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Welshman throws away fortune in Bitcoins

James Howells threw away laptop hard drive, forgetting it contained 7,500 Bitcoins - now worth $1,000 each.

Last updated: 29 Nov 2013 08:31
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Have you ever accidentally thrown out something of value to you? A family portrait, perhaps, or the only remote controller that can operate the decade-old television set in your spare bedroom?

Irritating though those mistakes undoubtedly are, you have probably never consigned anything worth more than $6.5m to the rubbish bin.

Unlike James Howells.

The IT worker from Newport, south Wales, binned an old hard drive during the summer, only to remember last week that he had stored a "digital wallet" of 7,500 Bitcoins - an increasingly popular virtual currency - upon it.

"I've searched high and low," he told the UK's Guardian newspaper.

"I've tried to retrieve files from all of my USB sticks, from all of my hard drives. I've tried everything just in case I had a backup file, or had copied it by accident. And ... nothing."

When Howells created the tokens of the crypto-currency in 2009, they were practically worthless. In the years since, however, Bitcoins have gained popularity as the currency of choice for anonymous internet transactions. Earlier this month, a US Senate committee described Bitcoins as a "legitimate financial service".

And on Wednesday afternoon, the price of each Bitcoin reached $1,000, for the first time since the currency's inception.

The surge in its price has some believing that it has become overvalued in a short period of time, owing to its limited supply and increasing demand.

"A narrow asset class and lots of liquidity is the perfect environment for a rapid burst up in value, and then corrections," said Sebastien Galy, a currency strategist at Societe Generale in New York.

'Be your own bank'

Bitcoins are an entirely virtual conception; there is no physical manifestation of the crypto-currency - you can't fill your wallet with them - and its value depends on investor confidence. They are created by users "mining" them - running complex algorithms needed to make the currency work. It is thought around 11 million Bitcoins are currently in global circulation.

For many, using Bitcoins is almost a political statement in and of itself. Reddit's "r/Bitcoin" online community lauds the decentralised nature of the digital currency.

"Unlike traditional currencies such as dollars, Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin," reads Reddit. "As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank."

Despite two boom-and-bust cycles in as many years, it appears the online currency will continue to gain supporters. Would-be investors do not need to buy entire Bitcoins at once - in fact, you can purchase as little as 0.00000001 BTC at any time.

More than 200 Bitcoin businesses and other merchants are participating in a Bitcoin Black Friday shopping event, where
users can buy everything from aeroplane tickets to Christmas trees to organic beer.

As for James Howells, he has given up hunting through the local waste disposal dump, and remains philosophical about his loss.

"I'm at the point where it's either laugh about it or cry about it," Howells told the Guardian. "Why aren't I out there with a shovel now? I think I'm just resigned to never being able to find it."

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Source:
Al Jazeera and agencies
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