The rapid advancement of quantum computing presents a looming threat to Bitcoin’s cryptographic security, with experts warning that sufficiently powerful quantum computers capable of breaking Bitcoin’s protections could emerge by 2028.
This possibility has shifted timelines from decades to just a few years, prompting the cryptocurrency community and governments to act swiftly.
Bitcoin’s security relies on elliptic curve cryptography, which quantum algorithms such as Shor’s algorithm could potentially break by deriving private keys from public addresses.
Vulnerable bitcoins include those in addresses with exposed public keys, particularly from early Bitcoin holders, including an estimated 1 million BTC associated with Bitcoin’s pseudonymous creator.
What risks does quantum computing pose to Bitcoin?
Quantum computers threaten Bitcoin in two key ways: the ability to hack private keys from public keys and the risk of network manipulation via faster mining capabilities.
Although mining disruption is less immediate due to hardware and algorithm constraints, stealing funds from vulnerable wallets is a significant risk if no action is taken.
The risk is compounded by the large volume of bitcoins stored in addresses with reused or exposed public keys, making them prime targets for quantum-enabled attacks. Experts estimate that between 20 and 50 percent of all bitcoins in circulation are potentially at risk.
Did you know?
A Bitcoin Improvement Proposal (BIP) known as "QuBit" or BIP 360 has been drafted to introduce a new address type, called Pay-to-Quantum-Resistant-Hash (P2QRH), which uses quantum-resistant signature schemes to protect against future attacks.
How is El Salvador protecting its Bitcoin reserve?
El Salvador, the first country to adopt Bitcoin as legal tender, has proactively redistributed its Bitcoin holdings valued at approximately $687 million across multiple new digital wallets.
This limits the amount held in any single address, reducing the threat posed by quantum attacks on exposed public keys.
Such strategic moves identify and mitigate vulnerabilities before quantum computers reach the necessary capability.
The country’s initiative reflects a broader concern to preserve asset security amid accelerating quantum progress.
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The cryptographic vulnerabilities in Bitcoin’s design
Bitcoin’s use of elliptic curve cryptography (ECC) and SHA-256 hashing, though secure against classical computing attacks, is vulnerable to quantum algorithms like Shor’s, which can efficiently solve the mathematical problems underlying these cryptosystems.
Quantum attacks would allow an adversary to derive private keys swiftly, facilitating theft of bitcoins from vulnerable addresses. The challenge is urgent given estimates that viable quantum computers may appear within 3 to 5 years, much sooner than previously thought.
Industry efforts to secure Bitcoin against quantum threats
The U.S. National Institute of Standards and Technology has released post-quantum cryptography standards designed to resist quantum attacks. Bitcoin developers are exploring new address types and quantum-resistant signature schemes to safeguard the network.
Transitioning Bitcoin’s massive ecosystem to new cryptographic standards will require widespread consensus and technical upgrades, but preparatory work such as soft forks and wallet updates is underway to preempt the quantum threat.
As quantum computing technology advances, it remains an urgent priority for the cryptocurrency industry and regulatory bodies to ensure that Bitcoin remains secure and viable for the future.
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