The looming threat of quantum computing is casting a shadow over Bitcoin, influencing its price and capital flow, according to industry executives. While the extent and immediacy of this threat are debated, the anxiety surrounding it is palpable within the crypto community.
The core concern lies in quantum computers' potential to break the cryptographic algorithms that secure Bitcoin transactions. Bitcoin relies on Elliptic Curve Digital Signature Algorithm (ECDSA) and SHA-256. Experts fear that quantum computers could utilize Shor's algorithm to derive private keys from public keys, allowing attackers to steal coins. Grover's algorithm could also reduce the effort needed to crack SHA-256.
Approximately 25% of the total Bitcoin supply, or about 6.5 million BTC, is estimated to be vulnerable to quantum attacks. These are primarily coins held in older addresses where public keys are already exposed on the blockchain. A "harvest now, decrypt later" strategy is possible, where attackers store encrypted data now, awaiting future quantum computers to decrypt it.
The debate centers not on if quantum computing poses a threat, but when and whether Bitcoin is adapting quickly enough. Capriole founder Charles Edwards predicts that without quantum resistance by 2028, Bitcoin's price could plummet below $50,000. He urges for a solution by 2026, suggesting a major bear market might be necessary to spur crucial network upgrades.
However, some argue that the quantum threat is overblown. They contend that quantum computers capable of breaking Bitcoin's encryption are still decades away. Physicist Sabine Hossenfelder estimates that practical applications of quantum computing are about 1 million qubits away. Google's latest quantum processor, Willow, has just 105 qubits.
Michael Saylor, a Bitcoin advocate, believes quantum computing will ultimately strengthen Bitcoin. He suggests quantum-resistant upgrades could enhance the network. Similarly, Grayscale Investments anticipates Bitcoin reaching a new all-time high in the first half of 2026, despite the potential impact of quantum computing.
Bitcoin developers are actively working on solutions, including transitioning to post-quantum cryptography. This involves adopting new cryptographic algorithms inherently resistant to quantum attacks. Bitcoin could upgrade from SHA-256 to SHA-512 if needed.
The situation has also sparked discussions about potentially freezing lost or abandoned coins to reduce supply and enhance security. This proposal aims to prevent the use of unsecure signatures, giving holders time to transition to quantum-secure private keys.
Ultimately, the long-term impact of quantum computing on Bitcoin remains uncertain. The anxiety surrounding this potential threat, however, is already influencing market sentiment and prompting discussions about the cryptocurrency's future security and adaptability.
