IN 2009 a Pembrokeshire businessman spent £50 buying 175 Bitcoins. It was to fund a transaction that in the end he did not go on to complete – and the Bitcoin was left unspent.
But now, eight years on, Thomas Sinclair, now the editor of The Pembrokeshire Herald, is on the hunt for a computer hard drive which is now worth over £1.4million.
The value of the internet crypto-currency has skyrocketed in recent years with Bitcoins, which were valued at just a few pence when the currency was launched in January 2009 skyrocketing to £8190 each today – over eight times the value of an ounce of gold.
Thomas Sinclair said: “The computer I used to buy the Bitcoin years ago developed a fault with the graphics card and I stopped using it.
“I suspect the parts were cannibalised to keep other computers going at our offices. I never throw anything away so the hard drive is bound to be somewhere – we are currently conducting a hunt to find it – without it I will not be able to use the Bitcoin.”
He added: “To be honest, I had completely forgotten about the Bitcoins – it was only recently when going through my bank statements I saw the purchase back in 2009 and remembered that I had not spent the £50.
“After asking colleagues in the office to check the value of the 175 coins I purchased I nearly fell off my chair when the answer of £1.4m was given to me – it is simply unbelievable!”
Glenn Alcock, Head of IT at The Pembrokeshire Herald, said: “This is certainly an interesting scenario, but as hard drives have a long lifespan, I’m confident we will be able to retrieve the data successfully.
“As the business has grown, we have accumulated a lot of PCs, so it will take quite a few hours to search through everything.
“Previous employees have not been very organised with storing hardware, so the biggest challenge for me right now is finding every hard drive in the building.
“We are looking for a 6.4GB hard drive manufactured in 1998.”
Jokingly he added: “When I successfully find the hard drive, and retrieve the data, I expect Mr Sinclair will be very generous with his reward.”
Using Bitcoin allows people to bypass banks and traditional payment processes to pay for goods and services directly.
Banks and other financial institutions have been concerned about Bitcoin’s associations with money laundering and online crime because transactions take place anonymously.
The soaring value of Bitcoin and other cryptocurrencies comes despite growing warnings over a price bubble.
The starkest warning came from the JP Morgan chief executive, Jamie Dimon, who said Bitcoin was a fraud that would ultimately blow up.
Speaking in September to media in the USA, he said there was a limited market for the digital currency, arguing that it was only fit for use by drug dealers, murderers and people living in countries such as North Korea.
He pledged to sack any JP Morgan trader investing in Bitcoin, but also admitted he had not been able to dissuade his daughter from investing.
Jordan Hiscott, the chief trader at Ayondo Markets, said: “The returns are truly remarkable, especially given the recent ban on Bitcoin trading in China, where demand had previously accounted for at least 10% of all global volumes.”
Of the more than 16.7 million Bitcoins in circulation, nearly 4 million could be lost forever, according to new research from digital forensics firm Chainalysis, based on a detailed empirical analysis of the blockchain — the ‘digital ledger’ which records all Bitcoin transactions, and which gives the currency its value.
That amounts to a staggering $30bn.
On analyst has explained why the amount of lost Bitcoins is so high: “When Bitcoins are produced, they have a private key associated with them. It works using key-pair cryptography — you have a public address and a private key that go together. The public address is what you use to send Bitcoins, the private key is what you need to spend them.
“If you lose the private key, because of the mathematics involved and the strength of the cryptographic system, which is what makes it so safe, it’s impossible to ever get it back. What’s commonly happened is people have just deleted the file off their computer — the text document that holds the private key.”