Quick Breakdown
- Billions Locked Forever or Not? Around 2.3M–3.7M BTC (11–18% of supply) are lost, but quantum computing raises questions about whether they could one day be recovered.
- Quantum Threat to Security: Shor’s algorithm could, in theory, break Bitcoin’s ECDSA encryption, but it would require millions of stable qubits, far beyond today’s error-prone quantum machines.
- High Stakes for Crypto’s Future: Experts warn quantum advances could undermine trust, trigger panic, and invite regulation, unless Bitcoin evolves with quantum-resistant cryptography.
An estimated 2.3 million to 3.7 million Bitcoins are believed to be lost forever, which accounts for approximately 11% to 18% of Bitcoin’s total supply. This loss is due to factors like forgotten private keys, lost hardware, and the death of owners. For now, these coins remain untouchable, protected by cryptography so strong that even the fastest supercomputers can’t crack it.
However, the rise of quantum and crypto technologies have raised a new question: could quantum computing one day unlock those long-forgotten wallets? Unlike regular computers, which work with 0s and 1s, quantum computers use qubits that can process many possibilities at once, making them incredibly powerful at solving complex problems.
Their potential to break modern encryption has experts divided. Some see a path to reviving lost Bitcoin, while others warn it could undermine the security of the entire cryptocurrency ecosystem.
How Quantum Decryption Could Work
At the heart of Bitcoin’s security lies public/private key encryption, but experts worry about quantum decryption breaking this system in the future. When someone creates a Bitcoin wallet, they generate a private key (kept secret) and a public key (shared openly). The system is designed so that the public key cannot realistically be reversed into the private key using classical computers.
However, quantum algorithms, most notably Shor’s algorithm, could theoretically break this link by factoring large numbers and solving discrete logarithms exponentially faster than today’s computers.
The catch is feasibility. While the theory is solid, building a quantum computer powerful enough to run Shor’s algorithm at the scale needed to crack Bitcoin keys is far beyond current capabilities.
Today’s quantum machines handle dozens or, at best, a few hundred qubits, far short of what would be needed for practical quantum decryption of Bitcoin wallets.
Q: Can Google’s Willow crack Bitcoin?
Estimates indicate that compromising Bitcoin’s encryption would necessitate a quantum computer with approximately 13 million qubits to achieve decryption within a 24-hour period.
In contrast, Google’s Willow chip, while a significant…
— Kevin Rose (@kevinrose) December 9, 2024
Kevin Rose, the Chairman at Digg, suggests that breaking a Bitcoin wallet’s ECDSA key within 24 hours would (optimistically) require around 13 million logical qubits (or more than 300 million physical qubits, depending on error correction regimes). This gap between theory and practice means Bitcoin remains secure for now.
So, does this apply to Bitcoin specifically? In short, yes. Bitcoin’s Elliptic Curve Digital Signature Algorithm (ECDSA) could be vulnerable if a sufficiently advanced quantum computer were built.
That said, because addresses are hashed, only coins tied to public keys already revealed on the blockchain (like those in spent transactions) would be at immediate risk. Truly “lost” Bitcoin, locked behind undisclosed keys, may remain safe longer than many fear.
Risks of Quantum Computing for Bitcoin
A successful quantum decryption could expose private keys and instantly undermine trust in crypto holdings.
Undermining Bitcoin Security
Bitcoin’s safety depends on public/private key encryption. Right now, this system is nearly impossible to crack with traditional computers. But a powerful quantum computer could break these codes much faster, exposing private keys and letting attackers steal coins.
David Carvalho, a former teenage spam hacker and now CEO of cybersecurity firm Naoris Protocol, warns that blockchain’s cryptographic defenses may buckle under the next wave of quantum and crypto advances. The real danger, he argues, is their fusion, capable not of brute force, but of precise, stealthy attacks.
“Everyone’s waiting for a countdown that won’t come. You won’t get a warning that a 10-year-old Bitcoin wallet has been cracked. You’ll just see funds moved, and no one will be able to prove how or by whom,” he told Cointelegraph.
If this happened, it would strike at the heart of Bitcoin’s promise of secure, trustless transactions.
Market Panic
Crypto markets are highly sensitive to news and fear. Even if quantum computers are not yet strong enough to break Bitcoin, rumors about quantum computing and crypto breakthroughs could trigger panic selling and extreme volatility. Investors may rush to sell their holdings before a perceived security collapse, causing sudden price drops and extreme volatility.
Loss of Trust
Bitcoin has always been seen as “digital gold,” a safe haven for wealth outside traditional finance. If users start believing their coins can be hacked or stolen because of quantum breakthroughs, this trust could erode quickly. Without confidence, adoption by businesses, individuals, and institutions would slow down, damaging Bitcoin’s long-term role in global finance.
Unequal Power Dynamics
Early access to quantum computing and crypto tools might give governments or tech giants an unfair advantage over ordinary investors. This creates a dangerous imbalance, those few groups might secretly use their machines to attack Bitcoin while ordinary users remain defenseless. Such a gap could undo Bitcoin’s appeal as an open and equal financial system.
Attack on Legacy Wallets
Millions of Bitcoins sit untouched in old addresses, some created more than a decade ago. Many of these wallets don’t have the same protections newer ones do. If quantum computers could break into these older keys, billions of dollars’ worth of “lost” or dormant coins might suddenly be stolen or moved. This would shake confidence and flood the market, lowering prices.
Regulatory Shockwaves
If a quantum attack ever proved successful, governments would almost certainly step in with strict rules. They might demand new cryptographic standards, force exchanges to block older wallets, or even temporarily ban certain forms of crypto to “protect investors.” Such heavy-handed intervention could damage Bitcoin’s reputation as a decentralized and independent system.
Final Takeaway
Quantum computing brings both excitement and fear to the crypto world. On one hand, its ability to crack encryption could make lost Bitcoins recoverable and expose vulnerabilities in the current system. On the other hand, the practical challenges, such as building stable, large-scale quantum machines, mean that these risks remain more futuristic than immediate.
The most likely path forward is not the downfall of Bitcoin, but its evolution. Developers are already working on “quantum-resistant” cryptographic methods that could secure wallets and transactions long before quantum computers become a real threat. In a quantum future, Bitcoin’s survival will depend on its adaptability, balancing innovation with security to keep trust intact.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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