Experts Warn of Potential Threat to Bitcoin and Financial Markets
Bitcoin, the world’s leading cryptocurrency, is facing a long-term but serious threat from the rise of quantum computing, according to researchers and industry experts. Recent advancements in the nascent technology, particularly Google’s claim of a breakthrough with its Willow quantum-computing chip, have reignited fears about its potential to undermine Bitcoin’s cryptographic security.
Quantum computers, unlike traditional machines, use qubits—subatomic particles that exist in multiple states simultaneously—enabling them to process tasks at speeds unattainable by conventional computers. This capability could one day allow hackers to crack the encryption that secures Bitcoin transactions and wallets, jeopardizing the integrity of the cryptocurrency network.
“A time bomb is waiting to explode if and when someone develops quantum-computer hacking capabilities and targets cryptocurrencies,” said Arthur Herman, a senior fellow at the Washington-based Hudson Institute.
A 2022 Hudson Institute study estimated that a quantum hack on Bitcoin could lead to over $3 trillion in losses across the crypto and traditional financial markets, triggering a global recession. The risks have only grown as Bitcoin’s value approaches $100,000, solidifying its position as a mainstream investment asset.
Vulnerabilities in Bitcoin’s Cryptography
Bitcoin’s security relies on public-key cryptography, a system that involves generating private keys from public keys using complex mathematical operations. These operations are so computationally intensive that they are considered practically unbreakable by standard computers. However, quantum computers, using algorithms like the one devised by U.S. mathematician Peter Shor in 1994, could perform these calculations in minutes, exposing private keys and enabling the theft of Bitcoin and other digital assets.
“Bitcoin is going to get targeted like crazy,” warned Skip Sanzeri, co-founder of QuSecure, a quantum-safe cybersecurity startup. “Banks have regulations and defense mechanisms to protect their clients, but Bitcoin operates in a Wild West environment. If your wallet gets hacked, no one is reimbursing you.”
Particularly vulnerable are Bitcoin wallets from its early days, which stored funds in addresses with exposed public keys. This includes the estimated 1 million bitcoins attributed to the cryptocurrency’s mysterious creator, Satoshi Nakamoto. According to Galaxy Digital, 1.72 million bitcoins—valued at over $160 billion—are held in such addresses.
Time to Prepare but Challenges Remain
Despite the looming threat, experts believe there is still time to address Bitcoin’s vulnerabilities. “There is definitely a quantum apocalypse on the horizon at some point in the future, but that point is sufficiently far away that there is no need for panic,” said Emin Gün Sirer, founder of the Avalanche cryptocurrency.
Securing Bitcoin against quantum attacks would involve adopting quantum-resistant encryption methods. However, such a transition would require broad consensus among Bitcoin’s decentralized community, a process that has historically been slow and contentious. Additionally, existing Bitcoin holders would need to move their funds into quantum-secure wallets, a step that requires proactive participation from millions of users globally.
While the timeline for a quantum-powered attack remains uncertain, the conversation highlights the urgency for the cryptocurrency industry to future-proof its systems and safeguard its billions in digital assets.
