.png)
.png)
.png)
Quantum vs. Bitcoin: The New Crypto FUD?
Dec. 14, 2024. 5 mins. read.
3 Interactions
Google's Willow quantum chip has reignited concerns about cryptocurrency security. Here's what quantum computing means for Bitcoin's future. How soon will quantum threats become real?
Introduction
If you’ve been in crypto for a while, you’ll know that some fresh new FUD is always around the corner. Now that Bitcoin has finally cracked that magical $100k milestone and the USA has a crypto-friendly government incoming, could quantum computing be the new bogeyman?
Google’s New Math
On Monday, Google unveiled Willow, a quantum processor that completes certain calculations in five minutes. The same task would take today’s fastest supercomputer longer than the universe has existed. This leap in quantum computing has Bitcoin holders and other crypto investors concerned about the encryption that secures their digital fortunes, particularly the dormant wallets holding billions in early Bitcoin.
The numbers behind Willow tell a striking story. Traditional computers process information in bits – ones and zeros. Quantum computers use qubits, which can represent multiple states simultaneously. Willow’s 105 qubits might seem modest, but they’ve achieved something remarkable: stable error correction that improves exponentially as the system scales.
For cryptographers and Bitcoin developers, this matters a lot. Quantum computers with enough stable qubits could theoretically break the encryption that protects Bitcoin wallets.
Google’s Quantum AI lead, Hartmut Neven, describes Willow’s achievement in almost mystical terms, suggesting the computation “occurs in many parallel universes.” Behind this dramatic language lies a practical breakthrough: the ability to maintain quantum states long enough to perform meaningful calculations.
A Numbers Game: Your Bitcoin Is (Probably) Safe
Kevin Rose, a former Google product manager, puts it bluntly: cracking Bitcoin’s current encryption standard would require 13 million qubits. Willow has 105. That’s like trying to breach a bank vault with a butter knife.
To generate addresses, Bitcoin takes a public key, and performs a cryptographic computation called hashing on it twice. Rose’s assurances are about the difficulty of computing a full public key from the Bitcoin address.
However, once the full public key is known, computing the private key that unlocks the money is a much easier quantum computation.
This leaves one corner of the Bitcoin network under genuine quantum risk. The oldest Bitcoin addresses used a simpler security format called P2PK, which left full public keys exposed on the blockchain.
The distinction between P2PK and modern P2PKH (Pay to Public Key Hash) addresses marks a crucial security evolution. P2PKH addresses only expose their public keys when spending coins, giving them significant protection against quantum attacks. Even if quantum computers could break the encryption, they’d need to do so in the brief window between transaction broadcast and confirmation.
Satoshi’s Time Bomb
This vulnerability creates an extraordinary situation. Roughly one million Bitcoin – worth about $102 billion at current prices – sits in these early addresses. Many believe these coins belong to Bitcoin’s pseudonymous creator Satoshi Nakamoto. They haven’t moved in over a decade.
Some developers argue for preëmptive action: modifying Bitcoin’s code to freeze these vulnerable coins before quantum computers can crack them. It’s technically possible through a network fork. But others see this as heresy, violating Bitcoin’s core promise of immutability.
The technical debate centers on implementation methods. A soft fork could make specific UTXOs unspendable while maintaining backward compatibility. A hard fork would require network-wide consensus but could implement more comprehensive protections. Both approaches face significant political and philosophical hurdles within the Bitcoin community.
The Ethereum Answer
While Bitcoin debates, Ethereum makes moves. Vitalik Buterin, Ethereum’s co-founder, has outlined a straightforward quantum defense: a hard fork requiring all users to upgrade their security. No frozen funds, no philosophical crisis – just a mandatory update when quantum computers get close enough.
Researchers of post-quantum cryptography are developing new encryption algorithms that quantum computers can’t crack. Several cryptocurrencies are already testing these methods, preparing for a quantum-secure future.
The technical approaches vary: lattice-based cryptography, hash-based signatures, and multivariate cryptography each offer potential quantum resistance. Some projects combine multiple methods, creating layered defenses against both classical and quantum attacks.
Five Minutes vs. The Universe
Google’s claim about Willow’s five-minute calculation needs context. The chip solved a specific mathematical problem perfectly suited to quantum computing. Most computing tasks – including those involved in cryptocurrency mining and transactions – won’t benefit from this quantum hardware.
The problem Willow solved involves sampling from random quantum circuits. While impressive, this task was carefully chosen to demonstrate quantum supremacy. Breaking cryptocurrency encryption requires solving entirely different mathematical problems: factoring large numbers and computing discrete logarithms.
Google’s own quantum roadmap shows Willow reaching only milestone two of six. The path to 13 million stable qubits stretches far into the future. Yet quantum development has repeatedly outpaced predictions.
Beyond the Public Keys
Modern cryptocurrency security involves multiple layers. Even if quantum computers eventually crack public key encryption, they’ll face other barriers. Bitcoin’s proof-of-work system, hash functions, and network consensus mechanisms don’t rely solely on the algorithms quantum computers are good at cracking.
The cryptocurrency community has so far been pretty adaptable. When SHA-1 encryption showed weaknesses, Bitcoin developers had already moved to stronger alternatives. Similar foresight guides quantum defense planning.
Hash functions, particularly SHA-256 used in Bitcoin, show strong resistance to quantum attacks. Grover’s algorithm, a quantum method for searching unstructured databases, could theoretically speed up mining by finding hash collisions faster. But even this would only offer a quadratic speedup, requiring significant modifications to Bitcoin’s mining difficulty adjustment.
Technical Defenses Emerging
Cryptocurrency developers aren’t waiting for quantum computers to catch up. Teams across the ecosystem are implementing various defensive measures. Digital signature schemes like SPHINCS+ offer quantum resistance through hash-based signatures. Unlike current elliptic curve signatures, these methods rely on the security of hash functions, which better resist quantum attacks.
Some projects explore zero-knowledge proofs and other cryptographic primitives that maintain security even against quantum adversaries. These techniques could protect not just funds, but also transaction metadata and smart contract interactions.
Adapting the Future
Here’s the reality: quantum computing poses no immediate threat to cryptocurrency. But its steady advance demands attention. The solutions already exist in theory: they are post-quantum cryptography, network upgrades, and possibly even blockchain forks. The challenge lies in implementing them without disrupting the trillion-dollar cryptocurrency ecosystem.
The next decade will transform both quantum computing and cryptocurrency. Willow’s 105 qubits will seem quaint compared to future processors. Bitcoin’s security will evolve to match these advances. The real question isn’t whether cryptocurrency can survive quantum computing – it’s how effectively the technology will adapt.
Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter.
1 Comments
One thought on “Quantum vs. Bitcoin: The New Crypto FUD?”
These are questions that force ecosystems to make some collective decisions. Too few of them are building decentralized governance structures that would enable communities to efficiently converge into effective decisions that maintain the ecosystem's integrity and prevent undesired forks. If any living (dynamic) system wants to survive into indefinite future it has to have capability to respond to stress coming from its environment.
Anyway, Willow is amazingly great progress but, as the article emphasizes, it is not an imminent threat to any current technical implementation in the blockchain industry.
🟨 😴 😡 ❌ 🤮 💩