Bitcoin, the world’s leading cryptocurrency, faces a significant threat from the rapid advancement of quantum computing and may need to upgrade its core cryptography within the next five years to avoid a potentially devastating quantum attack.
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, introduced the digital currency in the wake of the 2008 financial crisis as a decentralized alternative to traditional financial institutions. Built on elliptic curve cryptography, Bitcoin has attracted both skeptics and major financial players, including BlackRock.
Despite 16 years of existence without a successful hack, the emergence of quantum computing poses the most significant threat to Bitcoin since its inception. Quantum computers, once confined to science fiction, have advanced to a point where they could potentially compromise Bitcoin’s cryptographic security in the near future.
Michele Mosca, a quantum computing expert, suggests this could happen within five years, and potentially as early as next year. “Once firmly in the realm of science fiction, quantum computers have become so advanced that they could plausibly rip through Bitcoin’s cryptography within five years or less,” he stated.
Government agencies, including the US National Institute of Standards and Technology (NIST) and the National Security Agency (NSA), are aiming to transition to quantum-secure standards by 2030. However, the Bitcoin community is primarily focused on theoretical solutions like BIP-360 (Pay-to-Quantum-Resistant-Hash) or commit-delay-reveal schemes.
David Carvalho, founder, CEO and chief scientist of Naoris Protocol, emphasizes the urgency of the situation: “The time for theorizing is over. If concrete steps to adapt the Bitcoin blockchain aren’t taken now, Bitcoin’s entire $2.2-trillion market cap could go up in smoke. All it would take would be one compromised wallet or botched transaction to erode 16 years of painstakingly built trust.”
Microsoft’s development of the Majorana chip has accelerated the timeline for creating practical quantum supercomputers, paving the way for scalable and stable quantum systems. Currently, there are approximately 100 quantum computers in operation worldwide, and McKinsey estimates this number will increase to 5,000 by 2030.
Quantum computers differ significantly from traditional computers, performing calculations in parallel rather than sequentially. This capability poses a severe threat to classical cryptography, including the Elliptic Curve Digital Signature Algorithm (ECDSA) used to protect Bitcoin’s private keys.
Approximately 30% of Bitcoin, equivalent to 6.2 million coins, is held in pay-to-public-key (P2PK) or reused P2PK-hash addresses, making them particularly vulnerable to quantum attacks. A successful breach could result in irreversible losses for holders and undermine the credibility of the entire Bitcoin ecosystem.
BlackRock recently acknowledged the potential threat of quantum computing to Bitcoin in its updated spot ETF filing, highlighting the urgency for proactive measures. “That’s why BlackRock recently acknowledged the threat of quantum to Bitcoin in its updated spot ETF filing. That’s why the time to act is now, before it’s too late,” Carvalho noted.
“Q-Day” refers to the point in time when quantum computers become capable of breaking traditional cryptography. Bitcoin transactions validated today, and even those from a decade ago, remain vulnerable due to the blockchain’s transparent and permanently accessible nature.
Malicious actors are already engaging in “harvest now, decrypt later” tactics, collecting encrypted data in anticipation of Q-Day. Multiple simultaneous attacks could occur when quantum computers reach this level of capability, underscoring the need for Bitcoin to be adequately prepared.
Upgrading Bitcoin’s blockchain to post-quantum cryptography would require a hard fork, a significant step that could disrupt the user experience, fragment liquidity, risk splitting the network, and potentially alienate long-time Bitcoin supporters.
Alternative solutions include hybrid approaches that prioritize transaction security without altering the base layer, layered security models, quantum-secure key management, and infrastructure designed to fortify Bitcoin against impending threats.
Given Bitcoin’s historically conservative and slow-moving nature, implementing these changes will not be a quick process. However, the rapidly approaching threat of quantum computing leaves no room for delay. Decisions must be made and solutions must be implemented to ensure Bitcoin’s survival in a post-quantum future.
“Satoshi gave the world a new monetary system but never said it couldn’t evolve. Now it’s up to the community to make the choice to evolve it and prepare for Q-Day, rather than waiting until it’s too late. It’s not quantum that’s the most significant risk to Bitcoin — it’s complacency,” Carvalho concludes.
The potential consequences of inaction are dire, making it imperative for the Bitcoin community to prioritize and implement effective strategies to mitigate the quantum computing threat and secure the future of the cryptocurrency.
Complacency, according to experts, is the biggest threat. The time to act is now to ensure that Bitcoin can withstand the coming quantum revolution.
