On February 8, CoinShares stated that while practical quantum computers may eventually emerge, their impact on Bitcoin currently represents a foreseeable engineering challenge rather than an imminent security crisis.
As quantum technology advances, discussions around potential “quantum vulnerabilities” in Bitcoin have intensified. CoinShares emphasized that the Bitcoin ecosystem still has sufficient time for technical upgrades and protocol adjustments, making the likelihood of short-term systemic disruption relatively low.
Technical Perspective: Theoretical Challenges to Signatures and Hash Functions
The report identifies two primary areas of theoretical quantum risk:
- Shor’s Algorithm: Could theoretically break ECDSA or Schnorr signatures and expose private keys
- Grover’s Algorithm: May theoretically reduce the security strength of SHA-256
- Potentially affected assets are mainly early P2PK addresses, totaling around 1.7 million BTC, or roughly 8% of total supply. CoinShares noted that widely circulated claims suggesting 25% of supply is at risk are significantly exaggerated, as many vulnerabilities could be mitigated through address migration and protocol updates.
Time Horizon: Real-Time Quantum Attacks Remain Highly Unrealistic
According to CoinShares:
- Long-term theoretical attack capabilities may emerge within the next 10 years
- However, real-time private key cracking within the mempool’s ~10-minute window remains unrealistic for decades
- Even under extreme scenarios, leaked private keys entering the market would likely total only around 10,000 BTC, limiting potential systemic price impact. Remaining at-risk assets are distributed across approximately 34,000 addresses, each averaging about 50 BTC, meaning even optimistic quantum breakthroughs would require decades for widespread exploitation.
Industry Response: Parallel Progress in Upgrades and Risk Monitoring
As quantum concerns gain attention, the industry is advancing on two fronts:
- Developing quantum-resistant signature algorithms
- Strengthening on-chain monitoring of high-risk addresses and legacy asset structures
- Some compliance-focused institutions have integrated Trustformer KYT and similar on-chain risk intelligence tools to classify and track potentially vulnerable addresses, offering continuous monitoring and risk alerts for exchanges and institutional participants.
Conclusion
Overall, quantum computing represents a long-term technological evolution challenge rather than a near-term systemic threat to Bitcoin. As cryptographic upgrades and security practices continue to mature, market participants should focus on realistic risk timelines rather than short-term panic driven by exaggerated narratives.