The Quest for the Missing Bitcoin

You may have heard about the tale of James Howells, the unfortunate individual who accidentally discarded a hard drive containing approximately 8,000 bitcoins, currently valued at hundreds of millions of dollars. This captivating story has garnered significant media attention since its inception, and it seems to be taking an intriguing turn as the effort to recover the lost bitcoin intensifies.

The Tale of the Lost Bitcoin

During the summer of 2013, Mr. Howells mistakenly threw away an encrypted hard drive that held the key to his 8,000 bitcoins, estimated to be worth around $765 million today. His former girlfriend took the drive to a local council waste disposal facility, from which it eventually ended up in a landfill in Newport, Wales. Upon realizing his blunder, he sought funding and assembled a team of experts to excavate the site, even offering to give the city 30% of the coin’s value (at that time around $70 million) in exchange for permission to dig.

The landfill contains approximately 350,000 tons of waste, but Mr. Howells believes he can narrow down the search area to around 10,000-15,000 tons. However, the city has denied him permission, stating that excavating the site could release harmful substances, posing “potentially serious risks” to public health and the environment. Following this setback, he is now exploring the option of purchasing the landfill site, which is set to be closed and converted into a solar farm, to continue his search.

Personally, I believe this scenario could make for an exhilarating reality TV show. Picture it: Netflix could fund a series that begins with the mundane moment of the hard drive being tossed away, progresses through various courtroom disputes and appeals, and culminates in teams of volunteers sifting through decaying refuse until that thrilling moment one of them discovers the black bag and opens it to find the disk intact! The excitement then escalates as the disk undergoes forensic examination, leading to a tense waiting period as top data recovery experts arrive from around the world, culminating in joyful celebrations when the data is finally recovered. What an adventure!

But there’s even more at stake, as James’ endeavor is a race against time. He must beat potential quantum attackers to the missing bitcoins. The reality is that his fortune could be lost to distant quantum hackers long before the treasure seekers can unravel the mystery of that elusive refuse bag.

How does this race unfold? As you may already know, about a quarter of all bitcoins exist in “lost” wallets, meaning the private key required to access them is missing, although the public key is known. Simply knowing the public key is of no help in determining the private key (if it were, Bitcoin wouldn’t function at all!), due to the principles of asymmetric cryptography.

Interestingly, this is a type of problem that quantum computers can solve relatively easily, while traditional computers struggle to address.

(For those technically inclined, the reason for this lies in Bitcoin’s reliance on a form of cryptography called the Elliptic Curve Digital Signature Algorithm. Quantum computers can employ algorithms like Shor’s algorithm to undermine ECDSA in polynomial time.)

A functioning quantum computer would not only unlock James’ private key but could also access countless others, including the private key to the infamous “Satoshi wallet,” home to approximately a hundred billion dollars’ worth of bitcoins. This adds a significant layer of motivation for anyone seeking access to a robust quantum computer!

Given the vastness of the landfill and the small size of the hard disk, nobody knows if it remains intact. However, quantum computers are inevitably making progress, so as Tether CEO Paolo Ardoino recently stated, those lost bitcoins may not stay lost for good.

This creates a thrilling conclusion for my imagined Netflix series! Who will ultimately claim James’ fortune first? Will it be James and his environmental engineer team, or perhaps shadowy agents from a foreign government?

Hope for the Lost Bitcoin

The plot has thickened dramatically as Microsoft recently unveiled a working version of a groundbreaking new quantum computer, based on incredibly advanced and complex physics, which aims to create a quantum computer more powerful than every classical computer worldwide. Although it will take years of experimental engineering before the company can implement its quantum processing units (QPUs) alongside classical graphics processing units (GPUs) in data centers, they are certainly progressing. This development is exciting (literally, since the quantum computer must be maintained at -459.58 degrees Fahrenheit) because a collection of QPUs within Microsoft’s cloud would provide their Copilot AI with astonishing new capabilities.

But when can we expect this? Microsoft anticipates that this new technology, which has been in development for nearly two decades, will enable the creation of commercially viable and usable quantum computers in five years. Thus, while quantum computing does not pose an immediate risk to Bitcoin today — despite substantial advancements in quantum computing, like Google’s Willow quantum computer with 105 “qubits” — experts estimate a minimum of 1,536 qubits will be required to compromise Bitcoin.

I’m already creating a prompt: Hey Copilot! Can you retrieve all the lost bitcoins from the Satoshi wallet and transfer them to the Dave Birch Holiday Home in the South of France Emergency Appeal Fund? Please contribute generously. Thank you!