Bitcoin, the world’s most prominent cryptocurrency, faces an unprecedented challenge from quantum computing, researchers warn. A potential quantum-computing hack could result in trillions of dollars in losses, severely disrupting cryptocurrency markets and spilling over into traditional financial systems.
This concern has gained urgency following Google’s announcement of a breakthrough with its Willow quantum-computing chip. The nascent technology has the potential to break the encryption that secures bitcoin, allowing hackers to steal funds from digital wallets. Such an attack could devastate bitcoin’s value and cast doubt on the security of the entire network.
“What you’ve got here is a time bomb waiting to explode, if and when someone gets that ability to develop quantum-computer hacking and decides to use that to target cryptocurrencies,” said Arthur Herman, senior fellow at the Hudson Institute, a Washington, D.C.-based think tank.
In a 2022 study, the Hudson Institute estimated that a quantum attack on bitcoin could result in losses exceeding $3 trillion, causing widespread financial turmoil and potentially triggering a global recession. With bitcoin now nearing $100,000 in value and gaining mainstream adoption, those potential losses have likely grown, Herman noted.
The risks extend beyond cryptocurrencies. Quantum computing could threaten traditional finance, as many online banking systems use similar encryption methods to bitcoin. However, bitcoin’s lack of regulatory oversight makes it a particularly attractive target for quantum thieves, experts warn.
“Bitcoin is going to get targeted like crazy,” said Skip Sanzeri, co-founder of QuSecure, a firm specializing in quantum-safe cybersecurity. “Banks have some regulation, some defense mechanisms, and the ability to cover their clients, whereas bitcoin is the Wild West. Your wallet’s not going to reimburse you if your bitcoin gets stolen.”
The vulnerability lies in the cryptographic methods that secure bitcoin. Current encryption relies on public keys, which are derived from two large prime numbers. While traditional computers would take an impractical amount of time to factor these numbers and uncover the private key, quantum computers could accomplish this task in minutes using a specialized algorithm developed in 1994.
In bitcoin’s early days, public keys were openly displayed, including those associated with the estimated one million coins belonging to its mysterious creator, Satoshi Nakamoto. Today, approximately 1.72 million bitcoins, valued at over $160 billion, remain stored in such exposed addresses, making them particularly susceptible to quantum hacks.
Securing bitcoin against quantum threats would require adopting quantum-resistant encryption, but such an overhaul would take years, experts say. Bitcoin’s decentralized nature complicates the process, as broad consensus among global network participants is needed for any changes.
“There is definitely a quantum apocalypse on the horizon at some point in the future, but that point is a sufficiently long time away that there is no need for panic,” said Emin Gün Sirer, founder of the Avalanche cryptocurrency.
Even after implementing quantum-proof upgrades, existing bitcoin holders would need to transfer their assets to quantum-resistant addresses, or risk losing their funds. As the clock ticks on quantum advancements, the cryptocurrency community faces mounting pressure to prepare for a radically different technological landscape.
