old hard drives for which there is no longer a password is ultimately the idea behind the crypto currencies. A decentralized currency without control by an authority is the unique selling point, which is why Bitcoin has so many fans. There can be no inflation because no one can increase the value of the limited amount of 21 million Bitcoins. But: In the event of a loss, that unique selling point can be the problem.