Almost 6 million bitcoins under threat from quantum computers

Glassnode analysts have discovered two types of bitcoin vulnerability to attacks by powerful quantum computers. The first one is a structural vulnerability that affects 1.92 million BTC, or 9.6% of the total issue. The addresses that reveal the public key by their design are at risk: early P2PK formats from the time of Satoshi Nakamoto, outdated multi-signature P2MS structures, as well as modern Taproot (P2TR). Despite improved privacy and efficiency, Taproot keys remain visible on the blockchain, which makes them vulnerable.

Bitcoins are protected by private keys, and public keys allow the network to verify transaction signatures. Today, it is virtually impossible to calculate a private key from a public key, but a quantum computer with the Shor’s algorithm is theoretically capable of doing so.

The second type is an operational vulnerability. It already covers 4.12 million BTC, or 20.6% of the total. It is caused by the reuse of addresses, partial spending of funds, or the specifics of asset storage. Out of this amount, about 1.66 million BTC — 8.3% of the issue and about 40% of operationally vulnerable coins — are associated with crypto exchanges.

The distribution of risks between platforms is strikingly different. Coinbase has only 5% of its funds in a vulnerable state, while Binance has 85%, and Bitfinex has 100%. Fidelity and CashApp show only 2% of vulnerability, while Grayscale has about 50%. Absolutely all Robinhood and WisdomTree bitcoins fall into the quantum threat zone. However, according to analysts, the state treasuries of the United States, the United Kingdom, El Salvador, and other countries are completely safe. Since 2018, the share of operationally secure bitcoins on exchanges has decreased from 55% to 45%.

Security experts emphasize that some of the vulnerabilities can be eliminated right now. To do this, it is enough to refuse to reuse addresses and switch to more secure standards, such as P2MR (Pay-to-Merkle-Root).

Earlier, researchers at Project Eleven warned that quantum computers could crack the cryptographic protection of bitcoin and other blockchains by 2033. At the end of April, independent researcher Giancarlo Lelli cracked the 15-bit elliptic curve key, the mathematical basis of digital signature schemes that secure bitcoin, ethereum, and most other blockchain networks, using a publicly available quantum computer.