Half a Billion in Bitcoin, Lost in the Dump | Hacker News Reader

Half a Billion in Bitcoin, Lost in the Dump

newyorker.com

53 pointsdoe8897 comments

This article is about someone who threw away the hard drive containing his wallet file/keys, the only copy he had of it. His wallet would be worth $500M. He wants to excavate the garbage dump to find it.

I'm just wondering what that would look like. It seems a Sisyphean task at best, like seeking a needle in a haystack. And how do you make sure you don't accidentally damage a hard drive with an excavator? What makes him think the hard drive is not already damaged because it has been driven over or just the weight of garbage crushing it? What if his hard drive went through one of those conveyor belts with a giant magnet above it to separate metals?

I'm not an expert, but if you take the cost of the excavation project (not just excavation, but also sifting!), then multiply it by the chance of success, it feels like the expected value is less than the wallet.

It's interesting to think about though. You can easily throw away a pile of cash, but never half a billion. The volume would be too big, you would notice. But a bitcoin wallet of the same street value fits on a micro SD, it could literally fall through a hole in your pocket.

It would be trivially easy to throw away half a billion dollars like this. All you'd have to do is have a winning ticket for a $500MM lottery jackpot in your pocket and put it through the laundry.

Crypto is gambling. People have done it for millennia. You invent some system and some arbitrary rules about what’s valuable (the right domino, an ace of hearts, a jpeg of a monkey, a beanie baby) and then some people win some money and some people lose.

This guy won, and then he lost. Oh well. Just like with the lost lottery ticket no enterprise of actual value has been created or destroyed by this misfortune.

"Crypto is gambling"

Bitcoin is 14 years old now, it's time to get used to it. There are people who hold who were born after it was invented.

Its older than some financial instruments. I am not arguing it will be successfull or that its good, but it is definately proven beyong gambling

> but it is definately proven beyong gambling

Not following here - how and where was this proven?

The lottery is more than 14 years old now, it’s time to get used to it. There are people with tickets who were born after it was invented.

It’s older than some financial instruments. I am not arguing it will be successfull or that its good, but it is definately proven beyond gambling.

> Bitcoin is 14 years old now, it's time to get used to it. [...] Its older than some financial instruments. I am not arguing it will be successfull or that its good, but it is definately proven beyong gambling

No, it hasn't. Being around for more than 14 years doesn't prove something is anything more than gambling. Slot machines have been around almost 10 times as long as Bitcoin, and sticking money into them is still gambling.

Let's go step by step: Gambling is putting down money in a game of chance, that is divorced from physical reality. It contributes nothing to the real economy, horse races do not provide any goods or services. Like horse racing or slot machines. If the US economy collapses, slot machine works the same way.

Value of Bitcoin is providing a real service that functions, payments. Etherium provides computation and used to power crypto-kitties, etc. It was operating for 14 years and it's security functionality is proven. You might think it's function is crap, but that's a separate argument. If Visa and Mastercard collapse tomorrow, that would have a dramatic effect on the value of crypto. If a major government adopts it as a national currency, that would have an effect to.

Therefore it is very much like investing in a startup. Now, the individual people investing into it might have no idea how it works, but how is this different from idiots and speculators among retail investors - Elon Musk tweets about Signal, and value of Signal Advance, a totally unrelated company, goes up 1,100%? That's not gambling but bitcoin is?

I am certain that most of the folks here calling it gambling are not objectively sceptical, they are very salty.

I have accepted things for what they are, I mined my first two bitcoins, spent them on beer at a funky pub in Prague when it was worth $50, and never touched it again. People in the community ranged from anarchists to bankers, and they were more passionate about their work than any startup founders I've seen. I am not envious of them and I don't call them names, I appreciate that they've introduced something completely new to the world even if the outcome is a bit questionable.

NFTs on the other hand seem to have no merit behind them whatsoever, or at least so far I could not see it.

> Gambling is putting down money in a game of chance, that is divorced from physical reality

No, gambling doesn't require the game be divorced from physical reality; and, in fact, none of them are.

Can your address the substance of my post rather than nitpick dictionary definition of a word?

And if you are going to do that, at least contrast speculation and gambling, since that's what we disagree about

> Bitcoin is 14 years old now, it's time to get used to it. There are people who hold who were born after it was invented.

The entirety of modern civilization has been created since the invention of Keno and playing cards. Not sure where you're going with this.

Yes crypto is gambling. So is fiat. This seems to be where people get confused. They think just because everything is priced in fiat that fiat somehow is immune from value swings. Which it's really weird that people believe that given how much the price of things priced in USD changes so much.

Literally everything is a gamble - there's no such thing as a risk-less vehicle for maintaining your wealth. Maybe something like bitcoin is more volatile than USD today, but that is not guaranteed to hold in the future.

Crypto is superior to fiat in every property of money other than stability, but with global adoption of bitcoin I suspect even that property will be more satisfied by crypto in the not-so-distant future.

The word gambling has a meaning.

People don't procure fiat currency primarily in order to profit from its change in value. They use it to engage in trading of goods and services.

People do primarily procure crypto primarily in order to profit from its change in value.

The fact that each can (sort of) be used for the other purpose in limited cases doesn't invalidate that.

> Crypto is superior to fiat in every property of money other than stability

It's not. It's vastly inferior for the purpose of trading value for goods and services.

> The word gambling has a meaning.

I'm aware of that and I'm aware of the meaning. Which is why I used the word.

> People don't procure fiat currency primarily in order to profit from its change in value. They use it to engage in trading of goods and services.

This is exactly the definition of procuring something to use it to increase their own value. When someone receives a good or service they value that good or service higher than the fiat they are holding which is exactly the gamble they're taking by procuring the fiat.

> It's not. It's vastly inferior for the purpose of trading value for goods and services.

I guess I could say "no you're wrong" too, but that's not a fruitful argument

crypto is more fungible than fiat (fiat isn't global and doesn't have global access to exchanging for other fiats, even)

crypto is more durable, fiat is easily destroyed

crypto is more portable, I can take literally billions of USD worth of crypto across borders and spend every single penny of it instantly. You couldn't even begin to hope to have that kind of portability of fiat.

crypto as a category is much more recognizable - there are _many_ different services that will guarantee the authenticity of a bitcoin transfer, while the fiat you're being paid in may very well be counterfeit.

finaly the property of stability - fiat wins here, for now.

Those aren't the same thing. This reminds me of those sort of pedantic disingenuous arguments where people take two words that are sort of in the same conceptual framework but have very clearly distinct meanings and say that they mean the same thing.

Greatest hits include the idea that there's no difference between working for a company and having your own business ("you go from one boss to many bosses") or the idea that prostitution and dating are the same thing if the man is paying for dinner.

And so on. That sort of gotcha is never as clever as people think it is. Yes, the concepts are related to each other. No, they aren't the same thing.

Figures someone would mention laundering money.

>It's interesting to think about though. You can easily throw away a pile of cash, but never half a billion. The volume would be too big, you would notice. But a bitcoin wallet of the same street value fits on a micro SD, it could literally fall through a hole in your pocket.

It's not exactly same thing, as you obviously won't lose something like that if you already realise its value. It's more along the lines of throwing out painting from your neighbor and he becomes world best paid artist in 5 years.

Still interesting and scary to think that individual can basically "destroy" irreversibly any amount of savings by forgetting the keys/ sending it to wrong address and that can be done with 1 click.

Right, it wasn't exactly an analogy. But I think it's still somewhat scary how easy it is to accidentally lose as well.

To be fair, he threw it away precisely because it didn't have much value.

It's more analogous to throwing out some of your amazon share certificates in 1997.

The thing is, if you lost your share certificate, but could still prove to the registrar that you were the legitimate owner of those shares, there's a good chance you would get them back. Likewise, if you accidentally burned a bunch of banknotes, but had sufficient fragments remaining to prove your ownership, your central bank is likely to be able to recompense you. That's one of the consumer-friendly features of centralised systems, which is considered a bug in consumer-hostile decentralised systems.

>could still prove to the registrar

Sure and if he had a multisig wallet he would still have his coins.

The equivalency is that he did none of these things.

Failing to take additional steps before a loss is conceptually very different from being able to take additional steps after a loss. You might as well list a whole bunch of additional things he could have done before throwing away the hard drive, e.g. having a recovery phrase split over multiple pieces of paper each stored in different bank vaults (like the Winkelvii), or simply keeping a back-up of the hard drive contents. If you lose the PIN to access your bank account, your bank would never say something like "sorry, can't help, you should have done X, Y or Z before you lost your PIN, but never mind [to quote Satoshi from the article] Lost coins only make everyone else's coins worth slightly more."

All of your examples do is show the steps the present banking system has taken before a loss, to aid recovery in the future, after a loss.

Planning ahead is rewarded in life, what can I say.

> Still interesting and scary to think that individual can basically "destroy" irreversibly any amount of savings by forgetting the keys/ sending it to wrong address and that can be done with 1 click.

That's exactly why any large values of bitcoin ought to be stored in multisignature wallets, 3-of-5 offering pretty robust resilience to loosing a key or two. In that case, you need three different signatures to move any money, so no single click accidental failures. Time locking funds can also prevent user mistakes, as no one can move the coins until the lock time is reached on-chain.

If time locks became popular we sure would have stories like "Florida Man locks 420 millions until the year 2202 thinking it was February next year".

"Florida man accidentally time travels back to 1077 to try to make some cash on early Apple Computer investment, presumed living among native Americans now"

Hilarious !

If you set a timelock by a timestamp lock_time [2], then the latest possible time is Tuesday 2038-01-19 [2].

[1] https://en.bitcoin.it/wiki/Protocol_documentation#tx

[2] https://en.wikipedia.org/wiki/Unix_time#Representing_the_num...

> Howells grabbed the unwanted hard drive and threw it into a black garbage bag.

Would never happen to me, I am a hoarder (especially of old hard drives).

The painting part incidentally happened to my partents.

They had a friend who was basically giving away his paintings but nobody wanted them (they were horrifying, Coraline-style, and actually a picture of his mind).

He even wanted to create a paining roll with similar horrors when they were painting their apparment.

He was a very good friend but the paintings were to much.

Then he died and a few years later his paintings prices hit the roof (various hundreds of thousands of euros). My parents are still glad to not have had the paintings because they were giving them nightmares :)

> And how do you make sure you don't accidentally damage a hard drive with an excavator? What makes him think the hard drive is not already damaged because it has been driven over or just the weight of garbage crushing it? What if his hard drive went through one of those conveyor belts with a giant magnet above it to separate metals?

Money until proven otherwise. Never underestimate the power of money on a person haha. Plenty of people out there that would eat a fair share of the excavated crap for a potential 500 milly never mind sift through it

If he's smart he'll spin the attention into something with actual value than try to actually excavate a landfill

>I'm just wondering what that would look like. It seems a Sisyphean task at best, like seeking a needle in a haystack. And how do you make sure you don't accidentally damage a hard drive with an excavator? What makes him think the hard drive is not already damaged because it has been driven over or just the weight of garbage crushing it? What if his hard drive went through one of those conveyor belts with a giant magnet above it to separate metals?

Sorting out all the hard drives within the proposed quantities of trash seems well within the realm of what's possible with modern waste sorting robots.

Hard drives are really sturdy, it's unlikely that the data would be unrecoverable if you were able to identify the correct hard drive remains.

Yeah, I think you could do this project for tens of millions and have a 20% chance of finding it intact, and you could argue those numbers are conservative. All assuming everything is as described in the article.

Here's an account [0] of a single diamond mine that processes 60,000 tons of material every day, of which 10,000 tons is ore that needs to be examined closely enough to find diamonds.

The article talks about excavating a 250m x 250m x 15m volume, approximately 1 million tons. Even if all of that is potential "ore" - which I doubt - that's a hundred days for the diamond mine.

The diamond miners have different economies of scale and different environmental concerns, but I think it's a good starting point.

[0] https://www.businessinsider.com/diamond-mine-siberia-russia-...

Let's not forget the human factor. Presumably, an operation of this scale would require hiring help - potentially lots of it. How do you make sure that one of the workers does not just leave with the hard drive? It would require security on the level employed in gemstones mines (personal search for every employee who leaves the premises etc.) Kind of hard to set up in a bulletproof way - the potential finder could just let the relevant security people in on the profits.

Offer a percentage of the proceeds to the finder's team. Rationally then, they would be satisfied to give the drive to their employers, because their employers are more likely (than anyone else they'd be able to find) to recover the data from a drive that is badly damaged, and to pay them a generous bonus, as agreed.

It also incentivizes the workers to keep an eye on each other to prevent the drive being smuggled out of the site.

"But a bitcoin wallet of the same street value fits on a micro SD, it could literally fall through a hole in your pocket."

But you can make any number of copies of the wallet.

I guess Ross Hannaman still hasn't found that thumbdrive.

I would not want to be this person, in any shape or form. It's fascinating to think that a man's mind can become so entangled in an alternate reality in hopes of getting back something that he lost.

While it would be a wonderful success story to see him find his hard-drive, I can't even begin to imagine the levels of exhaustion and stress he has endured up to this point.

Your comment makes me think about how sometimes people build their own mental prisons.

I've met several people who told me stories of loosing their Bitcoin; the people who get too caught up on the alternate reality are those who fail to realize they would have sold their coins anyway the first time they had a bill to pay.

I see this point made a lot, and I'm sure it's true for a lot of people, but there are also people who did in fact hold their bitcoin for a very long time.

The part that must really fuck with him is that at this valuation recovering the hard drive would be an entirely realistic endeavour if he simply got the permission to do so.

I feel like his best bet would be to consult various religious leaders and convert this experience into a profound voyage to faith.

Then market a book & speaking tour. Quit at 3 mil and call it a day.

Hahahaha, you are probably right, too.

This wss literally a plot point in HBO's Silicon Valley :

https://www.youtube.com/watch?v=GrEjaZw95kI

(Russ Hanneman searching the landfill site for a lost thumb drive with his crypto).

That's the first thing I thought of. Mike Judge is a prophet.

A "prophet" for putting something that has been reported since 2013 or so in a TV show that came out 2018?

(2013 article: https://www.bbc.com/news/uk-wales-south-east-wales-25134289 - back then it was only 4M)

Oh that happened almost a decade ago.

Why is the New Yorker JUST now reporting on it.

Probably because of the new scheme of seeking financing for a digging operation, now it's worth a lot more.

> A "prophet" for putting something that has been reported since 2013 or so in a TV show that came out 2018?

A "prophet" is also a truth-teller. https://www.merriam-webster.com/dictionary/prophet

No, that plot point was likely written because of this.

This story happened and was publicized first. I’d imagine Judge used it as inspiration for that episode. None-the-less, I love Mike Judge!

Oh I thought that jump drive in the dump JUST happened. Looks like the New Yorker is just now reporting it and it happened years ago.

Silicon Valley is a underrated satire. Not a great comedy if you're not into the dry humor revolving around the SV lifestyle but I really enjoyed it.

Yeah, this whole New Yorker piece is not a new story. The James Howells story has been around for years and party inspired the Russ Hanneman plot haha

The abstraction of mining made concrete. When Bitcoin reaches a certain price, it will become economical to excavate the entire landfill to physically mine the trove of Bitcoin. The growing value forces the ore to surface.

Digging through tons of garbage could be considered "Proof of Work"!

Wouldn't it be nice if the Bitcoin shills could figure out a way of proving they worked to clean up the environment, instead of destroying it.

One could read up on how bitcoin mining is being used in the west Texas Permian Basin to help reduce flared methane gas. Or, how electric companies could mine bitcoin to provide their grids with power consumption for demand/supply load balancing, enabling them to produce more green energy that would otherwise be feasible.

One just has to be willing to look at the facts rather than repeating environmentalist characterizations of bitcoin technology as bad.

If you have mining rigs that you use for load balancing your electric network, wouldn't you want to run them 24/7? Especially because of your upfront capital costs for buying the mining rigs.

Would be cool though if a day with little wind would make for a perfect time to do a 50% attack.

Good question. I'm not sure if the details, but you could learn more here:

https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i...

https://www.reuters.com/business/sustainable-business/oil-dr...

Part of the key is that when there's an increase in power demand in a grid, they usually have to use more expensive sources of power, but if they can temporarily shut off their bitcoin mining to meet demand spikes, they can more efficiently manage their network load.

https://www.coindesk.com/policy/2021/10/11/bitcoin-mining-is...

https://www.cnbc.com/2021/12/04/bitcoin-miners-say-theyre-fi...

https://bitcoinmagazine.com/business/bitcoin-mining-fits-tex...

I don't know a lot about energy grids, and would love to hear from someone who does, but it sounds like bitcoin is a new technology that could provide incredible efficiencies to electricity grids' ability to balance their loads and supply consumers with greener energy overall.

> Part of the key is that when there's an increase in power demand in a grid, they usually have to use more expensive sources of power, but if they can temporarily shut off their bitcoin mining to meet demand spikes, they can more efficiently manage their network load

Or they can do anything else more useful with the excess energy, like store it ( fill batteries, pumped up hydro, hydrogen, etc.), power energy intensive processes, etc. Or, with flexible power plants, lower production temporarily when it's not needed.

Bitcoin literally brings nothing besides a way to waste electricity, but there are many other ways to do that.

I read the articles. It's not at all clear how bitcoin mining is actually helping here. All they're doing is adding another consumer. Two of the articles use that exact phrase - adding another consumer. So yes, it reduces emissions, but only by using the otherwise-wasted gas to power something. Are bitcoin rigs the best thing they could be powering? Seems to me they're just the most profitable way to use that excess energy ... this week. In other words, they help maintain incentives for drilling.

If you want to suggest that others be "willing to look at the facts" then please look at the facts yourself, instead of claiming they exist and then disavowing with "don't know a lot" when people actually look into them.

This is why I simply don't throw away data. It's so cheap to just store it indefinitely. I have all my personal projects, emails, instant messages going back to 2002. It's literally just a matter of copying your home directory when getting a new computer... Sure, you can get fancy with backups, cloud, and whatnot, but data hygiene 101 is just not throwing it away. I don't get why it's so hard.

It's the collection of data that I find difficult. A lot of it is locked with various cloud providers, and can only be retrieved with manual exports.

The BBC reported on this 8 years ago, when the bitcoin was worth $4m! https://www.bbc.co.uk/news/uk-wales-south-east-wales-2513428...

By not being allowed to excavate that landfill, he is basically making money ;)

Maybe he can get a loan against them, like those big stone wheels some people I can't remember used as money somewhere in the world I also can't remember.

I worked building landfills. The scale house operators (who weighed the truck) had some stories about accidentally tossed things. Someone came and asked if they could look for a silver metal box. Sure, they said your not likely to find it. They insisted on looking. What’s in the box? A lot of money.

The only success was when someone got there before the trash truck and they dumped it in a certain area and wallet was recovered.

For $500 million it’s worth trying..though who knows if the drive will even be in one piece.. though landfills are pretty dry and almost nothing rots. landfill archiology.

I think I'm better off, I wanted to start mining when people were still generating btc on their laptops, didn't get it to work. At least I have no place to go back to for that off chance that I somehow swing history the right way and persevere a little longer. Unlike this lad, who forever has this minute chance of being rich again. I think you're better off with 0 chance.

You shouldn't feel bad about missing out. You would have sold anyway when it was worth $20. Or $50. Or $100. etc.

Like the guy who've spent 10k BTC for two Papa John's pizzas in 2010.

That's a fact. I have a wallet from 2014 where I occasionally ordered sushi or Raspberry Pi stuff (on pi-hut) from, every time the amount left after ordering something grew again and I could buy/order something else. Pretty shocking to see what I paid for the earliest RPi's and Sushi back in the day, with the current rate.

I was very active in cryptocurrencies between 2013 and 2014. Had around 25 BTC and I bought hundreds of ethereums in the presale. Sold them all for a minor profit after there was yet another crash and I gave up on it lol. In retrospect I would now be a multi-millionaire at age 30, rather than a working slave living in a rental apartment. Ah well. Like the sibling post said: I probably would have sold it before this point anyway, I'm not THAT diamond handed.

It's 8 AM. Do you know where your data is? Always have a plan.

I recently switched to a TrueNAS system that I back everything up to. It uploads to B2 daily with remote encryption. Keys and passwords are kept in a keepass database on my phone and computers. I've done test pulls as a fire drill. I don't have $500 M in crypto. I don't even have $5 k in crypto.

> It's 8 AM, do you know where your data is? Always have a plan.

Sure, but a significant portion of the problem is that's not the real question.

"It's 8 AM, do you know how important your data will be in ten years?"

Make sure you can’t overwrite the remote site. It’s not a true offsite backup if the source can issue a delete or replace command.

I have immutable snapshots on B2 with a few week lifetime. It is the weakest point, but I'd have to do something very dumb and not realize it within that period. I could extend that period, but it costs more in exchange for trusting myself less.

Edit: actually I just checked and I had left the default lifecycle rules (keep all versions). The bill is still less than a dropbox personal bill for my modest usage.

Its 8 AM. Do you know where your fire extinguisher is? How to do first aid? What to do in a flood? Earthquake? Home break-in? If your bank goes insolvent, and you are so cashless you can't even buy a meal?

Most people aren't prepared for emergencies really, and dats one is not even at the top

Slightly more lucrative but harder to find than the 700,000 unsold Atari game cartridges, including E.T. the Extra-Terrestrial, eventually found in a New Mexico landfill site.

https://en.wikipedia.org/wiki/Atari_video_game_burial

> The computer’s whirring fan began to irritate Hafina, and he decided to stop. “It wasn’t worth putting up a fight,” he remembers.

Why, yes. This time, it was. >..<

Thing is, back in that era, you could mine a few full bitcoins a night doing that.

Anonymity comes at a price.

We have an anonymous system, it's called cash. The price is you lose the anonymity if you store it in a bank, which something you have to do in many countries if you own too much.

You can still withdraw some and spend it anonymously.

Given, you can't buy a house anonymously with cash, but can you do that with bitcoin?

Cash also fairly rapidly depreciates

Not inherently.

No, under the iron grip of central banks.

Well my point is it's nothing to do with 'physical cash' or 'blockchain currency', it's an external effect which could be applied to whatever. Sure less so with something decentralised (again nothing to do with the medium really) - but you can still have positive (as in >0) inflation without someone setting inflation targets and having an 'iron grip' with which to mostly achieve them.

> Cash also fairly rapidly depreciates

Which makes it a bad store of value, but has nothing to do with its utility as a medium of exchange. We have lots of productive investments to hold value in between times it is is converted to cash for exchange.

Bitcoin is mainly attractive right now as one of (or an alternative to, depending on how you define “productive”) those, with a much higher average growth rate but also much more volatility than many of the other popular options.

Note that in the UK you cannot legally buy a house anonymously with anything.

Yeah, it's like that in the most of the world, and that was my point. People act like they can just switch to bitcoin and they don't need any financial system anymore.

I think that was GP's point, not the focus on (physical) cash, which you probably can hand over to your solicitor if you can convince them it's fine but important enough to you to pay whatever charge they have/come up with for it.

Sure you can.

https://www.cbsnews.com/news/pandora-papers-uk-real-estate-h...

https://qz.com/1151221/offshore-shell-companies-own-86000-br...

The sticking plaster for this is .. in progress :/

https://commonslibrary.parliament.uk/research-briefings/cbp-....

UBO registries are kind of a solved problem, everyone will just lie.

You can buy through an offshore shell company.

How can anyone verify he owned all these bitcoins?

Seeing the bitcoin sitting still on his address is a matter of looking up the UTXO.

Confirming the address really belongs to him is probably doable by talking to the few people in the community back then.

It’s worth half a billion in theory.

It’s worth half a billion if half a million people all want to invest $1000 into bitcoin - assuming no other sellers on the market.

Ponzi schemes are wack, and you can still find people who think they too can become hundred-millionaires by putting a few hundred into bitcoin

Except that bitcoin fits none of the definitions of a ponzi scheme, unless you think money as a technology for storing wealth is a ponzi scheme.

For example, under the gold standard (1870s until 1913), the US saw gradual price deflation, meaning people expected their money to gradually grow in purchasing power, yet (amazingly) the economy grew! Turns out deflation isn't bad, even thought it may look like a ponzi to those who don't understand it.

https://www.lynalden.com/bitcoin-ponzi-scheme/

Reply on news.ycombinator.com