14 Jan 2014 / Readwrite – James Howells of Wales is one of the Bitcoin community’s most tragic figures.
Last June, Howells inadvertently tossed a hard drive containing 7,500 bitcoins, which he had mined back when they were worth very little. Now that a bitcoin is worth somewhere around $1000, that drive has an estimated worth of $7.5 million. But unfortunately for Howells, an IT worker, city workers say it’s too late for him to recover the drive from the dump.
The sum at stake in Howells’ case brought him lots of attention, but he’s certainly not the only person to lose track of his bitcoins. Outside of anecdotal evidence, however, there’s really no way of knowing how many people have similar tales—or how much they’ve lost.
According to the founder of Bitcoin Black Friday, only 78% of bitcoins in existence were being circulated in 2012. Since it’s impossible to tell whether dormant coins are lost or simply being saved, the holiday aimed to get hoarded bitcoins back in circulation. Researchers found that a full 64% of bitcoins have never been spent; the question is whether they still can be.
Unspent Coins And The Bitcoin Economy
According to Greg Schvey, a Bitcoin researcher, it’s hard to distinguish lost bitcoins from those people are just saving for a rainy day. There is, however, one big clue.
It starts with the block chain, a public ledger that includes every transaction ever made within the currency. When miners verify new transactions, what they’re really doing is appending new blocks onto the block chain.
“Each address has ownership of a certain number of coins,” Schvey said. “As long as we see any amount of coin come out of that address, we know that since the same person has access to all the bitcoins at that address, they’re not lost.”…… Read more
http://readwrite.com/2014/01/13/what-happens-to-lost-bitcoins#awesm=~osWqaUzA8lUoKx
