11 years and counting, with over $880 million at stake.
Losing access to your private keys for your Bitcoin wallet.
It’s one of the most harrowing experiences for any Bitcoin investor, especially during the days when you could mine 25 to 50 BTC per block reward on a CPU, back when it was billions of times less energy-intensive than using ASIC miners.
Unfortunately for a Welsh man, he’s still having to cope with this loss.
James Howells accidentally discarded an encrypted hard drive containing 8,000 BTC in 2013.
Back then, it was chump change (at least in early 2013), akin to when Laszlo Hanyecz dropped 10,000 BTC, approximately $41 in May 2010, on two pizzas.
Many of you have likely heard the story on and off, so I’ll stick to more recent and significant details.
Drastic measures
In January 2021, he offered $70 million to the council, despite his unreachable Bitcoin stash being valued at $235 million.
He’s constantly pleaded with the local government, Newport City Council, to access the landfill, but they continue to reject these requests and generous financial offers, citing environmental impacts and costs.
After being unable to convince the council to give him and his team a chance to find it, he has taken NCC to court and is attempting to sue them for their repeated failure to do so.
However, it reportedly claims that the hard drive is now its property and doubts whether Howells and his team will ever be able to recover the funds.
This matter even reached the High Court of England and Wales, the third-highest court in the UK.
Judge Keyser KC, who oversaw the case, was also sceptical of Howell’s conviction in successfully finding the hard drive.
Here is an excerpt from the case’s conclusion (Paragraph 55):
“I consider that the particulars of claim do not show any reasonable grounds for bringing this case. I also consider that the claim would have no realistic prospect of succeeding if it went to trial and that there is no other compelling reason why it should be disposed of at trial….There will be judgment for the defendant (Newport City Council) and the claim will be dismissed.”
Howells v Newport City Council [2025] EWHC 22 (Ch) (09 January 2025).
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If he’s willing to minimise environmental impacts, fully cover all the costs of excavating the site, and return it to its previous condition, regardless of whether he finds the hard drive, I say let him do it.
However, in most parts of the world, good luck trying to get things done when excessive bureaucracy is involved, not to mention negotiating with individuals who have little to no understanding of Bitcoin, and are probably tired of hearing about it at this point.
If a local council refuses to budge by repeatedly denying access, he did what most forward-thinking people would do: buy the site.
Unfortunately, NCC has still turned down his offer to buy the site, despite stating that he’d distribute 30% of the BTC proceeds to the council and the city’s population if he received clearance to excavate the site.
In January 2021, he offered $70 million to the council, despite his unreachable Bitcoin stash being valued at $235 million.
As the landfill is scheduled to close permanently within the next 12 to 15 months, and BTC shows no signs of slowing down, expect increased attempts to seek approval to enter the facility, as well as further publicity about this story as Bitcoin’s price continues to rise.
A small consolation
While it remains a heartbreaking experience (let’s be honest, we’d all go insane if we were in the same situation), LEBUL, an LA-based production company, has exclusive rights to create and produce a docuseries titled “The Buried Bitcoin.”
Howells, a.k.a. @howelzy, tweeted this information on April 30, so keep an eye out for a trailer in the coming months.
https://x.com/howelzy/status/1917255724960186634
He will likely receive an undisclosed amount of money or BTC in exchange for his story, as well as ongoing earnings through media appearances and interviews.
Let’s not forget about a book while we’re at it.
It’s something, but nothing like finding the hard drive miraculously and somehow accessing the file containing the Bitcoin private keys.
Additional thoughts
While it’s been a fascinating saga, the reality is that the hard drive has most likely been destroyed after 12 years of several tonnes of residential and commercial waste piling up on it, not to mention all of the nasty liquids leaching out of the contents.
But data-recovery experts have managed to extract files from damaged drives.
Considering how much is at stake, you bet he’d hire the best team for the job.
But there’s a bigger issue at play: finding the damn thing.
As reported in The Block, the odds of Howells finding the discarded drive among all that waste are 1 in 902,000,000.
It’s a timely reminder to ensure that you:
– Don’t have all of your crypto in one place, unless it’s in a top-notch safe with multiple, thoroughly checked backups of your recovery seed. Even then, consider using a second non-custodial wallet; it’s not difficult.
– Opt for a hardware wallet containing Secure Element chips, which make them far less prone to tampering in the event of physical theft. Most reputable options feature this technology, including Trezor’s latest models, the Safe 3 and Safe 5.
– Never have a significant amount of crypto on a single crypto exchange. If you don’t feel comfortable managing private keys and prefer to deal predominantly with self-custody, as a bare minimum, you should split your digital assets between three or four regulated and established custodial services.
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There is another thought that many people disregard.
Considering that he has known about the BTC wallet balance for years, this begs the question: how much profit would he have actually made from his holdings?
In other words, at what price point(s) would he have chosen to cash out his Bitcoin?
It’s the same question I have for those who have cried on social media, saying they could have made $100 million or a billion dollars if they still owned the assets.
Let’s not be naive here; almost everyone would have converted significant sums to fiat, likely to buy property, luxury goods, or pay for holidays, and so on, well before an asset’s peak.
Very few people, for example, Michael Saylor, who has reminded his followers to “never sell your Bitcoin”, will religiously stick to this mantra.
On this note, and to wrap up, I have a few questions for you:
At what price points do you plan to sell your Bitcoin?
What percentage would you offload?
Will Howells ever find a way to regain access to the 8,000 BTC?
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You might also be interested in these stories:
https://medium.com/@cryptowithlorenzo/why-most-arent-ready-for-what-s-coming-with-bitcoin-5064345783ca
https://medium.com/@cryptowithlorenzo/bitcoin-is-going-to-zero-5562122f5481
Disclaimers
- N.B. None of this is financial advice; I am not a financial advisor. This information is for educational purposes only. You are ultimately responsible for your investments.
- My opinions in this piece might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
Image by Tashik at Freepik (AI-generated image).