James Howells is from Wales, and theoretically, he is a millionaire. For the last few years he has become a regular visitor of the Newport landfill. The very place he disposed of an old hard drive in 2013 – with 7500 Bitcoins. Today? Worth a comfortable 83 million Euro. In that light, it seems relatable that Howells has been trying to unearth his lost treasure. Although the quest has not yet been successful, his efforts still earned him cynical fame in the media. One of many strange stories, floating about on the stormy tides of the “new digital money”. Bitcoin, (besides Ethereum, Litecoin or Ripple) is only one of various “crypto currencies”,  that lately everybody seems to be quite concerned about. But why? Read on.


It all began, many years ago, with the blockchain. To be more specific: With Satoshi Nakamoto, who published an eponymous paper in 2009, launching an economic turnover, that is still unfolding its full proportions. The respective paper presents a digital algorithm, capable of representing a certain amount of “value”. This specific value is not – like our usual “paper” money – controlled by central institutions (banks, governments and the like), but depends on the amount of available currency units. In the representative case of Bitcoin, that available amount is somewhere around 21 million Bitcoins. Because the blockchain algorithm can only create exactly so many unique codes for the crypto currency Bitcoin, there is a limit to the number of units. These circumstances make crypto currencies an independent “value exchange system” – secure, anonymous and without transaction costs.

  • Three of the most common crypto currencies: Bitcoin, Ethereum and Ripple.
    Three of the most common crypto currencies: Bitcoin, Ethereum and Ripple.


So, how does one get Bitcoins? Well, you calculate them! On first guess, that sounds easier than it is, because the blockchain can be understood as a highly complex mathematical problem. Unlike anything you might have done at school, unfortunately. Bitcoin, for this mathematical problem, has about 21 million possible solutions. Each and every one of these solutions is genuinely unique and has to be “guessed” by specialised data computing programs. Whoever finds such a solution is then rewarded with the calculated Bitcoin. Theoretically, for this process of “Bitcoin mining”, a laptop could suffice, but in reality, a lot of high-end computing power is needed to crack the blockchain. About every ten minutes one of these valuable codes is mined, resulting in one new Bitcoin. With every calculated Bitcoin it also becomes increasingly harder to find one of the remaining codes. For this reason specialised “mining rigs” are linked and synchronised to form powerful mining servers, for the sole purpose of Bitcoin-mining.


For those not so eager to gauge their own tunnels into the Bitcoin-mountain, there is another option to become part of the digital gold rush: Trading – with existing, mined Bitcoins. These can be bought, stored and traded with the help of so-called “digital wallets”. A delicate matter nonetheless, as the aforementioned decentralised creation of value makes it downright impossible  to foresee or influence the quotation value of crypto currencies. This unpredictability makes the new digital money a risky gamble with incalculable changes in high-speed: Courses shifting from high-rise to free-fall in no time. With timing and intuition a lot of money can be made – or lost. Recent app-store downloads reveal how increasingly popular the risky crypto trading has become: Since last year the lead of most popular downloads has been taken over by “Coinbase” – an app for e-currency trading.

  • A specialised mining rig for crypto currency mining.
    A specialised mining rig for crypto currency mining.


In the light of recent developments the matter of Bitcoin changes with the angle of perspective. Experts are divided by disagreement, preventively warnings are issued – China recently even banned crypto currencies. Not only for reasons of risky economic shifts of value, but due to the fact that Bitcoins (and other crypto currencies) are an anonymous mean of payent, accepted in even the darkest corners of the web (darknet). A thorn in the flesh of any governance body – and there again, the initial idea behind the blockchain: Establishing an independent value system, beyond institutional control. Quite successfully, it seems. Where the advantages also define the disadvantages, everyone will have to find his own individual position of perspective.

Bottom line.

If you bought a few Bitcoins in 2010, you would be rich today. Back in the day one Bitcoin would’ve cost 0.05 US-Dollar. Today, that same Bitcoin is worth about 8.000 US-Dollar. And the value-course is ever ascending: calculations estimate that by 2140, the very last Bitcoin will have been mined. If you are mining or trading Bitcoins, or if you are investing your money in the countless specialised crypto-companies – the story of the blockchain has only just begun. Who after all has some money on the side, could of course buy some Bitcoins, save them on a hard drive, sit back and wait. Playing “the long game”, is the traders respective term of art. Presumably, this is common knowledge in Newport, England – where James Howells, more likely than not, is still sifting through a landfill, trying to find his treasure.