Bitcoin Faces Quantum Threat 25% Vulnerable

Jameson Lopp, CTO and co-founder of self-custody service Casa, proposed a significant change to Bitcoin’s software to address the potential threat posed by quantum computers. The proposal, co-authored by five other developers, aims to create incentives for Bitcoin owners to adopt cryptographically secure methods of storing the asset that are resistant to quantum attacks. The proposal states that failing to upgrade to a new address type would result in the loss of access to funds, turning quantum security into a private incentive.

Experts are increasingly concerned that quantum computers, once considered a distant threat, could be used within the next decade to reverse engineer wallets’ private keys. This could lead to a liquidation event where a large amount of Bitcoin is released into the market. Lopp emphasized the importance of the Bitcoin community coming together to find consensus on this issue.

Under the proposal, sending funds to quantum-vulnerable addresses would eventually be disallowed, encouraging the adoption of “post-quantum” Bitcoin address types. A subsequent phase would prevent quantum-vulnerable Bitcoin from being spent over a five-year timeline. An optional third phase would involve establishing a separate Bitcoin Improvement Proposal (BIP) to address the recovery of frozen Bitcoin in a quantum-safe manner.

Lopp’s initiative was unveiled alongside the Quantum Bitcoin Summit in San Francisco, an invitation-only event focused on mitigating quantum threats. Although the proposal affects only 25% of all Bitcoin, considered vulnerable by a recent study, its authors argue that an unprecedented threat requires unprecedented action. Notably, the vulnerable coins include 1 million Bitcoin believed to be owned by Satoshi Nakamoto, Bitcoin’s pseudonymous creator.

The proposal references BIP 360, an upgrade designed by Anduro Senior Protocol Engineer Hunter Beast that introduces address types leveraging post-quantum cryptography with varying levels of security. Lopp noted that quantum signature schemes are massive in terms of data size and would likely reignite debate over Bitcoin’s transaction throughput. Proposals are assigned a BIP number as they are published to the Bitcoin Core GitHub repository, where they are debated and tweaked before being implemented. This consensus-dependent process can move slowly.

Other proposals aimed at securing Bitcoin’s network have been introduced, including one by Marathon Director of Engineering Michael B. Casey. His proposal, dubbed “hourglass,” would limit the pace of transactions from ancient wallets that could one day become vulnerable. The proposal introduced on Tuesday highlights the existential threat that quantum attacks pose to Bitcoin’s cryptographic primitives, stating that a successful quantum attack would result in significant economic disruption and damage across the entire ecosystem.