Just about everyone wishes they’d bought Bitcoin before it boomed. But the guilt stemming from your failure to do so, is nothing compared to the pain of those who had the foresight to acquire a huge stack of Bitcoin, only to lose it. Though it isn’t kind to laugh at the misfortune of others, there is something uniquely fascinating about these amazing stories of lost Bitcoin treasure.
Like the treasure of sunken ships hidden forever on the ocean floor, lost bitcoin is strewn across the blockchain. Eye-watering sums as impossible to reach as the farthest exoplanet.
According to blockchain forensics firm Chainalysis, of the existing 18.5 million bitcoin supply, approximately 20% appears to be lost, or otherwise inaccessible, stranded in wallets locked for all eternity.
It may seem counter-intuitive, but this is a feature of Bitcoin, not a bug. It is designed without a central authority, because the benefits that might come from having a safety net for human error are far outweighed by the risks that centralisation brings with it.
The percentage of Bitcoin's current supply estimated to be lost forever.
So there are literally thousands of stories of lost bitcoin. Individuals forgetting or mislaying their private keys, or carelessly discarding hard drives containing pass phrases. On other occasions, Bitcoiners pass away without having told their loved ones how to access their blockchain wallet.
What’s the moral of the story? Clearly, it’s that Bitcoin is your responsibility. Do your research before hand, and follow sensible crypto security measures to protect your stack. Stash your seed phrase in a safe place, and have a contingency plan in place in the event that an accident befalls you: failing to prepare is preparing to fail.
In a worst case scenario, you’d rather a loved one gains access to your wallet than your precious bitcoin be lost forever.
It’s a fair bet that many examples of irretrievable bitcoin are from early adopters who moved onto other things and inadvertently got locked out of their wallets. While the amounts concerned are dramatic in aggregate, most of these people will remain forever anonymous.
There are, however, a few famous stories of lost bitcoin that involve such eye-watering sums and tantalising circumstances, that they have become embedded in its folklore and deserve special mention.
James Howell provides arguably the most infamous of lost bitcoin. A computer engineer from Wales, Howell managed to accrue a tremendous amount of coins through mining in the early days, when the nascent currency was virtually worthless. Come 2013, a single bitcoin was valued at $13 – making Howell’s 7,500 BTC haul a nice chunk of change.
Unfortunately, this same year Howell made the grave mistake of throwing out a hard drive containing access details to his wallet.
After discovering the mistake in 2014, and subsequently failing to convince his local council to search a landfill site to locate the hard drive, there can have been few people in the world as desperate for Bitcoin to fail as Howells.
The number of bitcoin stored on a hard drive buried in a rubbish dump in Wales
Of course, the very opposite happened as bitcoin steadily rose in value, reaching $20k in late 2017 and surpassing $60k in early 2021. “I had two identical hard drives and I threw out the wrong one,” Howells explained later. “I have to laugh about it now.”
Howell’s desperate pleas to the local council to allow him to excavate the site have fallen on deaf ears, despite enlisting the help of specialist salvage teams happy to offer their services for a share of the lost booty.
I had two identical hard drives and I threw out the wrong one [containing 7,500 BTC]. I have to laugh about it now.
Type Stefan Thomas into Google and the search engine’s ‘People Also Ask’ section shows four queries: Did Stefan Thomas remember his password? Did Stefan Thomas get his Bitcoin? Did the guy remember his Bitcoin password? How much is Stefan Thomas Worth?
It’s likely the German programmer has already made peace with the fact that he’ll forever be known as the “lost bitcoin guy”.
Thomas made international headlines in 2021 when he revealed that he was sitting on a $220 million crypto fortune – but had forgotten the password to his hard drive.
To make matters all the more agonising, the hard drive gives users 10 attempts before self-wiping with Thomas having already made eight incorrect guesses. Let’s hope for Stefan’s sake, that ninth is a charm.
Just like our Welsh friend, Stefan has received plenty of offers to help him access his fortune, naturally for a share of the trapped funds. Some people, facing the excruciating frustration of not being able to remember a password, have even resorted to hypnotists to try and tap their sub-conscious. There is even a question and answer on Quora - Can hypnosis recover a lost bitcoin wallet?
Dublin drug dealer, Clinton Collins, was a good sight smarter than his peddler peers; rather than store his ill-gotten gains in a bin liner, concealed under the mattress, or in a bank account vulnerable to seizure by the Criminal Assets Bureau (CAB), he built a bitcoin fortune worth millions.
Then he wrote the private keys to his wallets on a piece of paper and tucked it into a fishing rod case. Few could have predicted what would happen next, because Collins never discarded the case; his landlord did.
After the Dubliner was busted for cannabis-related offences, his landlord boxed up all of his goods and dispatched them to a landfill site in County Galway, which means rubbish dumps are now the resting place of two massive bitcoin fortunes across Britain and Ireland.
The value of Bitcoin thrown away with a fishing rod in County Galway, Ireland
Yes, this story begs an obvious question; after being apprehended, why hadn’t Collins instructed a friend or family member to retrieve the fishing rod case and put it someplace safe? Perhaps he was worried they’d find the private keys and drain his wallet. In any case, the end result was the same. At Bitcoin’s top price, Collins’ stash was worth about $348 million.
Perhaps the fact that his useless cryptocurrency wallets are now in the possession of the CAB – who have no more chance of liquidating them than he does – gives Collins a measure of satisfaction.
Collins’ is the ultimate tale of the one that got away, and along with Stefan Thomas and James Howells, has a special place within the folklore of Bitcoin. The allure of these cautionary tales will only grow as the cost of these expensive mistakes grows, but as much as they might raise a wry smile, don’t let the message behind the story be lost on you. Bitcoin is a powerful store of value, but with great power comes great responsibility, and no lost password link.