Ask HN: What if someone discovers Satoshi's secret Bitcoin seed?
Exactly as the title says - what if someone (by chance) discovers Satoshi's secret Bitcoin seed which controls over a million coins.
How does that play out?
How does that play out?
There's about 1.3 million coins circulating on all exchanges as of December 2021[1] (might be higher since the sell-off but I don't see more recent numbers), so assuming everyone held but that wallet (which they won't, but let's pretend for a minute), it'd double the available supply, which I'm guessing would halve the price by itself.
There' still not enough coins for every fiat millionaire on the planet to have a whole coin (56 million millionaires globally)[2] , even with that additional 1.1 million coins flooding the market, so assuming faith in bitcoin isn't permanently shattered at that point, it'll most likely more-or-less recover eventually.
I'm sure that some people will use it as an opportunity to finally become a 'whole-coiner' (owning a whole bitcoin) and/or keep accumulating even when they're dirt cheap, trusting it will go up eventually (I will probably keep throwing $100 a month into it). I suspect those people will find a way to have large, early bitcoin-era gains from it again if they can hold onto it for several years. Make owning the OG bitcoin cool again or something (or hell, might get old enough that nostalgia kicks in and it's cool to own again).
[1]: https://www.thestreet.com/crypto/news/only-1-3-million-bitco...
[2]: https://fortunly.com/statistics/millionaire-statistics/#gref
Besides being a statisical feat along the lines of being struck by lightning every day for a year while also winning the lottery every day, whomever got that key would potentially be obscenely rich. However, spending the money would be a challenge.
That said they'd have to be very very careful. Hopefully the only kind of person that would find that key would have the additional good sense of security and paranoia that Satoshi also had. They'd keep their mouth shut and work hard to keep the secret of their discovery to themselves.
If I had that I'd break it up into a few tens of thousands of smaller wallets and then transfer those directly to different exchanges before chashing out. Or maybe try to find a big company to sell them to.
If we put P_rare_day at a more realistic 1 in a billion, or ~ 2^{-30}, then it only takes 8.53 rare days in a row...
The answer is if you found or derived private keys for those addresses, you need to pre-arrange trades for them with an OTC desk or two to lock in a price. As soon as the coins are moved the entire market will be aware and reprice the asset based on the expanded supply.
OTC desks typically wont ask which address the funds are coming from so dont tell them the whole amount. Just make the trades after setting it up.
This is assuming you want fiat currency, not everyone does.
If the question was about magically coming into control of a wallet.dat, or how would a whale sell-off, or you know, anything more substantive, then I'd agree, but...
I suppose framing it like that, in a conventional system (at least) it's fraud.
The biggest issue would be the massive sell off that would happen if those coins were moved and sold. It would shake crypto to the foundation.
Seriously though: what is this "seed" and what would its disclosure mean for bitcoin?
They are talking about: https://github.com/bitcoin/bips/blob/master/bip-0039.mediawi... and https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...
A way of deriving new keys from a single seed value, which itself can be derived/“backed up” by a set of words. The words are equivalent to the wallet balance.
There is no seed. The seed concept was only invented years after Satoshi left. Early wallets had no seed. They were collections of random keys. That’s why so much early coin is lost. No way to rederive random keys.
Sorry about your dreams of satoshis 12-24 words, but this is not how it was.