Bitcoin Is Not at Quantum Risk: Here’s Why

Bitcoin is not under immediate quantum computing threat, according to a new CoinShares report that challenges widespread fears about the cryptocurrency's cryptographic security. 

While quantum computers theoretically pose risks to certain Bitcoin addresses, the practical danger remains distant and limited in scope. Only approximately 10,200 BTC could realistically be compromised in ways that might affect markets, and breaking Bitcoin's cryptography would require quantum systems 100,000 times more powerful than current technology.

What Makes Bitcoin Vulnerable to Quantum Attacks?

Bitcoin's security relies on two cryptographic elements that quantum computers could theoretically challenge. The first is the Elliptic Curve Digital Signature Algorithm (ECDSA), now supplemented by Schnorr signatures, which authorizes transactions using secp256k1. The second is SHA-256, a hash function used for mining and address protection.

Shor's algorithm, a quantum computing method, could potentially solve the discrete logarithm problem underlying elliptic curves. This would expose private keys if public keys become visible. However, this only threatens addresses where public keys are already revealed, primarily legacy Pay-to-Public-Key (P2PK) outputs.

Grover's algorithm could weaken SHA-256 by reducing its effective security from 256 bits to 128 bits. Despite this reduction, brute-force attacks remain computationally impractical. More importantly, quantum computing cannot alter Bitcoin's fixed 21 million supply cap or bypass proof-of-work requirements for block validation.

Modern address formats like Pay-to-Public-Key-Hash (P2PKH) and Pay-to-Script-Hash (P2SH) conceal public keys behind hashes, remaining secure until funds are spent. This means the vast majority of Bitcoin remains protected against quantum threats.

How Much Bitcoin Actually Faces Risk?

The CoinShares report, led by Head of Research Christopher Bendiksen, directly challenges previous assessments suggesting 20% to 50% of all Bitcoin is vulnerable. According to the analysis, approximately 1.6 million BTC (8% of total supply) sits in P2PK addresses with publicly visible keys.

However, the amount that could cause genuine market disruption is far smaller. Only 10,200 BTC sits in wallets that could be compromised rapidly enough to affect liquidity. These coins are distributed as follows:

Vulnerable Bitcoin breakdown:

• 7,000 BTC in wallets holding 100 to 1,000 BTC
• 3,230 BTC in wallets holding 1,000 to 10,000 BTC (worth $719.1 million at current prices)

The remaining 1.62 million BTC is spread across 32,607 individual addresses holding approximately 50 BTC each. Even under the most optimistic quantum computing advancement scenarios, cracking these addresses would take millennia. An attacker would need to compromise each address individually, making mass theft impractical even with advanced quantum systems.

Why Are We Nowhere Near Dangerous Territory?

Current quantum computing capabilities fall dramatically short of what would be needed to threaten Bitcoin. Breaking secp256k1 within one day would require a quantum computer with 13 million physical qubits, approximately 100,000 times more powerful than the largest systems today.

Google's latest quantum computer, Willow, operates with only 105 qubits. Breaking Bitcoin's cryptography within an hour would require a system 3 million times more powerful than current technology. Charles Guillemet, CTO of cybersecurity firm Ledger, explained to CoinShares that adding each additional qubit exponentially complicates maintaining system stability.

"To break current asymmetric cryptography, one would need something in the order of millions of qubits. Willow, Google's current computer, is 105 qubits. And as soon as you add one more qubit, it becomes exponentially more difficult to maintain the coherence system," Guillemet stated.

Estimates suggest cryptographically relevant quantum computers may not emerge until the 2030s or later. Short-term attacks requiring computations under 10 minutes remain infeasible for decades. Long-term attacks on P2PK addresses could become feasible within a decade, but these would still require years of computation per address.

Should Bitcoin Implement Aggressive Interventions Now?

The Bitcoin community remains divided over whether to implement quantum-resistant upgrades immediately or wait for clearer threats. Some prominent figures, including Strategy executive chairman Michael Saylor and Blockstream CEO Adam Back, argue that quantum fears are overblown and won't disrupt the network for decades.

Others, like Capriole Investments founder Charles Edwards, view quantum computing as a potential existential threat requiring immediate action. The CoinShares report argues against aggressive interventions like premature hard forks to burn vulnerable coins or implementing unvetted quantum-resistant cryptography.

Introducing new address formats before underlying cryptography is fully proven carries significant risks. Without practical quantum computers to test against, developers cannot verify that quantum-resistant solutions actually work. Premature implementation could waste development resources on inefficient or obsolete solutions.

Dr. Adam Back told CoinShares that Bitcoin can evolve defensively when needed. 

"Bitcoin can adopt post-quantum signatures. Schnorr signatures paved the way for more upgrades, and Bitcoin can continue evolving defensively," he explained. 

A soft fork could introduce quantum-resistant signatures, allowing users to migrate funds voluntarily while monitoring quantum computing progress.

Conclusion

Bitcoin faces limited and distant quantum computing threats. Current technology remains 100,000 times less powerful than what would be needed to break Bitcoin's cryptography, with relevant quantum systems unlikely to emerge for at least a decade. 

Only 10,200 BTC could be compromised quickly enough to affect markets, while the remaining vulnerable coins would take millennia to steal even under optimistic technological advancement scenarios. Bitcoin's architecture allows for defensive upgrades through soft forks when necessary, providing ample time for proactive adaptation without compromising the network's core principles of immutability and decentralization.

Resources

1. Report by CoinShares: Quantum vulnerability in Bitcoin: a manageable risk

2. Report by CoinDesk: Here's why the quantum threat for bitcoin may be smaller than people fear

3. Blog article by Classiq: Quantum Cryptography - Shor's Algorithm Explained

4. Blog article by Google: Meet Willow, our state-of-the-art quantum chip