CoinShares Research Indicates Only 10,000 Bitcoin Are Realistically Susceptible to Quantum Computing Threats

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TLDR

  • CoinShares calculates that merely 10,230 Bitcoin are susceptible to quantum attacks and economically viable to target, constituting a minuscule portion of the overall supply.
  • The majority of at-risk Bitcoin resides in wallets containing less than 100 BTC; each of these would require approximately 1,000 years to compromise, even assuming highly optimistic progress in quantum computing.
  • To breach Bitcoin’s cryptography, millions of fault-tolerant qubits would be necessary, whereas Google’s newest quantum computer, Willow, possesses only 105 qubits.
  • Approximately 1.7 million BTC (8% of the supply) is held in older P2PK addresses that have exposed public keys, though the bulk of these are in smaller wallets.
  • CoinShares contends that quantum threats represent a medium-to-long-term risk, likely emerging in the 2030s or beyond, rather than an immediate crisis demanding prompt intervention.

Digital asset management firm CoinShares has published fresh research disputing prevalent worries regarding quantum computers jeopardizing Bitcoin’s security. The company asserts that only a minor fraction of Bitcoin is stored in wallets that would be economically sensible to target with quantum technology.

Christopher Bendiksen, CoinShares’ lead for Bitcoin research, indicated that a mere 10,230 Bitcoin, from a total of 1.63 million potentially susceptible coins, are located in addresses that are economically rational to target. These particular coins feature publicly exposed cryptographic keys, which quantum computers could, in theory, leverage.

Approximately 7,000 Bitcoin are kept in wallets containing between 100 and 1,000 BTC. Roughly 3,230 Bitcoin are found in wallets holding 1,000 to 10,000 BTC. Based on current market rates, this amounts to an aggregate value of around $719 million.

The remaining 1.62 million susceptible Bitcoin are distributed among wallets each containing under 100 BTC. Bendiksen asserts that each of these smaller wallets would require roughly 1,000 years to compromise, even under the most favorable projections for quantum computing advancements.

The susceptible coins are held in unspent transaction output (UTXO) wallets. A significant number of these addresses originate from Bitcoin’s nascent period, often referred to as the Satoshi era.

How Quantum Computers Could Target Bitcoin

The hypothetical dangers stem from quantum algorithms such as Shor’s and Grover’s. Shor’s algorithm could potentially compromise Bitcoin’s elliptic-curve signatures, while Grover’s algorithm might diminish the strength of the SHA-256 hashing function.

CoinShares calculates that approximately 1.7 million BTC, which constitutes about 8% of the total supply, resides in older P2PK addresses. These legacy address formats feature exposed public keys. Contemporary Bitcoin addresses conceal keys until transactions occur.

To breach Bitcoin’s fundamental cryptography, millions of fault-tolerant qubits would be necessary. Google’s newest quantum computer, Willow, presently reaches only 105 qubits. Experts suggest that current quantum computers are between 10 and 100,000 times insufficiently powerful to present a genuine threat.

Andy Zhou, CEO of blockchain security company BlockSec, informed journalists that the quantum threat persists as a medium-to-long-term concern. He drew a parallel to the Y2K issue, which afforded several years for preparation.

The U.S. National Institute of Standards and Technology unveiled its initial post-quantum cryptography standards in 2024. These standards encompass multiple quantum-resistant encryption and signature algorithms prepared for implementation.

Researchers at CoinShares indicated that even with optimistic projections, the industry possesses ample time to get ready. They project that genuine quantum threats might not materialize until the 2030s or beyond.

Bitcoin Community Divided on Response

The Bitcoin community remains divided regarding the approach to potential quantum threats. Michael Saylor, executive chairman of Strategy, and Adam Back, CEO of Blockstream, consider quantum concerns exaggerated. They contend that the network will not experience disruption for several decades.

Charles Edwards, founder of Capriole Investments, holds an alternative perspective. He views quantum computing as an existential threat necessitating immediate network enhancements. Edwards proposes that Bitcoin’s value could increase once security measures are put in place.

Jonas Nick, a researcher at Blockstream, has put forward the adoption of post-quantum signatures as a possible remedy. CoinShares cautions that overly aggressive solutions come with inherent risks, such as software defects, compelled assumptions regarding inactive coins, and a potential undermining of Bitcoin’s neutrality.

The firm advocates for a gradual, voluntary migration as the favored strategy. Cameron Loo, COO of prediction market protocol functionSPACE, observed that quantum capabilities capable of threatening Bitcoin would also compromise encryption for banking, military communications, and the majority of digital infrastructure.

CoinShares underscored that quantum algorithms are incapable of modifying Bitcoin’s 21 million supply limit or circumventing its proof-of-work mechanism. The report concludes that Bitcoin is far from a perilous situation concerning quantum threats.