8,000 BTC Buried in the Landfill and Other Horror Stories of Lost Coins

The tales of lost cryptocurrency serve as harsh reminders of the importance of safeguarding digital assets. From hard drives discarded in the trash to wallets locked behind forgotten passwords, these horror stories highlight the risks of negligence in the world of crypto. One of the most infamous cases involves James Howells, whose efforts to recover a lost hard drive containing 8,000 Bitcoins have become a saga of both financial tragedy and persistence. Here are some of the most notable stories of lost coins that still haunt their owners.

James Howells: The Hard Drive in the Landfill

James Howells, a Welsh IT worker, became an unwitting symbol of Bitcoin’s potential and its pitfalls. In 2013, he accidentally lost access to 8,000 BTC (worth millions today) when his girlfriend, Halfina Eddy-Evans, mistakenly threw away his hard drive with the private key to his Bitcoin wallet.

Howells had mined the coins in the early days of Bitcoin but put the hard drive away and forgot about it. When he discovered that the lost coins had become valuable, he tracked the hard drive to the Docksway landfill in Wales. The landfill contained over 1.4 million tons of waste, making the task of retrieving the hard drive seem almost impossible.

Despite Howells’ repeated attempts to gain permission to excavate the landfill, Newport City Council consistently refused, citing environmental concerns. His lengthy legal battle, which included a demand for £495 million in compensation, was ultimately rejected by the High Court on January 9, 2025. At the time, the 8,000 BTC were worth about $750 million. Sadly, his dreams of reclaiming the fortune were dashed, leaving the hard drive’s fate uncertain.

Stephan Thomas: The IronKey Lock

In another notorious case, Stephan Thomas, a U.S. programmer, became entangled in a nightmare involving a hardware wallet. In 2011, he was paid in 7,002 BTC for creating an animated educational video about Bitcoin. To store these coins securely, he used an IronKey USB wallet.

The problem arose when Thomas lost the paper containing the password to the wallet. IronKey devices are designed to lock after ten incorrect password attempts, making recovery nearly impossible. Thomas tried everything to unlock the wallet, including hiring cryptographers and even resorting to hypnosis, but after eight failed attempts, he was locked out for good.

The BTC in his wallet is now worth hundreds of millions of dollars. While Thomas continues to work in the crypto space, he’s never regained access to those 7,002 Bitcoin, serving as a cautionary tale for crypto users everywhere.

Peter Schiff: The Forgotten Password

In 2020, Peter Schiff, a well-known Bitcoin critic and gold advocate, experienced a highly publicized incident when he couldn’t access his Bitcoin wallet. On January 19, 2020, Schiff tweeted about a problem accessing his crypto wallet and claimed that the password had become invalid. Later, it was revealed that Schiff had confused his PIN code with his password and did not have his seed phrase saved.

Despite offers of assistance from the Bitcoin community, Schiff insisted that it wasn’t his fault, though his story revealed a fundamental error in crypto security practices. Schiff admitted that the Bitcoin he couldn’t access had been gifted to him, so the loss wasn’t financially devastating, but the incident nevertheless illustrated how easily anyone, even a financial expert, can mismanage their crypto.

Mark Frauenfelder: The Orange Paper Incident

In 2016, Mark Frauenfelder, an early tech writer and co-founder of BoingBoing, made a well-intentioned but ultimately disastrous mistake. He bought 7.4 BTC for $3,000 and decided to store it on a Trezor hardware wallet. He wrote down the 24-word seed phrase on an orange piece of paper and kept it with his PIN code for easy access.

However, while on vacation, the cleaning service accidentally threw away the orange paper, along with the critical backup information. Later, when Bitcoin’s price surged, Frauenfelder found that he had forgotten the PIN code to his wallet, and attempts to recover it were thwarted by Trezor’s security measures, which implemented waiting periods after incorrect PIN attempts.

Desperate, Frauenfelder even sought help from a hacker to retrieve his PIN, but the security flaw was patched in later versions of the wallet, leaving him with no access to his coins. This case underscored the importance of securing both PINs and seed phrases and storing them in a safe location.

Alexander Halavais: The Forgotten $70 Worth of BTC

In 2010, Alexander Halavais, a professor at Arizona State University, purchased $70 worth of Bitcoin for an educational demonstration in front of his students. At the time, Bitcoin had a relatively low value, and Halavais didn’t take the purchase seriously, which led to him forgetting about the coins.

Fast forward to 2017, during the Bitcoin craze, when Halavais casually mentioned the lost BTC in an interview, joking about how he was trying not to focus on the soaring price. The $70 investment had become worth millions, but Halavais never recovered the wallet and had long since forgotten the private keys.

Lessons Learned

These stories are a stark reminder that crypto assets, though incredibly valuable, come with significant responsibility. Whether it’s forgetting a password, losing access to a hard drive, or tossing out a backup, the stakes are high. To prevent such tragedies, it’s essential to take proper care of backup information, use secure storage methods, and be mindful of potential risks.

The rise of cryptocurrency has brought new opportunities, but it has also introduced challenges that remind us of the importance of caution and diligence in this rapidly evolving space. Treating crypto assets with the same care and respect as traditional investments could save individuals from the heartache of losing their fortunes.