Bitcoin buried in Newport landfill

Docksway landfill, pictured in 2007. Located in Newport, Wales, it is the location of the hard drive containing Bitcoin that was buried in 2013.

In mid-2013, James Howells disposed of a laptop hard drive containing the private keys for 7,500–8,000 Bitcoin. Howells has repeatedly requested that Newport City Council allow him to search for the device since 2013, buried in Docksway landfill, Newport, Wales, and has been refused by the council.

Over the years Howells assembled a team of specialists and secured funding for such an excavation, with the council refusing permission citing the cost and environmental impact of such an excavation, as well as legislation. He has offered the council 30% of the proceedings from the coins if found, as well as distributing funds among the population of Newport. As of November 2024, the missing Bitcoins were worth $750 million and Howells sued the council for £495 million, with the council arguing that the device is now their property.

The attempts to recover the missing Bitcoin has been described as a digital treasure hunt, with Howells and his team confident that retrieval of the data remains possible, while the council remains sceptical.

Background

Bitcoin mining

On February 15 2009, James Howells, a Welsh computer engineer from Newport, started mining Bitcoin with a Dell XPS laptop. According to Howells, he mined 400–800 Bitcoin intermittently overnight for two months, which subsequently caused the device to overhead.

Howells later damaged the device and dismantled it for parts, selling some on Ebay. The laptop, containing 32 kilobytes worth of Bitcoin private keys, was also used for gaming, and held music, e-mails and family photographs. The Telegraph later considered Howells to be one of the earliest miners on the Bitcoin network, with The New Yorker identifying him as one of the first five miners.

Disposal of hard drive

Between 20 June and 10 August 2013, Howells disposed of the encrypted hard drive, mistaking one device for another, that contained the cryptographic private keys for 7,500–8,000 Bitcoin, valued at £500,000 at the time of disposal.

By November 2013, the device was valued at £4 million located approximately three to five feet underground in Docksway landfill, Newport, South Wales, after Howells partner had taken the trash with the hard drive to the tip. At the time, he had accepted that the coins were lost. According to Newport City Council, the hard drive would be "buried under 25,000 cubic meters of waste and earth", weighing approximately 110,000–200,000 tonnes, with CNN reporting the challenge in finding the device as near to impossible. The former manager of the landfill site has stated that the device is located in a 15,000 tonne section named Cell 2, where waste had been buried between August and November 2013.

James Howells

Howells lives in Newport and has three children with his partner Hafina. Influenced by his mother who was involved in the production of microchips, he become a regular Internet user in his teens, building computers from the age of 13, and later a Napster user around the time of Bitcoin's inception.

Working various IT jobs he learnt about encryption when working on Bowman communications system, and learnt about Bitcoin in December 2008, prior to studying the concept a month later. After the 2008 bank bailout, Howells considered fiat currencies to be scams and instead favoured the vision of Bitcoin inventor Satoshi Nakamoto, becoming an early adopter of the technology in 2009.

In 2021, he worked from home maintaining emergency-response systems in Wales. A year later, he described himself as a project manager within cryptocurrency and blockchain.

Search attempts

In December 2017, Wired reported that Howells had been refused permission to search for the hard drive by Newport City Council. According to Howells, the search would involve the first case of excavating a landfill site in the United Kingdom, unrelated to a criminal investigation. The council cited concerns over costs, the environmental impact, galvanic corrosion the device would likely have suffered, and additionally noted that potential "treasure hunters" arriving at the landfill site would be breaking the law. Initially the council took a soft approach to the situation, indicating that they would return the device if found, but later took a tougher stance, and stated that searching for the hard drive would be against the law.

In January 2021, having repeatedly requested access to search for the device, Howells offered the council 25% of the proceedings then valued at approximately £200 million. His offer was for the donation of £52.5 million ($71.7 million) to the council to go to the 316,000 population of Newport, that would equal £175 per person, Howells was refused with the council claiming it would breach licensing regulations. His belief was that the drive would be in functional conditions due to the protective casing, and because the glass disk was coated in an anti-corrosive cobalt layer.

According to Howells, he gained financial backing from a hedge fund, who would take 50% of the proceedings; and would be able to identify the location based on council waste records, followed by using data recovery specialists to recover the Bitcoin. The council estimated that the cost for such excavation would cost millions of pounds, with Howells budgeting £5 million for the operation taking 9–12 months.

Even if we were able to agree to his request, there is the question of who would meet the cost if the hard drive was not found or was damaged to such an extent that the data could not be recovered.

Newport City Council, August 2022

In August 2022, Howells expanded his search plan to include the use of artificial intelligence; featuring a mechanical arm to scan waste, drones, and Boston Dynamics robotic dogs for security while excavating, as well as recruiting an AI specialist and an environmental team to the project. His team included eight experts in landfill excavation, including a data recovery advisor who helped recover the black box from the Space Shuttle Columbia disaster, with an increased budget of £10–11 million from venture capitalists, who along with Howells would retain 30% of the proceedings. His new time-frame estimates for the retrieval of the device were between 18 months and 3 years, costing between $6 and $11 million respectively.

Howells also stated his intent to develop a community-owned mining facility on the landfill site with the proceedings, based on solar or wind power, That year, Richard Hammond produced a short documentary on the quest to retrieve the drive involving the recovery team, and by September 2023, the team had doubled in size.

Litigation

On 6 September 2023, Howells legal team published an open letter to Newport City Council with his intention to sue, in attempt to prevent future works on the site, while seeking £446 million in damages and a judicial review of the councils decision to refuse access to the site. His legal team again wrote to the council two months later requesting access to the site, prior to pursing a case in court.

By October 2024, the contents of the hard drive were worth $750 million and Howells sued the council for £495 million, setting a date for a commerce court in Cardiff on 3 December 2024, arguing that he has intellectual property rights other among claims. According to Wales Online, he is being represented by the team of barristers that have represented some of the alleged victims against Mohamed Al-Fayed. The council have argued that they legally own the device as the property was deposited to the site, with Howells' barristers denying such claim based on intent.

Opinion

Howells has stated that had he had access, he would have sold 30–40% of the Bitcoin in 2013, speculating that reaching $100,000 would be a "conservative figure" for the cryptocurrency. In 2017 his interests were focused on Bitcoin Cash and Ethereum, while anticipating that the value of Bitcoin on the hard drive would rise to between $500 million and $1 billion, describing cryptocurrencies as the "new gold, oil and water combined".

In 2017 Howells believed that the chances of retrieving the device increased as the value increased. Five years later while acknowledging that the device was "a needle in a haystack" and that the investment from venture capitlaists was extremely high-risk, he remained 80–90% confident in successfully recovering the hard drive data. The attempts to recover the device has been described as a digital treasure hunt. Analytics firm Chainalysis estimates that the buried Bitcoin is part of 3.7 million, of a total of 21 million, that has been lost.