Quantum Computing Threat: 32.7% of Bitcoin Supply at Risk, Coinbase Warns

TLDR:

• Approximately 6.51 million BTC remains vulnerable to quantum attacks due to exposed public keys onchain.
• Signature security presents the central threat while quantum mining remains a lower-priority concern.
• BlackRock explicitly listed quantum computing as a risk factor in its iShares Bitcoin Trust prospectus.
• Regulatory agencies are guiding critical infrastructure toward post-quantum cryptography by 2035.

Quantum computing developments are emerging as a structural risk to Bitcoin’s long-term security framework. David Duong, Coinbase’s global head of investment research, has raised concerns about the accelerating pace of quantum technology advancement. 

According to his analysis, approximately 32.7% of Bitcoin’s supply remains vulnerable to potential quantum attacks. 

The threat centers on exposed public keys rather than mining operations. BlackRock has acknowledged these concerns in regulatory filings for its iShares Bitcoin Trust.

One-Third of Bitcoin Supply Faces Exposure Risk

“Bitcoin’s long-term security may be entering a new regime as quantum computing advances,” Duong wrote on LinkedIn.

His research reveals that around 6.51 million BTC faces potential vulnerability as of block 900,000. These coins are at risk due to exposed public keys on the blockchain. 

The exposure stems from address reuse and specific script types that reveal public information. Pay-to-Public-Key, bare multisig, and Taproot outputs account for most vulnerable holdings.

The analysis distinguishes between two attack vectors on Bitcoin’s cryptographic security. Long-range attacks target outputs with already exposed public keys on the blockchain. 

Short-range attacks could intercept transactions during the spending process through mempool monitoring. Both scenarios become possible when cryptographically relevant quantum computers achieve operational status.

U.S. and EU regulatory agencies have begun preparing for this transition period. They are guiding critical infrastructure toward post-quantum cryptography adoption by 2035.

“Investors are becoming increasingly concerned that quantum computing risks may be approaching faster than previously thought,” Duong said. 

BlackRock referenced quantum computing as a risk factor in its May 2025 amended prospectus. The filing demonstrates growing institutional awareness of potential vulnerabilities in digital asset security.

Satoshi-era coins represent a notable subset of vulnerable legacy outputs. These early Bitcoin holdings used Pay-to-Public-Key script types that expose cryptographic information. The concentration of risk in these older outputs adds another dimension to the security challenge.

Signature Security Takes Priority Over Mining Concerns

Bitcoin’s cryptographic foundation relies on two primary systems for network security. The Elliptic Curve Digital Signature Algorithm protects transaction authorization through private key verification. 

SHA-256 provides the hashing function that enables proof-of-work mining operations. Each system faces distinct threats from quantum computing advancement.

Duong emphasizes that signature migration represents the more pressing concern for Bitcoin developers. “Quantum mining remains a lower-priority concern given current scaling constraints,” Duong wrote.

“Signature security is the central issue.” The economic threat from more efficient quantum mining could disrupt network incentives. However, the direct threat to wallet security demands immediate attention and preparation.

Quantum computers could theoretically derive private keys from exposed public key information. This capability would enable attackers to drain funds from vulnerable addresses across the network. 

The timeline for such capabilities remains uncertain among researchers. Some experts project four to five years until quantum systems reach sufficient power.

The broader cryptocurrency industry is beginning to price in these structural risks. Traditional financial systems also face quantum computing challenges due to centralized cryptographic dependencies. 

Open protocols like Bitcoin and Ethereum are actively exploring post-quantum cryptographic solutions. The migration toward quantum-resistant signatures represents a complex technical and coordination challenge for the network.