Infamous Discarded Hard Drive Holding 7,500 Bitcoins Would be Worth $80 Million Today

Old timers remember the story of a Welsh man who threw away a hard drive containing 7,500 Bitcoins. That lost drive would be worth over $80 mln today.

During the summer of 2013, while cleaning out his desk, a Welsh man named James Howells threw away a hard drive from his broken Dell Laptop.

Unfortunately, he realized several months later that the drive held 7,500 Bitcoin mined back in 2009. At the time, with Bitcoin approaching and finally just exceeding $1,000 in price, the scrapped hard drive would have been worth over $7 mln.

The story created a lot of hype about the rising the value of Bitcoin and the fortunes – or misfortunes – of the currency’s first miners and investors. Many of them had dabbled with the currency while it was in its infancy, only to forget about it and fail to backup their wallets.

Howells, who essentially dumped $7.5 mln (£4 mln) onto a landfill in Newport, Wales was of course furious, disappointed and dumbstruck. Over the next few years, he may have come to terms with his loss, only to have old wounds reopened as the currency began its long climb this year. At press time, Bitcoin’s price stands at $10,700, giving that trashed hard drive a value of over $80 mln.

‘That’s a bad idea’

Howell had mined those 7,500 coins himself as a hobby back when Bitcoin was a mere plaything for the technologically inclined. Howells related:

"You know when you put something in the bin, and in your head, say to yourself 'that's a bad idea'? I really did have that.”

Howells explains how he stopped mining when his girlfriend complained about the noise from the laptop and the heat it was producing. When he spilled lemonade on the laptop the following year, he dismantled it for parts. He initially kept the hard drive for a few years before finally discarding it.

Back in 2013, Howells said:

"I'm at the point where it's either laugh about it or cry about it. Why aren't I out there with a shovel now? I think I'm just resigned to never being able to find it."

Once can only imagine how the unfortunate Howells feels today.

“Don’t tell my Wife”

Howells isn’t the only person to experience the pain of such financial loss. An Australian man, who wishes to remain anonymous for fear of the wrath of his wife, has also come forward with a tale of thousands of missing Bitcoin.

Alex, as he wants to be called, describes how in 2009 he mined “thousands, plural” of Bitcoin as part of a novel new idea. Then when the program for mining got a little too big and cumbersome, he gave up, deleted the program, and stashed his Bitcoin on a cheap USB. He said:

“The thinking was that it’s offline, not on my PC, so in case something bad happened to the PC — [if] it blew up, or [was] hacked — I still had a backup.”

Around the end of 2013, when the Bitcoin price peaked at just over $1,000, he suddenly remembered his wallet:

“[I plugged] the USB stick back in to try and access the file, but the stick died. It was one of those cheap made-in-China ones.”

Just like Howells, Alex has had to watch the Bitcoin price balloon, counting the tens of millions of dollars he lost everytime a new milestone is reached.

“Worst mistake of my life. Never back up anything on a cheap Chinese-made disk or USB stick.”

Lost forever

Other stories of lost Bitcoins abound, including that of a Gizmodo editor who threw away a hard drive containing 1,400 Bitcoins in 2012. He paid $25 for the coins, at an average price of only 1.5 cents each. They would now be worth almost $15 mln.

These cases and others inspired a new study that has estimated that as many as four million Bitcoin are gone forever. The study puts the majority of the lost coins in the category of ‘out of circulation’ as of course, those coins still exist on the Blockchain, they just cannot be accessed.

One difficulty in estimating the number of “lost” Bitcoin is uncertainty over whether Satoshi is still alive and still has access to his private keys. The study’s numbers assume that Satoshi’s approximately one million Bitcoins are lost, but of course, nobody can be certain of that.

Keeping coins safe

One of the first rules for Bitcoin newbies is to keep your coins off exchanges where they are vulnerable to online threats. However, there are a number of offline threats that can also occur.

These two case studies show just how easy it is to lose a digital asset that is not stored online; from a broken hard drive to a corrupt USB, even misplacing the thing becomes a problem.

Matthew Unger, founder and CEO of iComply Investor Services Inc. suggested:

"Just like you keep some cash in your wallet, some in your bank account and perhaps the really valuable stuff in a safe, you need to manage digital currencies in the same way."

Source: Coin Telegraph




My current recommendations:

HashFlare for automated Bitcoin cloud mining - Currently ROI in around 60 days only

Bitclub Network allows you to buy mining shares with daily payouts

CCG Mining now offers open end contracts. Bitcoin, Ethereum, Zcash, Litecoin and others

Cointracking keeps track of all your coins automatically. Many exchanges and wallets supported

 

Bitcoin Revolution and The Great Central Bank Divide

Just like there are varying opinions on Wall Street, so are there in the global central banks.

So long have the central banks across the globe held a massive monopoly over the most important resource, money. They have built their rules and shaped their fortunes, but now, there is an upstart digital currency challenging all this, and no one is really sure of how to handle it.

The emergence of Bitcoin as a real player, a real threat, has caused many to take sides. From the Wall Street Banks who are either in Jamie Dimon’s corner or the other more accepting side, Bitcoin divides thoughts.

Central banks are big players when it comes to shaping the global economy, and they have had to make their own minds up when it comes to Bitcoin. But it is not only Bitcoin that they are considering, there is also talk of “Why not us?” as many of them look to create their own version of Bitcoin.

US: “But how will we monitor you?”

The over-eyeing US has a problem when it comes to Bitcoin because the digital currency offers up much more anonymity when it comes to transactions. The central banks are thus a little concerned with the privacy issues these digital currencies bring. Overall, the US central bank has not been overly enthused about the whole thing as they have already had problems with tax avoidance.

Jerome Powell, a board member for the Federal Reserve said:

“There are meaningful challenges to a central bank cryptocurrency, but it is the privacy issues that would be the problem, perhaps private-sector alternatives are the answer.”

Europe: “The land of Tulips”

In general, Europe, having lived through Tulip Mania in the Netherlands, are of the opinion that the Bitcoin Craze is just one big Tulip-shaped bubble, issuing a warning to that effect. Vice-President, Vitor Constancio, of the European Central Bank has said: “Bitcoin is a sort of tulip,” Constancio said at an ECB conference. “It’s an instrument of speculation … but certainly not a currency and we don’t see it as a threat to central bank policy.”

As such, the European Central Bank approach is that Bitcoin is no threat to their monopoly with the Euro – quite a one-eyed view to have.

China: “We can make this work for us”

China is one of the few major nations to take a hard stance – either way – when it comes to digital currencies. They have not been that keen on the big one, Bitcoin, and have rather decided to try and get that out of their system. Rather, China’s central bank is building a situation where they can try and launch their own digital currency to try and keep money within their boundaries.

“The development of digital economy needs central bank-issued electronic currency more than ever,” Yao Qian, who leads the research at the People’s Bank of China (PBOC), said. “It’s crucial to speed up the research and issuance.”

Japan: “Let’s see how this plays out”

Japan has never been hostile to Bitcoin at all, but there has never really welcomed it with open arms. They have been in waiting for some time now, letting the ecosystem grow and develop into something that they can actually monitor. Now that Bitcoin and other cryptocurrencies are getting legs, and there is more deeper understanding. Japan has even gone as far as to suggest some big changes, but they have not dived in yet – such as the J-coin.

"This will be pegged with Japanese Yen, and hopefully used to make payments and transfers through a mobile phone app," a spokesperson from Mizuho Financial Group, one of the institutions spearheading the move, said.

India: “No thanks”

India’s biggest fear is that digital currencies are full of potential for money laundering and terrorist funding, this has caused the central banking authority in India to retract away from any dealings with Bitcoin, or in fact, even thinking about creating their own. However, when it comes to the utilizing the coins, the country is not adverse to its citizens using it.

According to the Central Bank’s Executive Director Sudarshan Sen:

"As regards non-fiat cryptocurrencies, I think we are not comfortable. Bitcoins for example. That's a private cryptocurrency. Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely.”

UK: Viva la Revolution

While the UK has never really written the headlines for cryptocurrencies, it has a very positive approach to the digital side of things.

The central bank in the UK has cited digital currencies as a financial revolution.

Bank of England Governor Mark Carney has cited cryptocurrencies as part of a potential “revolution” in finance.

Source: Coin Telegraph




My current recommendations:

HashFlare for automated Bitcoin cloud mining - Currently ROI in around 60 days only

Bitclub Network allows you to buy mining shares with daily payouts

CCG Mining now offers open end contracts. Bitcoin, Ethereum, Zcash, Litecoin and others

Cointracking keeps track of all your coins automatically. Many exchanges and wallets supported