The Landfill Fortune: The Biggest Bitcoin Fortunes Lost to Forgotten Keys

Somewhere under a landfill in South Wales sits a hard drive worth more than half a billion dollars if anyone can read it. It has company: a USB stick with two password guesses left, a colleague-wiped laptop, a clicking drive left out with the rubbish in Sydney, and more than a million coins nobody will ever spend again. These are the biggest bitcoin fortunes lost to forgotten keys, and the one habit that would have saved most of them.

Two identical drives, one wrong bin

In February 2009, a month after the network went live, James Howells started mining bitcoin on a Dell laptop in Newport, Wales. By the time he stopped, he had thousands of coins: he put the figure at 7,500 when the story first broke in 2013 and has said 8,000 in recent years. In 2010 he spilled a drink on the laptop, removed the hard drive and kept it in a desk drawer. By 2013 the drawer held two identical drives. One was blank. The other held the only copy of the private key to all of it.

During a clear-out in the summer of 2013, someone put the wrong drive in a bin bag and sent it to the Docksway landfill. By November that year, when the story first made headlines, the coins were worth about $7.5 million, and the drive was already under several months of other people’s rubbish.

The years since have been one long request for permission. In 2021, Howells offered Newport City Council a share of the coins worth more than $70 million. He lined up around $11 million in venture funding for a search built on AI-trained sorting machines and a magnetic belt, aimed at a section of the site holding an estimated 100,000 tonnes of waste. The council said no every time, citing its environmental permits and the position that anything tipped into the landfill became its property on arrival. In January 2025, the High Court sided with the council and struck out the claim as having no realistic prospect of success; in March, the Court of Appeal refused to hear the matter further. The council planned to close the site in the 2025/26 financial year and holds planning permission to put a solar farm on part of it. Howells spent much of 2025 trying to buy the section of the landfill he believes holds the drive, then said in August that he was no longer pursuing the purchase and would try to tokenize his claim to the coins instead.

At $80,000 per bitcoin, 8,000 BTC is about $640 million. Anyone can see the coins on the blockchain. Nobody can move them. The detail that matters most is also the oldest one: in 2009 there was no such thing as a seed phrase. A wallet was a file called wallet.dat, and the file lived on one disk.

Two guesses left

In 2011, a programmer named Stefan Thomas made an animated explainer called “What is Bitcoin?” and was given 7,002 BTC for the work. He stored the private keys on an IronKey, an encrypted USB drive designed to wipe itself after ten wrong passwords, and wrote the password on a piece of paper. The paper is gone. Eight of the ten guesses went with it.

The drive now reportedly sits in a Swiss bank vault. In October 202,3 a recovery firm, Unciphered, said it had found a way around the IronKey’s guess counter and offered, in an open letter, to crack it. Thomas declined; he had already made agreements with two other teams. As of mid-2026, no recovery has been reported. Two attempts remain, and at $80,000 per coin they stand between him and roughly $560 million.

Thomas posted his own conclusion in 2021, and it is the most useful sentence in this article: “Test your backups regularly to make sure they are still working.”

Smaller fortunes, same mistake

Not every lost key makes the national news. Campbell Simpson, an Australian technology journalist, bought 1,400 BTC in 2010 for about $25 and kept the wallet file on a portable drive. A couple of years later, the drive developed a click, so he threw it out with other aging hardware and only remembered the coins months afterward. At $80,000 per coin, that was a $112 million drive.

Gabriel Abed, a Barbadian entrepreneur, lost 800 BTC in 2011 when a colleague reformatted the laptop that held his keys. That is about $64 million at current prices. He kept far more than he lost, and he told The New York Times that being his own bank was worth the freedom it bought.

Then there is the near miss. In 2016, writer Mark Frauenfelder bought 7.4 BTC for about $3,000, moved them to a hardware wallet, and wrote both the PIN and the 24-word recovery phrase on one orange sheet of paper. In the spring of 2017, a cleaning service threw the sheet away, and when he went to move the coins, he found he had forgotten the PIN too. The device doubled its waiting time after every wrong attempt. He got back in that August only because a teenage security researcher found an exploitable flaw in the device’s firmware. The flaw has since been patched. The mistake is still available to everyone.

How many bitcoin are gone for good?

Nobody knows, and the honest answer starts there. The blockchain shows coins that sit still; it cannot show why. Analysts work backward from dormancy, and their totals depend on what they decide to count.

Chainalysis’s 2017 study put lost coins at between 2.78 and 3.79 million, a figure that included the million-plus BTC attributed to Satoshi Nakamoto and never moved. River’s January 2025 analysis excluded Satoshi and weighted each dormant cohort by how likely it is to be truly gone. It arrived at about 1.6 million BTC lost through self-custody mistakes, more than the roughly 1.2 million lost in exchange collapses like Mt. Gox and FTX. Between those two estimates sits a range of 8% to 18% of all the bitcoin that will ever exist.

Dormant is not the same as dead, which is why the range stays wide. On September 22, 2026, an address funded in July 2012 moved 600 BTC after 14.2 years of silence, according to Galaxy Research. Somebody kept a key safe for a decade and a half. This one transaction captures the whole lesson of this article.

Why seed phrase storage matters

Every case above broke at the same point, and it was never the cryptography. It was the one  #5 faculty  no software can back up: human memory. Howells remembered where the drive was but couldn’t reach it. Thomas remembers the drive and not the password. Simpson forgot the drive existed. Frauenfelder kept everything on one sheet of paper.

The modern fix for Howells’s wallet.dat problem is the seed phrase, standardized as BIP39 in 2013: 12 or 24 ordinary words from which a wallet regenerates every one of its keys. It turns a fragile file into something you can write down twice. It also concentrates the wallet’s entire security on one piece of paper, which is where the discipline comes in.

• Write it down offline. Paper or metal. Not a screenshot, not a notes app, not an email draft, not a cloud folder. Malware that scans photo libraries for twelve-word grids exists; our Know the Scam series covers it.
• Keep two copies in two places. One sheet in one drawer is the Howells setup. A second copy elsewhere survives the fire or the flood that takes the first.
• Choose metal when the stakes justify it. Paper fails in water and in fire; a stamped steel plate is indifferent to both.
• Test the recovery before you trust it. Restore the written phrase into a second wallet app or a spare device. Send a small amount in, then out again. Thomas’s two remaining guesses are what an untested backup looks like fifteen years on.
• Never type it into anything that asks. No website, no form, no “support” chat, no wallet “verification” page. No legitimate service needs your seed phrase to help you, and SimpleSwap will never ask for it or for a private key.
• Mind the clipboard and the screen. Clipboard hijackers swap addresses; screenshot malware reads phrases. Type the words by hand from the physical copy.
• Plan for the day you are not there. Someone you trust should be able to reconstruct access without you, through a sealed copy or a split arrangement, so your coins do not end up as one more line in a lost-bitcoin estimate.

Where this meets your swap

Self-custody means you keep the keys at both ends of a transaction. A swap on SimpleSwap moves crypto from a wallet you control to another wallet you control, leaving no account balance on the platform afterward. This arrangement means nothing on our side can restore a key you have lost. The list above is the price of that arrangement. The stories above are the price of skipping it.