My $200,000 bitcoin odyssey

My $200,000 bitcoin odyssey
From Engadget - December 5, 2017

I arrived in Hong Kong at the beginning of the Mid-Autumn Festival. This is the full moon festival, celebrating the fall solstice. In Hong Kong, this means several days of public holiday.

First things first, we had a technician from one of Hong Kong's bustling computer malls transfer the data off the dead hard drive -- we got him on his last day before the holiday. Retrieving the data was an easy enough operation. Soon, we were looking at the MultiBit backup files on my computer: So far, so good.

It's helpful here to understand what a bitcoin actually is. The best explanation I have heard is metaphorical: Money began as a physical object, and then it shifted to become your identity (i.e., your name on your bank account). But cryptocurrencies like bitcoin are virtual objects, which means they exist in the digital space, not tied to anyone's identity.

Like a digital dollar bill, a bitcoin can be traded, stolen or lost. But this is still just a symbolic representation of the actual fact: A bitcoin is really just a cryptographically locked address on the blockchain, so rather than having a bitcoin "on" your computer, what you actually have is the private key that can unlock a bitcoin's location on the blockchain. It was that key that we were searching for in Mike's mess of MultiBit folders.

Now that we had the backup files, it was time to get to unlocking. Mike had seemingly created half a dozen or so different wallets when he was securing his bitcoins -- no doubt, a result of the software's baffling interface. The good ol' process of elimination would narrow this down to the wallet that was the ultimate destination for the bitcoin. We loaded up the first wallet file and entered the password Mike had intended to type all of those years ago, and it unlocked. That was a good sign: It meant we knew the password Mike remembered actually worked with at least some wallets -- just not, perhaps, the only one that mattered. The wallet started syncing to the blockchain.

The blockchain is often described as a decentralized public ledger. In practical terms, that means it's a long list of every transaction that has ever occurred. It's "decentralized" because every transaction is confirmed via a math problem solved by computers set up as "miners." Updating the chain from years ago would take time -- about 80 minutes in our case. The full moon was rising in Hong Kong, and we ate Thai food, anxiously waiting for the blockchain to sync.

Each time we saw the $200,000 worth of coins arrive on Nov. 20th, 2013, and vanish on March 20th, 2014.

We watched as the wallet displayed 40 bitcoins arriving on Nov. 20th, 2013. It also displayed the current value: $200,000.

This looked like success, but I urged caution: The chain was still four years behind present day. And sure enough, when March 20th, 2014, rolled around, the balance in the wallet dropped to $0 as all the bitcoins were transferred out.


Continue reading at Engadget »