Satoshi’s $80B Bitcoin Problem — And the Proposal That Could Freeze It Forever

Satoshi Nakamoto is widely believed to control around 1 million BTC, placing him among the wealthiest individuals globally — at least on paper. Those coins, however, have remained untouched since Bitcoin’s earliest days. Now, a new proposal from a group of developers and quantum computing experts introduces a scenario where those holdings, along with millions of other coins, could become permanently inaccessible.

A protocol-level response to a future threat

There's a big worry about quantum computers and how they might affect Bitcoin. You see, these powerful computers could potentially break the secret codes that keep Bitcoin wallets safe. This is a problem because some older wallets, especially those made before 2012, show their public keys openly on the blockchain. If quantum computers get advanced enough, they might be able to use this information to figure out the private keys and steal people's money.

To deal with this issue, a plan has been put forward to upgrade the protocol in stages. At first, the network will not allow transactions that send Bitcoin to certain types of wallets that are not secure. Later on, it will also not allow transactions that come from those wallets. If people still have money in those wallets after that, it will be stuck there and can't be used.

This isn't something that can be added as an extra feature or a small update - it's a big change that would need to be agreed on by everyone involved in the network, including the people who mine, the nodes, the exchanges, and the users themselves.

Scale of exposure is larger than it appears

A lot of people are worried about Bitcoin, and it's not just a few old accounts that are the problem. It's estimated that around 30 to 35% of all Bitcoin is stored in old wallet formats, which could be vulnerable to quantum attacks. This isn't just about early adopters, but also about coins that have been lost, or are being held long-term, and even wallets that haven't been used in a while.

Satoshi's Bitcoin stash is really interesting because it's still untouched and stored in old formats. If someone were to hack into those coins, it could cause a huge shock to the market. From a security perspective, having so much value exposed like that is a risk for the whole system, not just for the individual.

A structured migration timeline

The plan includes a long transition period that gives people time to switch their money to new wallet formats that can resist quantum computers once these formats are available.

In the first phase, new transactions to vulnerable addresses would be disallowed
Later on, any spending from those addresses would also be turned down

The goal is to make a smooth transition, avoiding confusion and problems across the entire system. Ideally, regular users and those in charge of maintaining it would have enough time to make the necessary updates. This way, everyone can prepare and adjust without rushing, making the whole process more manageable and less prone to errors.

But what if the people who own these wallets aren't able to use them or don't even know they have them - this is a big problem for a lot of the old Bitcoin accounts.

Irrecoverable coins and supply implications

If this plan goes through, any Bitcoin that's still in old wallets after the deadline will be stuck there forever. That means a huge amount of Bitcoin - possibly millions - will be taken out of circulation, which could have a big impact on the overall supply.

If you look at it from an economic point of view, reducing the number of coins could lead to deflation. However, this wouldn't happen because of market forces, but rather because of rules set by the protocol. This is a crucial difference, as it raises questions about who gets to decide which coins are still valid. It's not just about the economy, but also about control and decision-making. The fact that it's enforced through protocol rules means that someone or some group has to make those decisions, and that's what's really important here.

Governance, not engineering, is the real friction point

The idea of switching to quantum-resistant cryptography isn't really a point of argument. We already use similar methods in other areas of digital security. The real problem is getting everyone on the same page and agreeing on how to do it.

Bitcoin is set up to be very decentralized, which means there's no one person or group in charge. Because of this, making big changes to the system can be really tough. Usually, when people want to make a major upgrade, they have to discuss it for a long time and sometimes the community can't agree on what to do. This can cause some big disagreements among the people involved in Bitcoin.

Some people don't like the idea because it goes against what Bitcoin is all about - being neutral. If some wallets can just be shut down, even if it's for security, it sets a bad example and makes people wonder who's really in control. It's like, if they can do this, what's to stop them from doing something else that affects how Bitcoin works?

The uncertainty around the quantum timeline

The proposal's urgency really depends on how fast quantum computing advances. Some people think that quantum machines that can break codes could be here in just 10 years, but others aren't so sure that's going to happen anytime soon.

This creates a difficult trade-off. Acting early reduces the risk of a sudden security failure but increases the chance of implementing disruptive changes unnecessarily. Delaying action, on the other hand, risks a scenario where migration becomes chaotic or too late to prevent exploitation.

Conclusion

The idea behind Bitcoin has a basic problem that can't be ignored.

There are two main concerns here. One is the need to adapt to new technological threats, like quantum computing. The other is the commitment to keeping things unchanged, neutral, and not interfering too much at the basic level.

The fact that Satoshi's old accounts are still inactive makes this problem stand out, but really, it's something that affects the whole Bitcoin system.

Can Bitcoin upgrade its security model without redefining the rules of ownership itself?

Satoshi's Bitcoin Problem: Proposal Could Freeze Funds

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