By D. T. Max
If
things had gone just a bit differently, James Howells might today be as
rich as the Queen of England. The decisive moment, he now thinks,
occurred one evening in August, 2013, when he was twenty-eight and at
home with his family in Newport, a small city on the Welsh coast.
Howells and his partner, Hafina, were raising three children, and family
trips—like the one that they had taken to Disneyland Paris—were fun but
exhausting. So he had made plans to treat himself to what he called a
“lads’ vacation”: a trip with friends to a resort in Cyprus. Howells, an
engineer who helped maintain emergency-response systems for various
communities in Wales, often worked from home, and that night he decided
to neaten up his office. As he recently recalled to me, “The thought
process was: I’m going to be drinking every day. I don’t want to be on a
hangover and cleaning this mess up when I get back.”
At around 10:30 P.M.,
Hafina peeked into Howells’s office. “She wanted to have a fag with
me,” he remembers. “The office area, with the window open, was the
smoking zone.” She chatted with Howells as he chose which items to
discard. “I’m chucking this out, putting this back in—bunch of cables,
bunch of paperwork, broken mouse.”
In a cluttered
desk drawer, he found two small hard drives. One, he knew, was blank.
The other held files from an old Dell gaming laptop, including e-mails,
music that he’d downloaded, and duplicates of family photographs. He’d
removed the drive a few years earlier, after he’d spilled lemonade on
the computer’s keyboard. Howells grabbed the unwanted hard drive and
threw it into a black garbage bag.
Later, when the
couple slid into bed, Howells asked Hafina, who dropped off their kids
at day care each morning, if she would mind taking the trash to the dump
also. He remembers her declining, saying, “It’s not my fucking job—it’s your job.” Howells conceded the point. As his head hit the
pillow, he recalls, he made a mental note to remove the hard drive from
the bag. “I’m a systems engineer,” he said. “I’ve never thrown a hard
drive in the bin. It’s just a bad idea.”
The
next day, Hafina got up early and took the garbage to the landfill
after all. Howells remembers waking upon her return, at around nine.
“Ah, did you take the bag to the tip?” he asked. He told himself, “Oh,
fuck—she’s chucked it,” but he was still groggy, and he soon fell back
asleep.
In
Cyprus, Howells didn’t have as much fun as he had expected. His mates
noticed that he wasn’t drinking his share, and upon returning to Wales,
he told me, he was “in a shit mood, and couldn’t figure out why.”
A couple of months later, Howells realized what was bothering him. He came across a BBC news story about a twenty-nine-year-old Norwegian man who had just used profits
he’d made as a bitcoin holder to put a down payment on a
four-hundred-thousand-dollar apartment in Oslo. When plans for bitcoin
were first introduced, in 2008, it was one of a number of new
cryptocurrencies being touted as substitutes for government-issued
money. Initially, most people had treated bitcoin as a curiosity, but it
had since risen significantly in value, and was now starting to find
acceptance as something you could actually use for buying and selling
things.
Howells
had known about bitcoin from the start. Almost five years earlier,
shortly after the cryptocurrency was developed, he’d learned about it in
an online forum. The Bitcoin system, which operated by linking
individual computers together to form a vast, secure network, appealed
to him immediately. It reminded him of two applications he’d liked: Napster, the rogue service for sharing music files, and SETI@home,
which allowed users to combine the power of their computers to search
for extraterrestrial life. Howells downloaded free software that made it
possible to acquire bitcoin. He would lend his computer’s processing
capabilities to help the Bitcoin system create a permanent record of
network transactions, and, in return, the program would let him keep
some currency. A private key—a unique chain of sixty-four numbers and
letters—granted him exclusive access to his bitcoin stash. He soon set
his gaming laptop to spend the overnight hours “mining bitcoin,” as the
process came to be called.
The first time he
mined, Howells’s computer was one of only five on the network. He told
me, “I know this because when you’re in a Bitcoin network it tells you,
on the bottom right, ‘You are connected to x amount of nodes,’
or machines.” He mined at night, off and on, for a couple of months. But
the mining took a lot of processing power, causing the laptop to
overheat. The computer’s whirring fan began to irritate Hafina, and he
decided to stop. “It wasn’t worth putting up a fight,” he remembers. The
coins had no value at the time, and there was no reason to think that
they ever would. “It was just mining for fun,” he said. “It was an
experiment.” The electricity required to keep his computer going had
cost him about ten pounds.
Howells threw himself
into other side projects. The son of a carpenter, he was handy. For his
children, he turned an upstairs room into an elaborate replica of
Minecraft, the video game. The kids loved it, he told me.
Half
a year later, the spilled lemonade destroyed his gaming laptop. He
transferred some of the hard drive’s contents to a new iMac, but he did
not bother with the bitcoin folder. “There was no Bitcoin version on
Apple at the time, so there was no reason,” he recalls. He then
extracted the hard drive and put it in the desk drawer.
According
to the BBC article, the Oslo man had bought the apartment partly by
selling a thousand bitcoins, which were then worth about a hundred and
seventy thousand dollars. By the time Howells ended his mining project,
he had accumulated eight thousand coins—and in the fall of 2013 that
stash was worth about $1.4 million. Howells’s salary at his engineering
job was a small fraction of that, and he sometimes had to get up at 3 A.M. and travel long distances to make repairs to a town’s
emergency-response system. Panicked, he checked his desk drawer. In it,
he found the empty hard drive—not the one with the bitcoin folder.
Bitcoin was first proposed in October, 2008, by Satoshi Nakamoto—a
pseudonym, for one person or perhaps several. No central bank or
organization would control bitcoin, a purely digital currency. The total
amount of money minted would be capped at twenty-one million coins and
could not be changed.
Digital currencies had been
proposed before, but none had truly taken off: they either had flaws in
their technical design or did not find enough early adopters. Nakamoto
framed his proposal, with its focus on decentralization and the limit on
the total amount of bitcoin, as a shrewd response to the financial
crisis of 2008. Central banks had tried to ward off a depression by
flooding their economies with money, a move that had spurred business
activity but had also created the potential for runaway inflation to
decrease the value of people’s savings. Nakamoto declared that bitcoin
could correct this flaw. In an early crypto forum, he explained that a fundamental drawback of conventional currencies was that their
buying power depended on the whims of the government that backed them:
“The central bank must be trusted not to debase the currency, but the
history of fiat currencies is full of breaches of that trust.”
Howells
read Nakamoto’s proposal soon after it was posted. He was already
skeptical of power and those who had it. The neoliberal years had not
been good for Howells’s generation in Wales: the coal mines had closed,
reducing trade at the port, and Newport lacked jobs in other industries.
“The elders own all the property,” Howells told me. “People of my
generation just leave.” The bailout of big banks after the 2008 crash
taught him that “the dollar, the euro, and the pound are scams—the whole system is a sham.” He was an ideal apostle for the
techno-utopianism of the Bitcoin system. “Me and Satoshi in 2009 both
had the same vision,” Howells said.
Many of the
first people who actually used bitcoin as money embraced the concept for
a different reason: cryptocurrency transactions were untraceable. If
someone paid you in bitcoin, you could evade taxes. If you bought drugs
with bitcoin, the money you spent couldn’t be tied to you. Governments
shut out of the global banking system could use bitcoin to buy weapons
on the black market. George Bernard Shaw once wrote, “Money is not made
in the light.” Bitcoin, then, was generated on a moonless night, at the
bottom of a deep pit. As Nakamoto speculated in an early post,
bitcoin “would be convenient for people who don’t have a credit card or
don’t want to use the cards they have, either don’t want the spouse to
see it on the bill or don’t trust giving their number to ‘porn guys.’ ”
Illicit
activity likely helped bitcoin appreciate in value, but Howells was a
libertarian, not a mobster. He liked that the Bitcoin system was
borderless and incorporeal, as the rest of his online life was. He had
been on the Internet every day since his early teens. During the
nineties, when Wales had a brief tech boom, his mother had worked in a
computer-chip factory, and she now worked in a betting shop. An appetite
for a volatile cybercurrency was in his blood. Though he had no plans
to spend the bitcoin he mined, he was pleased that the government
couldn’t track how much of it he had. On the Bitcoin network, a central
record, called a blockchain, certifies the authenticity of all the coins
that have been mined—close to nineteen million to date—but doesn’t
reveal who has them. Imagine a list of all the world’s pieces of gold
which lacks the names of their owners.
The
downside to the system’s anonymity is that bitcoin is a tempting target
for thieves. Just as Silas Marner tries to insure that nobody knows
where he’s stashed his gold, bitcoin owners spend a lot of time insuring
that no one can hack their fortunes. Some prefer to deposit their
private keys in offline wallets—storage devices that are kept
disconnected from the Internet—where they’re more secure from hackers.
Bitcoin
is also easy to lose. Conventional money comes full of safeguards:
paper currency is distinctively colored and has a unique feel; centuries
of design have gone into folding wallets and zippered purses. And once
your money is deposited in a bank you have a record of what you own. If
you lose your statement, the bank will send you another. Forget your
online password and you can reset it.
The
sixty-four-character private key for your bitcoin looks like any other
computer rune and is nearly impossible to memorize. It can also be
difficult to remember where you have stored the key. On Reddit, one
user, writing in 2019, complained that he had lost ten thousand bitcoins
because his mother had thrown out his old laptop. Another early crypto
user was irritated by a clicking sound on his hard drive and
unthinkingly tossed it out. It contained a file with access to fourteen
hundred bitcoins, which he had bought for twenty-five dollars.
From the start, users debated whether it was a feature or a bug of the system that bitcoin was so easy to lose. In a 2010 post to an online forum, a newbie named virtualcoin complained that bitcoin
seemed risky. “If somebody’s losing his wallet (e.g. due to disk crash)
he’s not able to get back his coins, is he?” the poster wrote. “They’re
lost forever?” A more experienced owner named Laszlo Hanyecz, a Web
developer in Florida, asked what the big deal was—people lose their
wallets in the ocean, and “it’s really not that significant.” Nakamoto
weighed in a few hours later, and he was unapologetic: “Lost coins only
make everyone else’s coins worth slightly more.”
According
to Chainalysis, a firm specializing in cryptocurrency data, in
Bitcoin’s first twelve years about three and a half million coins—nearly
a fifth of the coins mined to date—were lost. Nakamoto himself dropped
out of sight in 2011, and he has apparently not claimed his own bitcoin,
which is now worth an estimated sixty billion dollars.
Howells
remembers thinking it was a good thing that there was no way to access
your bitcoin without a private key, because it meant that no one could
seize your bitcoin, either. As he saw it, any compromise in this
principle would have rendered bitcoin pointless, because that would
allow the government and the banks to penetrate, and ultimately
dominate, the system. “Bitcoin doesn’t work on bailouts,” he told me.
“It is what it is. You’re unlucky, mate! Same as I now think of myself.”
When
Howells had his uh-oh moment, his hard drive was already buried under
other people’s trash. He wanted to go to the dump, but he was
embarrassed—and afraid that nobody would believe his story. “Explaining
Bitcoin at the time was not easy,” he recalls. So for about a
month he told no one, and watched helplessly as the bitcoin market
soared, and with it the value of his lost holdings. He remembers saying
to himself, “Oh, shit—this is turning into a bigger and bigger mistake.”
Around the time that his bitcoin became worth six million dollars, he
confessed to Hafina. She was shocked to learn of the potential windfall,
and encouraged him to go to the dump to see if anything could be done.
When he told the manager there that he’d accidentally thrown away about
four million pounds, he got a lot of head shakes, but eventually the
manager took him to an elevated spot to survey the site: the mounds of
churned earth, the depot where trash was mixed with soil, the
grassed-over areas of retired landfill. Howells’s heart sank: he saw ten
to fifteen soccer pitches’ worth of garbage. How could he possibly sift
through it all?
But then the manager gave him
some cheering news. Dumps were not filled randomly—like computers, they
had an architecture. Newport had organized its dump into different
cells: asbestos was deposited in one location, general household trash
in another. It would not be impossible to pinpoint the area where the
hard drive was buried, then disinter it. All he needed was the city’s
permission.
Howells went home and examined the
dump on Google Maps. “There’s only a certain amount of space,” he told
himself. “The amount of rubbish is finite. The object is findable.” He
was like the protagonist of Poe’s story “The Gold-Bug,” William Legrand,
when he first cracks a coded message on a piece of parchment and sees a
huge treasure within his grasp. However, Legrand needs only a shovel to
start digging. When Howells called the city’s refuse division and left a
message asking to launch a search, nobody called back.
By
now, he had asked in a Bitcoin forum if there was another way to get
his private key without physically recovering his drive—even though, he
told me, “I knew there wasn’t.” On Twitter and other sites, he fielded
many amazed responses. To some, the ease with which the coins had come
to Howells seemed like a fantasy or a story from an already distant
past: Nakamoto had designed bitcoin mining so that it required more and
more computer power as the number of unmined coins decreased. “Did you
really mine 7500 bitcoins in only a week?” one commenter asked. (Today,
according to a Times report,
it would require an American home with average electricity consumption
at least thirteen years to mine a single bitcoin.) Others were eager to
lend a hand in recovering his drive. “Email me,” one wrote. “I’ll help
you find your coins and make a movie about it, no cost to you and we’ll
have a blast.” Another offered help in finding a team of psychics and “a
few diggers who will do the dirty work.” A young woman at the
University of Bristol wanted to make Howells a subject of her
dissertation, in which she hoped “to investigate the ‘affective
atmospheres of cryptocurrency.’ ”
A reporter from the Guardian got wind of Howells’s story. At first, Newport officials said that if
they found the drive they would of course give it back, but later they
adopted a more hard-line stance. How could Howells be sure that the hard
drive had been placed in the landfill? In any case, they cautioned, the
drive was likely unusable: it would have been destroyed en route to its
noxious burial place. And, besides, the environmental risk of a
retrieval would be too great.
Howells studied the
technology behind hard drives and came to believe that the city
officials were wrong. Although the covering of the drive was metal, the
disk inside was glass. “It’s actually coated in a cobalt layer that is
anti-corrosive,” Howells told me. He conceded that the hard drive would
have been subjected to some compacting when it was layered in with soil
and other trash. But, however rough the process, it might not have
fractured the disk and destroyed the drive’s contents. Howells told me
he’d learned that, in 2003, when the Columbia space shuttle plunged to
Earth, one of its hard drives was “burned to a crisp,” but its data
could still be retrieved. “They managed to recover ninety-nine per cent
of the data,” he said. At one point, Howells reached out to the company
that NASA had contracted with: Ontrack, a
data-recovery firm based in Minneapolis. According to Howells, the
company estimated that, if the disk hadn’t cracked, there was an
eighty-to-ninety-per-cent chance that the data he needed could be
salvaged. Howells’s bitcoin folder, which contained only his private key
and the history of his transactions on the network, took up a tiny
amount of disk space—“just thirty-two kilobytes!” he told me. He was
certain that, as long as that part of the disk was undamaged, he could
recover his fortune.
As Howells tried to ready a
plan to present to officials in Newport, the value of the cryptocurrency
kept rising. More and more garbage piled on top of the hard drive, and
the private key for his bitcoin sank deeper and deeper. In 2017, the
city rejected his request to attempt an exhumation, citing an adviser’s
statement: “There appears to be no practical way that the drive could be
recovered.”
By the beginning of 2018, Howells had
more than a hundred million dollars buried in the Newport dump. He kept
pleading his case to city officials. He called his local member of the
Welsh Parliament, in Cardiff, and of the British Parliament, in London.
He thought of suing Newport, but such moves, commonplace in America, are
rare in the United Kingdom. “I’m not a court person,” Howells told me.
As
a systems engineer, he knew how to organize a project, and through the
years he assembled an increasingly sophisticated strategy for finding
the hard drive. He met with potential investors, and eventually made
arrangements with two European businessmen who agreed to support a
recovery operation. Howells would get only about a third of the
proceeds. He had hoped for a much higher sum; the money was his, after
all. He recalls being told, “James, that’s not how it works.” He also
consulted with companies that could perform targeted landfill removals.
He became increasingly convinced that this was a realistic path. (“They
probably move more dirt in one season of ‘Gold Rush: Alaska’ than would
be required for this operation,” he told me.) This past January, he
obtained a letter from Ontrack testifying that the drive was likely
recoverable, and, after the Newport dump manager who’d explained to him
the architecture of the landfill retired, Howells enlisted him as an
expert.
Earlier this year, as the value of each
bitcoin passed thirty-five thousand dollars, and Howells’s holdings
exceeded two hundred and eighty million dollars, he made a public offer
to give Newport a twenty-five-per-cent cut of the proceeds, which could
be earmarked for a COVID-19 relief fund. The city did not accept his offer. “The attitude of the
council does not compute, it just does not make sense,” Howells
complained to the Guardian.
Across the Internet, commenters generally did not take a sympathetic
view of Howells’s situation. “Your loss fool,” a poster on the Web site
WalesOnline declared. “This is the ultimate definition of a ‘Loser,’ ”
another wrote, adding, “Wondering how this guy even survived into
adulthood.”
For Howells, it was a particularly
cruel twist that he could not get a serious meeting with Newport
officials despite having become arguably the city’s most famous
resident. He had thought that he was striking a blow for the little guy
by mining bitcoin; now it was clear that, in Newport at least, little
guys still had no power. “It’s my own local team who are screwing me
over!” he told me. “It’s not bankers, it’s not somebody from a far
distance—it’s the people I’ve grown up with and lived with.”
This
past May, Howells finally was granted a Zoom meeting with two city
officials, one of whom was responsible for Newport’s waste and
sanitation services. She listened politely to his proposal to recover
the bitcoin, at no cost to the city, but was not persuaded. As he
recalls it, she informed him, “You know, Mr. Howells, there is
absolutely zero appetite for this project to go ahead within Newport
City Council.” When the meeting ended, she said that she would call him
if the situation changed. Months of silence followed. (A spokesperson
for the city council told me that the official permit for the site does
not allow “excavation work.”)
Earlier
this fall, I went to see Howells in Newport. We had been talking and
texting for nearly a year, mostly on the messaging app Telegram. He had
been by turns evasive and defensive, often coming across as an
unyielding cyber libertarian. Tech shaped his world view. At one point, I
asked him what he thought about the still novel COVID-19 vaccines. He replied, “Something I’ve learnt from IT world . . . don’t
ever get the first version.” This past January, when online brokerage
companies restricted trading in GameStop stock in order to limit its
price rise, Howells wrote to me, “It shows once and for all, in plain
view of everyone watching, that the game (life) is completely and
utterly rigged against the little guy.” While we affably fenced, the
value of a bitcoin rose to sixty-three thousand dollars in April, then
slumped to thirty thousand dollars in July, then rose again.
On
October 21st, the day I arrived in Newport, the value of a bitcoin had
just hit a new peak: nearly sixty-seven thousand dollars. Howells met me
by the train station, wearing jeans and a crisp sweatshirt from
Lonsdale. He drives a twenty-year-old BMW convertible that he bought
before his bitcoin days. He is small and fit, with a skin-fade haircut
and a light-brown half beard. The over-all effect was of concision and
capability.
Moments
after we sat down in a coffee shop, he pulled out his phone and showed
me an app that he uses to track his holdings. Under the rubric “Unspent
Coins” was the current value of his bitcoin: $533,963,174. The previous
day, he noted, he’d made twenty million dollars. We had Welsh pancakes,
and he paid with cash. He explained, “Using credit cards is kind of
enabling the opposition, if you see what I mean.”
We
next went on a tour of Newport, and he told me about the city’s history
of finding lost objects, a topic on which he was very well informed. As
we drove across the River Usk, he mentioned that, in 2002, while the
city was building a new arts center along its banks, workers had dug up a
fifteenth-century Iberian sailing ship. The next day, we visited the
local antiquities museum, where he showed me a cooking pot, likely
belonging to a Roman soldier, that had been buried in a nearby field.
From the shattered remains trickled a trail of coins. Howells compared
them to his buried hard drive, then corrected himself: the coins were
not like bitcoin at all. Sometimes, he explained, messengers and
go-betweens had clipped off a bit of precious metal to repay themselves
for the trouble of handling transactions. “People stole from the coins,”
he said. The percentage of silver in Roman coins kept declining,
setting off runaway inflation. “It’s similar to what the central banks
are doing today,” he said. The widespread use of bitcoin, he assured me,
would prevent a similar economic collapse.
We
went to the dump. It was a bucolic site between an estuary and docks
where, many years ago, ships had been loaded with Welsh coal. Derricks
stood idle. To get to the landfill, we had to drive past some city
offices—“the enemy,” Howells joked. Newport felt rickety: faded signs on
small businesses, empty land where factories had once stood. As he
drove, Howells mused on why the local officials had refused to allow him
to dig up his hoard. He theorized that the dump had not been following
environmental regulations, and that unearthing a section of landfill
could embarrass the city and make it vulnerable to lawsuits. “Who knows
how many dirty baby nappies are buried out there?” he asked.
He
drove to the area where he had estimated that his hard drive would
likely be. We passed through an open gate and stopped in a paved lot.
This large, empty space looked like it was destined for some sort of
industrial development by the city, but Howells wanted it to serve first
as the command headquarters for his excavation project. We got out.
“This plot of land is called B-21,” he said—a propitious number. “How
many bitcoins exist? Twenty-one million!”
The
sun was shining, an unusual occurrence in Wales in the fall. He pointed
at an incline about a hundred feet away: at the top was a tufted hill
with gauges inserted in it, to measure gas release. “The total area we
want to dig is two hundred and fifty metres by two hundred and fifty
metres by fifteen metres deep,” he told me, with excitement. “It’s forty
thousand tons of waste. It’s not impossible, is it?”
After
our visit to the dump, Howells invited me to his house, so that I could
see a PowerPoint presentation he’d delivered, on Zoom, to the Newport
officials. His project, he told me, was budgeted at five million pounds,
but “there is scope for additional funding.” He calculated that a crew
of twenty-five could complete the job in nine months to a year. As he
spoke, his dog, Ruby, ran back and forth at our feet. Before he showed
me the slides, we went down the street to buy beer and crisps at the
nearest convenience store. He had equipped the cashier to accept bitcoin
a few years ago, but it had not proved a success. “No one used it but
me,” Howells said, shrugging. He gave the proprietor two pounds, and a
pound that he owed from an earlier visit.
We
returned to his house. On a wall of the living room, above his computer,
was a gold-and-black Bitcoin clock. Its hands were stopped. Howells
checked his holdings. He was down twenty-two million dollars that day,
but he was unperturbed. “I expected this,” he said. “Whenever it shoots
up so fast, you always have to expect it to come down a little. In fact,
I expect it to come down a lot more.”
He loaded
the PowerPoint presentation and pulled up a slide titled “Consortium
Members.” An avatar of Howells was at the center, with a pickaxe and a
bag of gold. Another slide depicted a flowchart of the process by which
his hard drive would be returned to him: dump trucks would carry items
from the pit to a hopper, which would feed them onto a conveyor belt,
from which “the material would pass under a large 3-D object detection
system to identify all hard drive objects for manual retrieval.” The
object detector was an X-ray machine outfitted with
artificial-intelligence software. “It can spot a gun inside a truck!”
Howells told me. All detritus would be loaded onto forty-ton trucks and
then, according to Newport’s preference, would be reburied, incinerated,
or sent to China.
I said that surely there was an
easier way. The whole point of bitcoin was that it was immaterial. It
was the eight thousand bitcoins that he was after, and they were the
product of a computer algorithm. It was a matter of public record that
someone owned them. Why not just run the system backward to the day that
Howells mined his coins, and let him re-mine them?
Howells
recoiled. My proposal reminded him, he said, of the worst moment in
cryptocurrency history. In 2016, the managers of a competing
cryptocurrency platform, Ethereum,
agreed to restore the equivalent of sixty million dollars to one of the
currency’s holders, after the money was stolen through a vulnerability
in the system’s code. Howells had publicly disagreed with this decision
at the time—he has been very active on crypto social-media sites—and
when Ethereum’s holders split into two camps he sided with those who
refused to acknowledge the rollback. Howells told me, with considerable
passion, “Just for the record, if somebody came along and said, ‘We can
get your five hundred million by doing it this way,’ I’d say, ‘No, thank
you.’ Because if they can do it that way for my coins, then they can do
it that way for anyone’s coins. And then, if the government asked them
to seize someone’s coins, guess what? They could do that as well.”
To
my surprise, the loss of his hard drive had not dimmed Howells’s
interest in cryptocurrency. He had set his father up with a small amount
of crypto, and had even returned to mining for himself a few years ago,
using a set of ten S9s—powerful processors that he ran day and night
for a year and a half. But the economics of bitcoin mining had changed
too much to make it worthwhile: the cost of the electricity exceeded the
value of what he mined. The venture was another failure for him.
His
notoriety as a bitcoin miner made him feel like a potential target:
“Most intelligent people know that I’ve lost my coins, but the bozo
local drug dealer with his friends, they don’t know that. That’s what
worries me.” He explained that he kept the private keys for some of his
crypto in offline wallets that were stored outside the house—or “off
site,” as he put it. That way, if a thief broke in and demanded them, he
wouldn’t be able to hand them over. This safety measure also prevented
him from impulsively divesting himself of his holdings: to sell crypto,
you need the relevant private key. Despite everything, he was still in
it for the long haul.
Howells
took me up to the second floor, to see where the hard drive had been.
The dog patrolled the stairs. “Ruby was basically the kids’ dog,” he
explained. “And when we split up, and they left, she didn’t want to take
the dog.” It turned out that Hafina had left several years ago with
their children. I asked him if the bitcoin loss had played a role in
their breakup. “The truth?” he said. “I tried publicly, and within my
normal life, not to blame her, but I think subconsciously I did.”
Looking
around, you could see that time had stood still in the house since
then. There was dust on everything. The Minecraft-inspired wallpaper
he’d installed to please the children was peeling. The blue-and-white
paint was chipping. The sheets on the bunk beds were crumpled and stale,
as if the kids had left in a hurry and never come back.
He
told me that his children were into other things now, and didn’t visit
anymore. He did not wish to discuss any romantic relationships that he’d
had since Hafina left. “I try to keep to myself,” he told me. “Women
are costly.”
Howells was no longer employed. For
more than a year after the loss of the hard drive, he had continued at
his job as a systems engineer. To make the workday tolerable, he’d
limited how often he consulted the bitcoin-tracking app. He’d even tried
to avoid driving routes that took him by the dump. But, eventually, the
memory of the money he had thrown away overpowered his work ethic. “I
kind of lost the motivation,” he explained.
Earlier, he had told me that his favorite movies were “Fight Club” and “The Matrix”—typical fare for a young man with his beliefs. Now he mentioned the horror franchise “Final Destination,”
in which the smallest mistakes—a loose screw, a malfunctioning pool
drain—lead to gruesome deaths. The lesson, he said, was “how one little
thing can have a knock-on effect.” He told me he could imagine a
different past for himself, one without trouble. “For example, if this
bitcoin thing hadn’t happened, I’d probably still be with my
ex-partner,” he said. “And now married. Living a completely different
life, as we would have done on our original trajectory.” And if he had
mined the bitcoin and not thrown away the drive? “We’d still be
living happily ever after—living on a yacht. She was my girl, you know
what I mean? We’d been together since I was twenty and she was
twenty-two.”
Hafina, who confirmed Howells’s
account of how the hard drive wound up in the dump, says that the
relationship ended “not because of the bitcoin” but for other reasons.
Howells’s
efforts to recover the money had clearly taken a toll on him. Like
Poe’s Legrand, he was “infected with misanthropy, and subject to
perverse moods of alternate enthusiasm and melancholy.” He had spoken to
the press mainly in the hope that it might help him secure his
treasure, and he admitted to me that some of his interviews hadn’t been
entirely honest. To throw potential thieves off his trail, he said, he
had fudged the number of bitcoins he had mined. (He showed me his
bitcoin ledger, confirming that the true number was eight thousand.)
When I insisted on confirming information directly with his business
associates, he resisted, claiming that I might leak the information to a
rival excavation team.
If there is any lesson to
be learned from people who missed out on a bitcoin payoff, it’s that
it’s more emotionally healthy to try to let it go. In 2010, Laszlo
Hanyecz, the Web developer in Florida, offered to pay ten thousand
bitcoins to anyone who would sell him a couple of pizzas. Someone took
him up on his offer, accepting the bitcoin and giving him two pies from
Papa John’s. The value of the bitcoin Hanyecz traded is now worth more
than half a billion dollars. On the anniversary of the pizza incident,
May 22nd, he often re-states his lack of regret to an increasingly
skeptical public and press. Hanyecz likes to note that he was working on
bitcoin back when Nakamoto was active, and that at one point he asked
him whether the system would be endangered if many of the bitcoins were
lost. Nakamoto replied, “Think of it as a donation to everyone.” I asked
Hanyecz if he had any advice for Howells. “Move on,” he said. “No sense
in dwelling on what-ifs.” He added that it was not too late to buy
fresh bitcoin and still make a handsome profit.
Hafina
says that the loss of the bitcoin never bothered her. She noted, “It
has not been a physical thing. Money has never meant that much to me.”
Howells
isn’t yet capable of such an equanimous response to his bad luck. His
frustration isn’t about what he could buy with half a billion dollars,
he explained. He hadn’t mined the bitcoin to get rich: “It wasn’t about
making money. It was about changing money.” In the eight years
since the hard drive went into the dump, he’s occasionally come across
something expensive that he’s coveted. Two months ago, for instance, the
owners of Manchester United offered up for sale a portion of their
shares. But he did not strike me as a greedy man. What he could not seem
to shake was the allure of the money itself. A stupendous fortune had,
against the longest odds, passed into his hands, and now it was gone.
Shortly
after I returned home, Howells intensified his push for a response to
his Zoom session with the Newport officials. In mid-November, he was
told again that the project was too uncertain and the process too
environmentally risky. “I appreciate that this is not the outcome you
will have been hoping for,” the city’s chief executive wrote, with
sedulous indifference. “But please be assured that your request has been
carefully and appropriately considered by the Council.”
Upset,
Howells soon sent me a message: “Jesus, if they had just met with me in
2013, Newport City would now look like f *cking Bel Air.” It hurt him,
he said, that the city didn’t care that he had Ontrack and the former
site manager of the dump in his corner. For the first time in the year
since I’d begun speaking to him, he wasn’t angry, elated, or determined:
he seemed close to despair. I tried to keep his spirits up, saying that
this was just Round One in a long-term fight. “More like the end of
round #3 . . . and they are winning 6-10 every round,” he wrote. “I
don’t really know what else to try.”
Within a few
days, he had bounced back. He was going to propose a feasibility study
to the city now, a proof of principle that a recovery operation could
work. He told me that when he finally found his lost private key he
planned to listen to Elgar’s “Pomp and Circumstance,” as a way of
marking his graduation from bitcoin purgatory. In a text conversation,
we had talked about the likelihood that the value of his stash would
keep rising. “It’s not even a maybe,” he wrote. “Over time the price of
bitcoin against fiat will only go ONE way, up.” He foresaw a battle that
might last “2/5/10 years.” He anticipated his fortune being worth one
billion dollars, then two billion, and eventually five billion. That
might finally motivate the city. Or maybe more publicity would. Or
legislative pressure. Or better technology. On November 8th, his bitcoin
had just risen to a new high: nearly five hundred and fifty million
dollars. “I still hope and feel it can be done,” he told me. “And as
long as I feel that I will keep trying. Does that make sense?” ♦