RACHEL MARTIN, HOST:
As the digital currency bitcoin has skyrocketed in value, many of the early adopters have become millionaires - only if, that is, they can find their bitcoins. Kenny Malone from our Planet Money team went on a virtual treasure hunt.
KENNY MALONE, BYLINE: Syl Turner heard about bitcoin about 10 years ago, and he figured, what the heck, got a couple of coins and then saved them to what's known as a digital wallet on his hard drive.
SYL TURNER: You know, at the time I didn't think bitcoin was worth anything so I didn't (laughter), back anything up.
MALONE: To be fair, it wasn't worth anything at the time. Turner had digital pennies and then let them fall between the digital couch cushions. And a decade later, those pennies were worth $25,000. And so Turner is standing in his attic, staring at a waist-high layer of junk, looking for a 10-year-old hard drive.
So let's dig in. Let's do this.
TURNER: Yeah. Yeah, we can start digging in.
MALONE: I think...
TURNER: All right. There's, like, a broken fog machine.
MALONE: Some kind of table saw thing, paper shredder, Game Boy Advance.
TURNER: Baby seat.
MALONE: Two TVs that are identical, Goldfish crackers box.
While Turner rummages, we found an expert specifically in lost bitcoin.
What do people actually say? Bitcoin? Bitcoins?
JONATHAN LEVIN: You can have bitcoins, and bitcoin is, like, the currency unit.
Jonathan Levin is co-founder of Chainalysis, a company that makes bitcoin analysis software, and the company did a study that found around 20 percent of all bitcoin is lost, out of circulation. By today's valuation, that's more than $25 billion. And Levin says the confusing thing is that, technically speaking, bitcoin can't be lost.
LEVIN: Yeah. So if I send you bitcoin, I send bitcoin to your account on the bitcoin blockchain.
MALONE: Blockchain - big word, sure, but here's a very non-technical way of understanding what it means. Imagine with me, if you will, a massive auditorium filled with bitcoin bookkeepers. Now, Jonathan wants to send me one bitcoin. He walks on stage in front of all these bookkeepers, steps up to a microphone, and he's like...
LEVIN: (Clearing throat). Hello, entire bitcoin universe. As all of your books show, I, Jonathan, have three bitcoins to my name.
MALONE: Of course, it would not be a name. It would be an anonymized account number.
LEVIN: I would like everyone here to know that I am giving one bitcoin to Kenny.
MALONE: After Jonathan says this, all of these virtual ledger keepers sort of scribble this transaction down, deduct one bitcoin from Jonathan's account, increase Kenny's account by one, and that is a bitcoin transaction. Nothing is really transferred. It's more like an instantaneous adjustment across a whole bunch of ledgers. When people talk about the blockchain, they're talking about this system where there is no central bookkeeper.
TURNER: Let's see. Stepped on something.
MALONE: Syl Turner, still digging through his attic.
TURNER: Here's a frisbee.
MALONE: Whatever bitcoins Syl Turner has, they're still there sitting in a kind of virtual vault, but he has lost the key. He's looking for an old hard drive with a super complicated password, and it's not up here.
TURNER: I don't think I put it in this one.
MALONE: Bitcoin was created to be this decentralized currency. There's no federal reserve tweaking interest rates, there's no treasury department printing new money and there's no customer service line to call if you are Syl Turner. But that lost bitcoin expert Jonathan Levin, he does have a phone number.
(SOUNDBITE OF PHONE LINE RINGING)
MALONE: Can you guys all hear each other OK?
MALONE: So we have gathered here today to try and resurrect Syl's lost bitcoin. And I put Jonathan Levin on the phone with Syl Turner to see if there was any way to salvage Turner's bitcoin.
TURNER: All right. So probably 2009 or 2010, somewhere around there...
MALONE: Turner explained how he knows he's got tens of thousands of dollars of bitcoins locked away, he just cannot find that hard drive with the digital wallet with the private key.
TURNER: So that's where I'm at.
LEVIN: OK. Well, what we need to find the needle in the haystack is even, like, a little bit of a key.
MALONE: What Levin is saying is that bitcoin private keys are designed to be un-guessable even by the most powerful computers we have right now. But if Turner happened to write down part of this key at some point, there are companies that will use that information to help him break into his account.
TURNER: So there are bitcoin bounty hunters out there.
LEVIN: There are bitcoin bounty hunters out there.
MALONE: But, like lots and lots of other early bitcoin enthusiasts, Syl Turner did not write down any part of the key and has nothing to go on.
LEVIN: Yeah. Unfortunately - unfortunately we can't actually help you out.
MALONE: I don't know. What kind of things do you say to somebody in Syl's position?
LEVIN: For the people that have lost their bitcoins, I say tough luck. (Laughter).
TURNER: I know this is going to be, like, my deathbed regret. I'm like, I should have backed up that wallet.
MALONE: Kenny Malone, NPR News. Transcript provided by NPR, Copyright NPR.