The British man's girlfriend accidentally threw away his hard drive containing nearly 8,000 bitcoins in 2013. Years of a legal battle for the right to retrieve the disk from the landfill came to nothing. These and four other stories remind us to treat our crypto assets with caution.
How Not to Get Rid of Bitcoin: The Case of James Howells
The story of an IT worker in Wales whose hard drive containing thousands of bitcoins ended up in a landfill has been circulating in the media for years. All this time, he had been trying in vain to reach the dump where his treasures lay in peace, and it seemed that on January 9, 2025, the case came to a grim end.
Newport local James Howells was introduced to Bitcoin around 2009 and tried mining for a while before completely forgetting about the cryptocurrency for several years. At some point, he spilled liquids on his computer, so he took it apart, keeping his hard drive. The disk allegedly contained a private key to Howells' Bitcoin wallet. In 2013, his then-girlfriend, Halvina Eddie Evans, accidentally threw away a hard drive.
Here's what Eddie Evans He said Daily Mail in an exclusive interview:
"The computer part had been disposed of in a black bag with other unwanted belongings, and he begged me to take it out, saying, 'There's a trash bag here that needs to be taken to the curb.'"
I had no idea what was in it but I reluctantly dropped it off at the local party on my way home from school... I thought he should take care of his duties, not me, but I did it to help... The loss wasn't my fault.
After a while, Howells realized that the approximately 8,000 Bitcoins he had mined in the past were worth millions. He tried to find the valuable disk but failed. After some sort of investigation, he came to the conclusion that the hard drive containing the private key was located somewhere in the Docksway landfill in Wales. The weight of waste in this landfill is estimated at more than 1.4 million tons.
Howells, accompanied by a team of specialists, developed plans to excavate the site. Although Howells planned to pay for the operation himself and donate 25% or 30% to the Newport City Council and local residents, officials refused to let him, citing environmental impact. The site inspection could have led to fires and the release of toxic gases.
Howells filed a lawsuit against the Newport City Council. In his ultimatum, he demanded permission to inspect the waste dump or compensation worth 495 million pounds sterling. On January 9, 2025, it was I mentioned The Supreme Court rejected the case because there were no realistic prospects for success.
At the time, the total cost of Howells' bitcoins was estimated at $750 million. However, the success of the site search is questionable. What are the chances that the hard drive in question is still working? What are the odds of it being found in the Docksway landfill? Does this disc even exist? Why did Howells and Halivina split? Lots of questions.
The Iron Key on My Back: The Stefan Thomas Case
The case of Stefan Thomas is another well-known nightmare in the cryptocurrency community. An American programmer of German origin, who was paid in Bitcoin for creating animations Tutorial video About Bitcoin in 2011. Thomas decided to store a reasonable reward of 7002 BTC (!) on a USB hardware wallet, IronKey (about $5.3 thousand at the time).
Hardware wallets are widely known as the most secure way to store bitcoins. The problem is that Thomas lost the paper with the password on it, and the IronKey is programmed to lock the coins forever after ten incorrect password entries. A millionaire, on paper at least, Thomas did everything he could and more to crack the strange code. He hired cryptographic experts. He even resorted to hypnosis. After eight attempts out of ten, nothing helped. Fortunately, in 2012, Thomas started working at Ripple and has made a lot of cryptocurrencies since then without repeating his old mistakes.
Crypto wallet forget password: The Peter Schiff case
On January 19, 2020, Peter Schiff, an ardent Bitcoin critic, gold advocate, and chief economist at Europac, took to X to share a screenshot of his cryptocurrency wallet app, explaining that he couldn't enter the correct password. His comment said that his password was no longer valid and that the wallet had been “damaged in some way.”
He concluded that owning Bitcoin was a bad idea. After a number of Bitcoin enthusiasts gave him advice or offered to help him. When Anthony Pompliano, CEO of Professional Capital Management and Bitcoin Maxi fame, assumed that Schiff had simply forgotten his password, the latter added that it was not him who forgot the password, but rather his wallet.
When Rahul Sood, another technology executive, asked Schiff for a pitch, Schiff said he had never had one before. Several days later, Schiff admitted that he had misidentified his PIN as a password, but insisted that he still could not access his coins. This is nothing strange considering the fact that the economist did not save his password or seed phrase.
Fortunately, he said it wasn't a tragedy for him because the bitcoins in his wallet were gifted, and his plan was to hold HODL until the bitcoin sank. Quick reminder: When the story happened, the price of Bitcoin was around $8,600. This story tells us that no matter how high your position is in the financial world, if you use cryptocurrency apps incorrectly, it is possible to lose your coins.
Orange Paper: The Mark Frauenfelder Case
One of Wired's first writers and BoingBoing co-founder Mark Frauenfelder, Share his story In wired. He spent $3,000 to buy 7.4 Bitcoin in January 2016. When the price of Bitcoin skyrocketed, he wisely decided to move his coins to a Trezor hardware wallet. He wrote down the 24-word seed phrase on an orange piece of paper, created an easy-to-remember PIN, and added it next to the seed phrase.
While Frauenfelder was on vacation, the cleaning service employee threw the orange paper away. In 2017, when the price of Bitcoin skyrocketed, Mark decided to transfer his coins, but it turned out that he forgot the PIN.
One advantage of Trezor is that each incorrectly entered PIN doubles the waiting time before the next attempt. Mark soon found himself facing an hour-long wait. That's when he decided to contact the support team. However, without an initial phrase written on the same missing piece of paper, they couldn't do anything. It took Frauenfelder four hours of a hypnosis session to retrieve the PIN. One is incorrect. Subsequent attempts resulted in the wallet being blocked for 18 hours.
As an IT professional, Frauenfelder was familiar with high-level experts in the financial technology field. Someone advised Mark to seek help from Salim Rashid, a hacker prodigy. Rasheed was able to hack Trezor and retrieve the PIN and seed phrase. Please note that the hacked version of the wallet is no longer supported, and newer versions are considered safe. Please do your best to store your backup data safely.
The professor has learned his lesson: the Alexander Halavé case
Alexander Halavis, a professor of social technology at Arizona State University, bought $70 worth of Bitcoin in front of a graduating class as part of an educational process in 2010. He didn't think much about these currencies at the time, so he lost access to his wallet.
Seven years later, in interview Amid the crypto craze of 2017, Halavis joked that he tries to ignore news about Bitcoin's current price so as not to get upset.
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