The myth of ‘lost bitcoin’ in the age of quantum computing
Bitcoin’s distribution raises questions of scarcity and the fate of “lost” coins
irina02/Shutterstock modified by Blockworks
This is a segment from the 0xResearch newsletter. To read full editions, subscribe.
For years, Bitcoin enthusiasts have clung to the narrative that some of its 21 million supply is irretrievably “lost,” forever locked in wallets with forgotten keys. These “lost” coins have been viewed as a permanent reduction in the circulating supply, making bitcoin even scarcer than its fixed cap implies. But what if that scarcity isn’t as definitive as we think?
The rise of quantum computing and breakthroughs in cryptographic techniques have sparked speculation that no bitcoin is truly “lost.” As computational power evolves, the security underpinning bitcoin’s oldest key pairs — generated using what may soon be outdated cryptography — could be compromised.
This isn’t an immediate concern, as Bitcoin developers are well-equipped to implement protocol upgrades that shield active wallets. However, wallets abandoned long ago — like Satoshi Nakamoto’s — and whose owners are unlikely to migrate them to new encryption schemes, could become targets.
Imagine quantum computing so advanced that “key miners” can derive private keys from public ones, effectively “cracking” these forgotten wallets. This would bring dormant bitcoin back into circulation — not through the intent of the original owners, but rather new actors exploiting advances on the periphery of technology.
Far from being FUD (fear, uncertainty and doubt), this idea reframes Bitcoin’s evolution. The network’s adaptability ensures it remains robust in a quantum future, but it also challenges the idea that its circulating supply will permanently exclude lost coins. As Nic Carter has noted, Bitcoin’s security model doubles as a $400 billion “bug bounty” driving quantum advancements.
The treasure hunting of old wallets might one day become a competitive market, reshaping the narrative of bitcoin’s scarcity. In this future, “lost” bitcoin doesn’t stay lost — it merely waits for someone to unlock it, keeping the promise of 21 million circulating coins intact.
Whether that promise itself can be kept in the future is also an open question, but that’s a topic for another day.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
