Bitcoin News Today: Bitcoin Faces Quantum Risk as Hacked Legacy Addresses Expose 25%–30% of Holdings

A former hacker turned cybersecurity CEO has raised alarms about the potential vulnerability of Bitcoin to quantum computing, warning that the digital asset’s foundational cryptographic systems could be compromised by emerging quantum and AI-driven technologies. David Carvalho, CEO of Naoris Protocol, highlights a strategy known as “harvest now, decrypt later,” where adversaries collect encrypted Bitcoin transactions today, anticipating the arrival of quantum computers powerful enough to crack private keys and hijack funds in the future [1]. Carvalho’s background, including his teenage years as a hacker and his advisory roles with NATO and Fortune 500 companies, lends credibility to his concerns about the silent yet critical risks facing Bitcoin [1].

Bitcoin’s security is currently underpinned by two cryptographic algorithms: SHA-256, which ensures the integrity of transactions and the mining process, and ECDSA, which secures private keys [1]. While these systems are considered unbreakable by today’s classical computers, quantum algorithms like Shor’s could render them obsolete. In the hands of a sufficiently powerful quantum machine, a private key could be derived from a public key in a matter of minutes, enabling attacks before transactions even confirm [1]. The threat is not theoretical—state actors and cybercrime groups are already amassing encrypted data for potential decryption in the future [1].

The quantum risk is compounded by the role of AI in accelerating cryptographic vulnerabilities. AI tools could identify weaknesses in blockchain security, while quantum computers provide the brute force to exploit them, potentially bringing forward the timeline for a critical breakdown in Bitcoin’s current cryptographic model [1]. Already, an estimated 25%–30% of all Bitcoin is stored in legacy address types like P2PK or reused P2PKH, which expose public keys and make them susceptible to quantum attacks once the technology matures [1].

Efforts are underway to mitigate this risk. Initiatives such as BIP-360, which introduces quantum-resistant signature schemes, and post-quantum infrastructure platforms like Naoris Protocol, which integrates quantum-resistant blockchain security into transaction layers, represent steps toward safeguarding Bitcoin against future quantum threats [1]. Similarly, STARK-based zero-knowledge rollups are being explored as a quantum-safe alternative to ECDSA [1]. However, Bitcoin’s decentralized nature poses a challenge to widespread and rapid adoption of these upgrades, requiring consensus among miners, node operators, and users.

Despite these efforts, some industry figures remain skeptical. Michael Saylor, executive chairman of MicroStrategy, has dismissed the quantum threat as exaggerated, calling it a “quantum marketing gimmick” and asserting that Bitcoin can be upgraded if necessary [1]. Experts, however, tend to view the risk as real but distant, with estimates ranging from the early 2030s to the 2040s. While panic is unwarranted, proactive preparation is widely seen as essential. A coordinated and timely transition to post-quantum cryptography could ensure a smooth upgrade, whereas delay risks a more chaotic and disruptive outcome.

Carvalho warns that a quantum threat to Bitcoin will not announce itself through dramatic public exploits, but rather through a slow erosion of trust and integrity in the network. Missing transactions, unexplained fund diversions, and subtly altered consensus rules could quietly undermine confidence in Bitcoin adoption long before anyone recognizes the attack for what it is [1]. The challenge now is not only in developing quantum-resistant solutions but also in ensuring that the global Bitcoin community acts swiftly to implement them before the transition window closes.

Source: [1] Why a hacker-turned-CEO believes quantum tech could break Bitcoin (https://cointelegraph.com/explained/why-a-hacker-turned-ceo-believes-quantum-tech-could-break-bitcoin?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound)