New advancements in quantum computing pose a significant threat to Bitcoin’s security, with experts predicting that within five years, these powerful machines could be capable of stealing Bitcoin directly from users’ wallets.
The unveiling of Google’s new quantum computing chip, Willow, has intensified these concerns. Willow represents a 56% improvement over Google’s previous chip, accelerating the timeline for quantum computers to break the encryption protecting the $3.8 trillion cryptocurrency industry.
Pierre-Luc Dallaire-Demers, a scientist-in-residence at the University of Calgary and founder of a quantum-resistant crypto infrastructure company, warns, “We are about five years away from commercial quantum computers being able to break the elliptic curve keys (ECDSA 256) that secure Bitcoin wallets.” This prediction echoes similar estimations from other researchers, placing the threat within the next five to ten years.
ECDSA 256, the encryption used to secure Bitcoin addresses and sign transactions, is vulnerable to Shor’s algorithm. This quantum algorithm efficiently factors large numbers, potentially allowing hackers to crack the private keys guarding crypto wallets.
While Bitcoin’s other encryption method, SHA-256, used for mining and adding blocks to the network, could be strengthened relatively easily, defending against Shor’s algorithm requires a fundamental overhaul of Bitcoin’s cryptography.
Initially, older “Pay-To-Public-Key” (P2PK) wallets created before 2012 are the most vulnerable. Dallaire-Demers urges users with funds in these wallets to “immediately move their assets” to modern wallets, which offer better protection by obscuring the public key.
However, even modern wallets will eventually be at risk as quantum computing technology advances. This raises concerns about the fate of the estimated 1.1 million Bitcoin (currently worth $113 billion) held in wallets belonging to Bitcoin’s enigmatic creator, Satoshi Nakamoto. These wallets are of the older, vulnerable type, and Nakamoto’s 14-year silence leaves their future uncertain.
Charles Edwards, founder of Bitcoin and digital asset hedge fund Capriole Investments, emphasizes the urgency of the situation: “QC will break Bitcoin if we do not upgrade it. The threat is real.”
Projects like the Quantum Resistant Ledger estimate that upgrading Bitcoin to withstand quantum attacks would require at least 76 days of continuous processing time on the network. While Dallaire-Demers suggests that such an upgrade isn’t immediately necessary, Edwards argues that the rapid advancements in quantum computing seen in 2024 alone suggest the need for quantum resistance might arrive sooner than expected.
