James howells bitcoin
Blockchain - big word, sure. But here is a very nontechnical way of understanding what it means. Imagine with me, if you will, a massive auditorium filled with bitcoin bookkeepers. Now, Jonathan wants to send me one bitcoin. He walks onstage in front of all these bookkeepers, steps up to a microphone.
Hello, entire bitcoin universe. As all of your books show, I, Jonathan, have 3 bitcoins to my name. After Jonathan says this, all of these virtual ledger keepers sort of scribble this transaction down, you know, deduct one bitcoin from Jonathon's account, increase Kenney's account by one. And that is a bitcoin transaction.
Nothing is really transferred. It's more like an instantaneous adjustment across a whole bunch of ledgers. When people talk about the blockchain, they're talking about this system where there is no central bookkeeper. And here's where losing bitcoin gets interesting because bitcoin never disappears. All of those computers keeping all of those books all show that my account now has 1 bitcoin, the one that Jonathan gave me.
However, if I lose the key to that account, there is no customer service line to call. There's no bank I can plead with. There's exactly one way into this virtual vault, and it is with my private key. Virtually impossible to remember. And if you lose this key and never find it again, the bitcoins inside your virtual vault will sit there for eternity. So when we talk about lost bitcoin, what we really mean is eternally frozen bitcoin accounts. So now we know how bitcoin transactions are recorded.
We know about the private key and how you can lose bitcoin. The next big question is, how much bitcoin is lost forever? We were sitting around, brainstorming some of the most interesting economic questions that we could tackle. And this was something that came up right away. Bitcoin is not like other currency. There's no government that is going to just print more of it. The system was created so that, for the rest of time, there will be a finite amount of bitcoin.
We even know this number. It's about 21 million bitcoins. And people are now buying and selling bitcoin because it has this scarce resource property. But we don't know exactly how scarce because some of those 21 million bitcoins are already lost forever in a garbage dump, for example.
So that's why Kimberly and Chainalysis and really anyone even thinking about bitcoin is interested in this question. And Kimberly was able to work some fancy analytics and identify millions and millions of bitcoins no one has touched in a long time.
And she thought, OK. There are two main reasons those may have gone untouched. The first is that maybe the owners of those coins are just really savvy investors.
They bought in early, and they are still holding on, waiting for the right time to sell. HODL is like a mantra for early adopters of bitcoin who believe the sky is the limit for this digital currency. What is the other chunk, then? Losers is not bad - mean. Kimberly was able to estimate that of that finite chunk of bitcoins - remember, there will only ever be 21 million of them - there is a painful amount locked away forever.
And on one hand, it shows the most obvious problem with a ruthlessly decentralized money system. If you lose your private key, you lose your bitcoins. In a centralized system, if you had a sack of U. We did a whole episode about this. On the other hand, all of this last bitcoin illustrates something, like, paradoxical, almost, about Bitcoin. We think of it as this ephemeral thing that can just disappear.
But it's there forever, and no one's making new bitcoin. There's only going to be 21 million estimated bitcoin in the history of the stuff. And all of this lost bitcoin is reminder that this is digital, yes. And you could lose it easily, yes.
But it is truly a scarce digital resource - whatever that means. The other thing to note, Kim says, is that the vast majority of these lost coins were lost in the early years of bitcoin, when the coins were essentially worthless. People going forward probably won't be losing at such a high rate. Probably most of the losing has already happened. Because who cares about letting a penny fall through the couch cushions? Even if bitcoin goes back down to pennies, I think people will be more careful about their keys.
So we can see what - how much bitcoin is in this wallet. Oh, our baby is crying. He and his wife, Jaquie ph , are sitting next to his computer. Syl's got his digital wallet. He's got his private key. And for the first time in nearly a decade, he is able to open up his virtual bitcoin vault.
What is dawning on Syl is that his bitcoin vault is empty. Not only is it empty. He can check the history, and he can see that this is clearly the wrong account. He must have, like, set up a second account, a test account.
A friend must have transferred him a little bitcoin, and then Syl transferred it right back. Laughter I don't know what to do now. Well, this is where we're at right now. This is Kimberly and Jonathan from Chainalysis again. I got on the phone with them, and we called Syl Turner. Now, we should say here that the Chainalysis company does not want you to call them about your lost bitcoin. But they are very smart, and they're very kind. And they agreed to hear poor Syl Turner's story and see if there was anything that can be done.
So he tells them the whole story, how he's been back into his attic, and there is not another hard drive. There's not another private key. But he knows there is another account with bitcoins in it. Well, it's a real shame to hear that it wasn't the right hard drive.
Unfortunately, what we need to find the needle in the haystack is even, like, a little bit of a key. What Jonathan is saying is that bitcoin private keys are designed to be unguessable, even by the most powerful computers that we have right now. But if Syl happened to write down part of his key at some point, there are companies that will use that information to help Syl break into his own account.
They'll charge him a fee or ask for some of his bitcoins. But you have to have some piece of your private key. And at this point - and probably forever - Syl does not. This is going to be, like, my deathbed regret. Like, I should've backed up that wallet.
Have you lost something that you need help finding? Let us know about it. Or we're on Facebook, Twitter and Instagram. Today's show was produced by Nick Fountain. Our senior producer is Alex Goldmark. And our editor is Bryant Urstadt. Special thanks this week to Tasnim Shamma for this amazing audio of Syl Turner's hard drive booting up. And also an apology this week to Jonathan Levin and all of Britain, really, for my terrible accent.
If you are looking for something to listen to right now, we have a new show. Today's show is about the underrated numbers in today's jobs report - the numbers you don't hear so much about that tell us a lot about what's going on in the job market. You can find it wherever you find your podcasts. Visit our website terms of use and permissions pages at www. NPR transcripts are created on a rush deadline by Verb8tm, Inc. This text may not be in its final form and may be updated or revised in the future.
Accuracy and availability may vary. Accessibility links Skip to main content Keyboard shortcuts for audio player. Bitcoin Losers The Bitcoin market has gone crazy. And it's revealing something strange. A lot of people can't find their Bitcoins. We go looking for lost billions. January 5, 6: Facebook Twitter Flipboard Email.
Testing, three, two, one. So I called my friend Tasnim Shamma There's knocking on the door right now, so - hey, come on in. Nice to meet you. Nice to meet you as well. You want me to just go straight up to the attic? Yeah, I mean, I guess so. It's kind of what we're here for, right? We'll go up to the attic now. All right, so - yeah.
Are you in the attic? Yeah, we are in the attic. Luckily it's not super hot. I'm a little nervous, too. I can't believe this is happening. Actually, one of my old roommates Of all kinds of stuff that Syl probably should have thrown away. So let's dig in. I mean, there's a lot of empty boxes, too. Do you want me to stay on the line with you while you clean out your whole attic? Oh, I stepped on something.
Syl Turner still digging through his attic in Georgia. All right, so I think it's one of these computers. He's pretty sure that is not the right hard drive, so he pries open a second computer. I really did not expect to see hard drives in here, to be honest. What did you think had happened? I mean, should we just check - should we just check that one now? Yeah, let's look at this one. So Syl heads back downstairs with a hard drive. His baby wakes up. I don't know what this means, but I'm going to copy this out to my hard drive.
But how are you feeling right now? Oh, good, there is a hard drive - there are two hard drives in this one. My thought was I took the hard drive out of this one. And I think - I really do think it is this hard drive, this 1 terabyte. Oh, man, this is actually really shocking to me because I actually did not think that this hard drive was going to be in here.
He boots up this old hard drive. And Syl is worried that he erased this at some point and used it for video games. But he's hoping, searching for any sign of this wallet file.
All right, so I'm - I got to where I believe this would be. There is a bitcoin directory in here where it should be.
So we're going to see if it's in there. There's stuff in here. Syl is pretty sure this is it. And to find out how much bitcoin is on there, he explains that he needs to wait while another piece of software downloads the entire history of every single bitcoin transaction in the world onto his home computer.
It is going to take hours. And unfortunately, there's just no way Tasnim and I can stick around for that. Yeah, I think I found it, but it's encrusted with some kind of, like - I don't know, like, I spilled beer on the couch and, like, this thing is kind of stuck there and I don't know how to get it off without ruining it yet.
So I think what we should do, like, when it's ready - I think you and your wife should just record yourselves figuring out how much is in there. So while Syl is waiting to learn his bitcoin fate, I started to get curious about how many Syl Turners are out there in the world. And the first thing that comes up when you search lost bitcoin is the story of James Howells.
It was the summer. You have working through the stuff in your office and you found the hard drive. Why did you throw it out? This is a BBC interview with James. In fact, this interview is at the landfill where he thinks the hard drive may have wound up. Yesterday they basically told me that anything that goes into the household scrap bin is compressed and buried.
By the way, this interview, it's from A lot has happened since then. More legitimate vendors started accepting bitcoin. Big-time investors started trading it.
And as more and more people saw bitcoin as a way to make money, the price has skyrocketed. Those bitcoins James Howells lost are now worth more than a hundred million dollars. James, I'm sure there's an awful lot of people feeling for you right now.
How do you feel stood here? Well, absolutely devastated, as you can imagine. I just wish I could go back in time and not throw that drive away. Lost bitcoin has been this legendary thing within the bitcoin community. But it's also been kind of anecdotal, and I wanted to get a sense of the actual scale of this.
And, of course, there were economists already on this question. I was writing a paper in , I think, on bitcoin. I bought a couple, also a very small amount. I don't have any bitcoin. Nor did I take it seriously at any point until about three weeks ago.
This is Kimberly Grauer and Jonathan Levin. Kimberly is senior economist at a company called Chainalysis. Jonathan is the co-founder. The company makes software that can dissect bitcoin transactions to spot money laundering, detect illicit behavior but also just to learn about bitcoin.
To understand how the James Howells and the Syl Turners of the world can lose or nearly lose bitcoins, we need to clear up a common misconception that I totally did not understand, either.
There are no bitcoins, which I know - duh. There are not even digital things being traded back and forth with unique serial numbers or whatever. That is not how the system works. Blockchain - big word, sure. But here is a very nontechnical way of understanding what it means. Imagine with me, if you will, a massive auditorium filled with bitcoin bookkeepers. Now, Jonathan wants to send me one bitcoin.
He walks onstage in front of all these bookkeepers, steps up to a microphone. Hello, entire bitcoin universe. As all of your books show, I, Jonathan, have 3 bitcoins to my name. After Jonathan says this, all of these virtual ledger keepers sort of scribble this transaction down, you know, deduct one bitcoin from Jonathon's account, increase Kenney's account by one.
And that is a bitcoin transaction. Nothing is really transferred. It's more like an instantaneous adjustment across a whole bunch of ledgers. When people talk about the blockchain, they're talking about this system where there is no central bookkeeper.
And here's where losing bitcoin gets interesting because bitcoin never disappears. All of those computers keeping all of those books all show that my account now has 1 bitcoin, the one that Jonathan gave me. However, if I lose the key to that account, there is no customer service line to call. There's no bank I can plead with. There's exactly one way into this virtual vault, and it is with my private key. Virtually impossible to remember.
And if you lose this key and never find it again, the bitcoins inside your virtual vault will sit there for eternity. So when we talk about lost bitcoin, what we really mean is eternally frozen bitcoin accounts. So now we know how bitcoin transactions are recorded. We know about the private key and how you can lose bitcoin. The next big question is, how much bitcoin is lost forever?
We were sitting around, brainstorming some of the most interesting economic questions that we could tackle. And this was something that came up right away. Bitcoin is not like other currency. There's no government that is going to just print more of it. The system was created so that, for the rest of time, there will be a finite amount of bitcoin. We even know this number. It's about 21 million bitcoins. And people are now buying and selling bitcoin because it has this scarce resource property.
But we don't know exactly how scarce because some of those 21 million bitcoins are already lost forever in a garbage dump, for example. So that's why Kimberly and Chainalysis and really anyone even thinking about bitcoin is interested in this question. And Kimberly was able to work some fancy analytics and identify millions and millions of bitcoins no one has touched in a long time. And she thought, OK.
There are two main reasons those may have gone untouched. The first is that maybe the owners of those coins are just really savvy investors. They bought in early, and they are still holding on, waiting for the right time to sell.
HODL is like a mantra for early adopters of bitcoin who believe the sky is the limit for this digital currency. What is the other chunk, then? Losers is not bad - mean. Kimberly was able to estimate that of that finite chunk of bitcoins - remember, there will only ever be 21 million of them - there is a painful amount locked away forever. And on one hand, it shows the most obvious problem with a ruthlessly decentralized money system. If you lose your private key, you lose your bitcoins. In a centralized system, if you had a sack of U.
We did a whole episode about this. On the other hand, all of this last bitcoin illustrates something, like, paradoxical, almost, about Bitcoin. We think of it as this ephemeral thing that can just disappear. But it's there forever, and no one's making new bitcoin.
There's only going to be 21 million estimated bitcoin in the history of the stuff. And all of this lost bitcoin is reminder that this is digital, yes. And you could lose it easily, yes. But it is truly a scarce digital resource - whatever that means. The other thing to note, Kim says, is that the vast majority of these lost coins were lost in the early years of bitcoin, when the coins were essentially worthless.
People going forward probably won't be losing at such a high rate. Probably most of the losing has already happened. Because who cares about letting a penny fall through the couch cushions? Even if bitcoin goes back down to pennies, I think people will be more careful about their keys. So we can see what - how much bitcoin is in this wallet. Oh, our baby is crying. He and his wife, Jaquie ph , are sitting next to his computer.
Syl's got his digital wallet. He's got his private key. And for the first time in nearly a decade, he is able to open up his virtual bitcoin vault. What is dawning on Syl is that his bitcoin vault is empty. Not only is it empty. He can check the history, and he can see that this is clearly the wrong account.
He must have, like, set up a second account, a test account. A friend must have transferred him a little bitcoin, and then Syl transferred it right back. Laughter I don't know what to do now. Well, this is where we're at right now. This is Kimberly and Jonathan from Chainalysis again. I got on the phone with them, and we called Syl Turner. Now, we should say here that the Chainalysis company does not want you to call them about your lost bitcoin. But they are very smart, and they're very kind.
And they agreed to hear poor Syl Turner's story and see if there was anything that can be done. So he tells them the whole story, how he's been back into his attic, and there is not another hard drive. There's not another private key. But he knows there is another account with bitcoins in it. Well, it's a real shame to hear that it wasn't the right hard drive. Unfortunately, what we need to find the needle in the haystack is even, like, a little bit of a key. What Jonathan is saying is that bitcoin private keys are designed to be unguessable, even by the most powerful computers that we have right now.
But if Syl happened to write down part of his key at some point, there are companies that will use that information to help Syl break into his own account. They'll charge him a fee or ask for some of his bitcoins. But you have to have some piece of your private key. And at this point - and probably forever - Syl does not. This is going to be, like, my deathbed regret. Like, I should've backed up that wallet. Have you lost something that you need help finding?
Let us know about it. Or we're on Facebook, Twitter and Instagram. Today's show was produced by Nick Fountain.