Crypto
Bitcoin Faces Quantum Computing Threat: 30% at Risk
Bitcoin Faces Long-Term Quantum Threat: Industry Prepares as 30% of Supply at Risk
Industry leaders are raising urgent alarms about a quantum computing threat to Bitcoin’s security, with Coinbase warning that quantum computers capable of breaking Bitcoin’s cryptography could emerge, presenting a challenge that may require a multi-year upgrade process. About 30% of Bitcoin’s supply already sits in addresses with visible public keys, according to Glassnode data, making those holdings vulnerable once a quantum threat materializes.
The Technical Risk
Bitcoin wallets are protected by digital signatures that a powerful enough quantum computer could, in theory, break. A Google study in March suggested this may take far fewer qubits than once thought, and Google’s March white paper estimated that breaking Bitcoin’s security would require roughly 1,200-1,450 logical qubits.
Timeline Uncertainty
Self-custody platform Casa co-founder and chief security officer Jameson Lopp believes it could take at least another decade before a quantum computer capable of decoding a Bitcoin public key becomes a reality. However, Google’s Willow chip, announced in December 2024, has 105 qubits, while IBM has reported 70 logical qubits and QuEra Computing has executed algorithms with up to 96 logical qubits. IBM’s hardware roadmaps show the company targeting 200 logical qubits by 2029 and 2,000 by 2033.
The Satoshi Nakamoto Problem
Satoshi Nakamoto is estimated to have mined around 1.1 million BTC in Bitcoin’s first year, with those coins never having moved, worth roughly £91.5 billion at current prices. Coinbase flagged a separate governance and engineering problem: coins that cannot or will not move, including coins in early address types, coins in reused addresses, coins with lost keys and Satoshi-era holdings.
How A Fix Would Work
Making Bitcoin quantum-resistant requires replacing the digital signatures used to authorize transactions — a challenging, complex, and multi-year process. Coinbase backs a phased fix in which the same funds could be spent with either a current key or a quantum-resistant one, pointing to BIP-360 (which already had a test network running earlier in the year) and a design called P2TRv2 as flexible options.
Institutional Preparation
Coinbase confirmed it holds about 5% of all Bitcoin in existence as a custodian, and is preparing its own systems, holding discussions with Bitcoin developers, and participating in the Bitcoin Security Consortium. The exchange emphasised that the move would be “a challenging, complex, and multi-year process”.
For UK retail traders, the key takeaway is that quantum threats to Bitcoin remain distant but are now being treated with seriousness by major institutions. Staying informed about proposed upgrades and understanding whether your holdings sit in vulnerable address types will be important as this conversation evolves.
Main picture: Photo by Michael Förtsch on Unsplash
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