The cryptocurrency analysis company Presidio Bitcoin has released an in-depth technical document that investigates how quantum computing might affect the Bitcoin network.
This document highlights that, although Bitcoin is not facing an immediate threat, the window for implementing necessary safeguards is “limited to years, not decades.”
The primary concern outlined in the report is that a sufficiently advanced quantum computer could potentially extract private keys from public keys using Shor’s algorithm. It suggests that if a cryptographically robust quantum computer (CRQC) were available today, around one-third of the total supply—approximately 6.5 million $BTC—could be at risk.
A significant portion of this vulnerability arises from address reuse. The report indicates that nearly 4.5 million $BTC are held by major custodians who frequently use identical addresses for convenience. It asserts that this risk can be greatly mitigated simply by transitioning to new addresses without necessitating any changes to existing protocols.
The remaining structural risks originate from older pay-to-pubkey (P2PK) addresses, which account for about 1.72 million $BTC. A substantial number of these assets are presumed lost; however, it was noted that addresses displaying only public key hashes and with no transaction history are considered secure based on current data.
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The timeline for when quantum computers will achieve this capability remains unclear. Expert assessments suggest there’s roughly a 50% likelihood such technology will materialize between 2030 and 2035; nevertheless, considerable uncertainties persist regarding how scalable the required hardware will be.
The report also mentioned ongoing efforts within the Bitcoin community aimed at countering this potential threat. Developers are exploring ways to incorporate quantum-resistant signature systems through “soft forks,” with discussions on this topic making up about 5% of all communications in early 2024 and projected to rise to around 50% by early 2026.
Additonally, it was highlighted that there would be adequate network capacity available should a migration process become necessary. If approximately one-quarter of block space were allocated for such transitions, estimates suggest it would take roughly four days to transfer up to 90% of Bitcoin’s total value into new addresses.
*This does not constitute investment advice.