On June 7, the United States government task force seized more than $2 million in Bitcoin (BTC) to pay a ransom following an attack on the Colonial Pipeline system. A warrant filed with the U.S. District Court for the Northern District of California shows that authorities recovered 63.7 BTC.
As news of the recovery spread through mainstream media, some outlets suggested that the U.S. government somehow hacked the Bitcoin address in order to extract the funds. For example, University of Michigan professor and New York Times contributor Justin Wolfers tweeted:
News that the government has figured out how to snatch bitcoin from the online wallets of cyber criminals surely reduces the use cases for Bitcoin even further.
— Justin Wolfers (@JustinWolfers) June 8, 2021
This triggered a discussion on whether an entity could break through SHA-256 encryption, and if so, why waste this ability on unlocking a Bitcoin wallet that only contains $2 million?
The same type of cryptography is used by the National