For every tale of glittering fortunes made from Bitcoin, there are many stories of woe and regret surrounding the digital currency.
Here are some of the most high-profile cases of people who’ve lost vast – and not so vast – amounts of the digital gold.
One of the most cited cases of Bitcoins being lost or frittered away, involves developer Laszlo Hanyecz and a 2010 pizza order.
Hanyecz is believed to have completed the first ‘real-world’ Bitcoin transaction when he bought two pizzas using the digital currency.
The cost? 10,000 Bitcoins, although to be fair, they were large pizzas. At today’s prices (May 2021) those pies would cost £350,381,580 ($494,038,000).
On the day of the purchase, which is now known as ‘Bitcoin Pizza Day’ in crypto circles, Hanyecz reached out for someone to supply him with the pizzas in return for the coins on an internet forum.
He famously wrote on May 18, 2010: “I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day.
“I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy!
“I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire.
“If you’re interested please let me know and we can work out a deal.”
The offer was taken up by a British man who agreed to buy the two pizzas for him in exchange for the cryptocurrency, which at the time was worth around $41.
Another high-profile case of a lost crypto fortune is that of Bitcoin pioneer James Howells, an IT worker from Newport, Wales.
Howells became involved in Bitcoin in 2009, just as the digital currency was popping into existence.
According to interviews he has given across the web, he was one of the first six people ever to mine Bitcoin – 7,500 coins to be precise (£262,930,334 / $370,528,500).
Then, in 2013, he threw away the hard drive containing the private keys needed to access the fortune in what he describes as case of “mistaken identity”, referring to the HDD.
In 2017 Howells sought permission to allow a search team to probe the landfill site for the missing drive, but his request was denied by Newport City Council despite him offering 10% of the coins’ value if they allowed the excavation to go ahead.
City bosses said they were concerned about “the huge environmental impact” of the operation, which would cost millions to carry out.
Howells said he had the financial backing in place to launch the search mission, which would have involved heavy lifting and excavating machinery, but to date he has been unable to begin his search.
The Irish drug dealer
In 2017 an Irish drug dealer lost 6,000 Bitcoins worth £210,344,267 ($296,585,400) after writing the private keys to his digital wallets on a piece of paper and hiding it in a fishing rod case.
When he was arrested and jailed for five years for cannabis offences, his landlord bagged up his possessions and sent them to a dump in County Galway.
Workers at the landfill site recalled seeing the dumped gear, but waste from the dump was sent to incinerators in China and Germany.
The coins are spread across 12 wallets and were bought between 2011-2012. The Irish Criminal Assets Bureau is said to be monitoring the wallets for any activity.
In 2012 Campbell Simpson, the then editor of Gizmodo Australia threw away a hard drive containing 1,400 Bitcoins worth £49,080,329 ($69,203,260).
Campbell bought the Bitcoins for $25 and placed the private keys on a hard drive. Then, when he moved house, he made the unfortunate mistake of throwing the drive away, stating that “I didn’t need, or care about, anything on it”.
He was later quoted as saying that it was “probably one of the stupidest things, in hindsight, that I’ve ever done” but that that he’s not interested in trying to find the discarded drive.
In 2013 Wired was sent a Butterfly Labs mining device. They used it to mine 13 bitcoins worth £455,745 ($642,731) then trashed their private key.
After mining the coins (which wouldn’t be possible today with the equipment they used) the team debated what they should do them.
They considered charitable donations or using the coins to fund a scholarship.
However, others on the team said the Bitcoin should be destroyed permanently and it was eventually decided that the private key should be trashed.
In 2020 Brazilian Jiu-Jitsu (BJJ) champion Craig Jones revealed that he had once bought some Bitcoin with some friends for “shits and giggles” back in 2015.
He told the CoinJar blog: “We then forgot about it almost immediately.
“Then, when things went crazy a couple of years later, we were all frantically trying to work out who had the password but nobody could remember how to get our account back.
“I definitely have a few regrets there,” he added.
Still frustrating, but not life changing, is the story of Atlanta-based software developer Syl Turner who mined a measly two bitcoins in 2010.
They were stored on a computer that was shunted into the attic and forgotten about when he upgraded his tech.
But when the value of Bitcoin started to soar past $10,000 per coin he decided to retrieve the machine along with the coins.
However, on booting up the computer he realised he had written over the private key because at the time he believed Bitcoin had no monetary value.
20% of all Bitcoins mined are lost
According to a report by finance website Investopedia 20% of all Bitcoins mined so far has been lost.
Other sources put the figure at between 2.78 million to 3.79 million Bitcoins lost, or somewhere between 17-23% of all the coins minted to date.
Unlike fiat currency which can often be recovered if it is not physically destroyed, the likelihood of getting hold of your coins if you’ve lost your private keys is basically impossible.
There are firms of wallet hunters which work to help people retrieve their lost coins. They can charge up to 40% of the value of the recovered funds and employ a wide range of tactics.
The number of Bitcoins that can be mined is limited to 21,000,000 meaning the more coins that are lost the more scare – and potentially valuable – the digital asset will become.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).