Bitcoin Quantum Risk Affects Only 10,200 BTC, CoinShares Finds

This article was first published on Deythere.

A fresh report from CoinShares has clarified that the risk posed by quantum computing on Bitcoin is much lower than some recent estimates indicate. The study found that only a small percentage of Bitcoin’s total supply is actually at risk of quantum attacks in the future, and even then such threats are still decades away with current technology. 

The findings contradict previous claims that a large portion of the Bitcoin supply might be susceptible to quantum based cryptographic attacks.

Bitcoin Quantum Risk: Not Much of an Open Window

Bitcoin’s use of elliptic-curve digital signature algorithm (ECDSA, and Schnorr) for securing private keys and verifying transactions is one main focus in the discussion. When quantum computers are sufficiently developed, they could exploit public keys which are exposed to derive their corresponding private keys and hence compromise funds.

However, CoinShares’ research identifies two very important arguments that limit this risk.

First, the overall Bitcoin supply at risk from exposed public keys is less than commonly reported figures. As per the report, about 1.6 million BTC, or about 8 percent of total supply, lives in older addresses with a Pay-to-Public-Key (P2PK) address format, meaning the public key is visible on the blockchain. 

In comparison, most of the modern address types (e.g. Pay-to-PubKey-Hash (P2PKH), Pay-to-Witness-PubKey-Hash (P2WPKH)) do not leak public keys until coins are spent and so offer solid protection in modern times.

Second, among this 1.6 million BTC, there is only 10,200 BTC in sufficiently large unspent transaction outputs (UTXOs) that if taken over could make a meaningful dent in market dynamics. That’s less than 0.1% of the entire Bitcoin supply, and even these holdings are spread across numerous addresses averaging around 50 BTC each, making concentrated attack scenarios unlikely even in extreme situations. 

Technology Timeline and Practical Limits

While quantum computers are evolving, the implementation of a practical threat against the cryptographic foundation of Bitcoin remains decades in the future. Coinshares notes that it would take a computer many orders of magnitude more powerful and  greater than the largest quantum computers that exist today.

For example, breaking a public key on a single day would require a machine with tens of millions of physical qubits, many orders of magnitude beyond what current machines (like Google’s “Willow,” which has about 105 qubits) are capable of. 

The exponential scaling challenge for quantum qubit coherence makes substantial progress unlikely in the next years or decades, giving the Bitcoin ecosystem time to adopt. 

This practical discrepancy between theoretical risk and possible damage makes the Bitcoin quantum risk more of a long-term engineering problem, rather than an immediate emergency. 

Industry watchers as well as researchers from CoinShares agree that existing quantum hardware is still not able to carry out the necessary calculations at any meaningful levels. 

Market and Institutional Responses

The institutional investment space has had several discussions over how quantum computing could impact Bitcoin’s credentials as an asset and long-term store of value. 

Previous work by other teams, like Chaincode Labs, had projected a far larger amount of Bitcoin’s supply susceptible to quantum attack and some institutional strategists have included quantum risk in their portfolio allocations. 

For example, Christopher Wood from Jefferies reportedly decreased his position in Bitcoin over such concerns. 

But the CoinShares report challenges these higher-end vulnerability estimates as “overblown” and based on aggregated categories that mix various practical risks. By distinguishing between old address formats and actual disrupted flows, the new analysis points out that the larger part of Bitcoin ecosystem is unlikely to face systemic shocks even under aggressive quantum development. 

Some industry leaders also weigh in. Ledger CTO Charles Guillemet discussed the technical challenges of quantum computers, saying that just scaling qubits introduces exponential complexity to maintain coherence, a big obstacle to rapid progress. 

Upgrade Paths and Community Discussions

Even though the immediate threat level is comparatively small, Bitcoin developers and ecosystem proponents are already thinking of ongoing defense responses. 

A move to quantum-resistant cryptographic standards such as Post-Quantum Cryptography (PQC) may enable future address formats where security remains even against sufficiently advanced quantum hardware.

CoinShares advises against being overly hasty in rolling out unproven PQC deployments, though, as deploying too early could bring bugs or other unwanted effects if code was not thoroughly tested. 

Instead, a gradual and thoroughly tested migration path is preferable, giving developers a lot of time to do well-performing upgrades that don’t disrupt network stability. 

The governance debate includes viewpoints about whether dormant or lost coins currently held in old formats should be retired or migrated. Some voices in the crypto community advocate for more hard-line measures, while others assert the need to respect Bitcoin’s property rights and ethics of decentralization. 

Conclusion

Bitcoin quantum risk appears to be very far off given that only a miniscule portion of the supply (roughly 10,200 BTC) is likely susceptible to potential future quantum attacks under the existing cryptographic schemes. 

The report from CoinShares drives home the point that there is a long path toward meaningful quantum attacks, providing ample time for orderly and carefully considered transitions to quantum-safe technologies in Bitcoin if and when they become necessary.

By defining the level of exposure, and differentiating between theoretical risk and practical harm, this analysis changes the dialogue from hypothetical concerns to rational engineering response. 

Glossary

Bitcoin Quantum risk: a hypothetical possibility where sophisticated quantum computers are able to hack away the cryptographic signatures on Bitcoin private keys and granting unauthorized access to funds.

ECDSA/Schnorr: cryptographic signature scheme which are used to sign Bitcoin transactions, verify and validate the integrity of the data.

UTXO (Unspent Transaction Output): a piece of Bitcoin that can be spent in the future, and it’s associated with cryptographic keys.

Public key exposure: when an address’s public key is being shown on chain, most commonly as part of a transaction, which could make it vulnerable to quantum attacks in the distant future.

Post-Quantum Cryptography (PQC): cryptography techniques designed to resist attacks by Quantum Computers.

Frequently Asked Questions About Bitcoin Quantum Risk

Does quantum computing threaten Bitcoin already?

No. Current quantum computers are nowhere near powerful enough to pose an imminent threat to the cryptographic security of Bitcoin, according to CoinShares. 

What portion of Bitcoin is actually exposed to quantum risks?

Only about 10,200 BTC are held in large addresses which places them at risk to potential quantum computing attacks that could compromise their funds, that’s less than 0.1% of the total supply. 

Which Bitcoin addresses are most vulnerable?

Old Pay-to-Public-Key (P2PK) addresses reveal public keys to the blockchain and are the main afflicted type. Public keys are not disclosed for modern address types until coins are spent. 

Is Bitcoin in the process of becoming quantum resistant?

Yes. The ecosystem is making research on gradual well-studied moves to post-quantum crypto standards for future risks. 

Is Bitcoin about to be broken by quantum computing?

No Practical quantum attacks are not expected in the next couple of decades, and common understanding is that the threat timeline leaves ample space to work on defense usability.

References

The Block
Coinfomania
bingx
Decrypt