The crypto industry is finally taking the quantum computing threat to Bitcoin seriously

[Cached Stephen]

The cryptocurrency industry is starting to prepare for a threat that used to sound like science fiction, a sufficiently powerful quantum computer breaking the cryptography that secures digital wallets and transactions. Quantum computers process information using qubits that can represent multiple states at once rather than the simple 0s and 1s of classical computers, which is exactly what would let them crack the elliptic curve cryptography behind Bitcoin's roughly 2 trillion dollar market

Bitcoin is considered especially exposed because of its own 17 year transaction history. Older legacy addresses and any address that has been reused after spending have their public keys sitting permanently visible on the blockchain, and multiple research estimates now put somewhere between 25 and 35 percent of circulating Bitcoin, worth hundreds of billions of dollars, in these theoretically vulnerable wallets, including coins believed to belong to Satoshi Nakamoto

The good news is the gap between today's hardware and what would actually be needed remains large. Current quantum computers have somewhere around 1,000 to 1,500 physical qubits, while breaking Bitcoin's cryptography is estimated to need anywhere from several thousand to several hundred thousand qubits depending on the error correction approach used, though that required number has been shrinking as quantum error correction techniques keep improving

Developers are responding with BIP-360, a proposed quantum resistant address format that would replace exposed public keys with hash based signatures, though as of now it remains in draft status with no formal activation mechanism agreed on. There is also a harvest now, decrypt later concern, meaning an adversary could record exposed public keys today and simply wait for the hardware to catch up, which is why developers argue preparation cannot wait until quantum computers capable of the attack actually exist

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