The Risk of Quantum Attacks on Bitcoin

If a quantum computer capable of disrupting modern encryption were deployed, the security of Bitcoin could be jeopardized without immediate detection.

“Everything would look like legitimate access,” David Carvalho, CEO of Naoris Protocol, remarked. “When you think you’re seeing a quantum computer out there, it’s already been in control for months.”

Currently, companies like IBM and Google are in a race to advance cryptographic techniques to counter this threat, as traditional Bitcoin security measures rely on decades-old encryption that is increasingly inadequate.

Bitcoin fundamentally uses the Elliptic Curve Digital Signature Algorithm (ECDSA), a system established in 1985 that permits users to prove ownership of coins using a private key while concealing the public key from the blockchain.

In theory, a potent quantum computer could reverse-engineer a private key from its public counterpart using Shor’s algorithm. This would enable hackers to access wallets that have exposed their public keys on the blockchain, especially early Bitcoin transactions.

“You wouldn’t even know” when the attack takes place, Carvalho said.

Bitcoin’s Vulnerabilities

Old wallets would be particularly at risk, according to Kapil Dhiman, CEO of Quranium.

“Satoshi’s coins would be sitting ducks. If those coins move, confidence in Bitcoin will shatter long before the system fails,” he shared.

If such an incident were to occur, the blockchain would remain active, processing transactions as usual, obscuring ownership swaps from users.

In contrast, while traditional finance channels have begun deploying post-quantum encryption strategies, the majority of major blockchains have not upgraded from their foundational technology of several decades ago.

“Traditional finance is actually ahead,” Carvalho noted. Unlike decentralized networks, centralized institutions have the advantage of coordinated upgrades.

With the threat of quantum computing looming, the cryptocurrency industry must collectively innovate and align with the upcoming standards to ensure a future-proof system.

For now, quantum threats remain hypothetical and Bitcoin’s encryption remains robust, as the academic and military communities continue to analyze and prepare for a landscape that may shift dramatically in the near future.