In this piece, we’ll explore whether Quantum computing poses an existential threat to Bitcoin’s cryptographic security, how the community is mobilising to mitigate the risks, and why the quantum threat is first and foremost a social consensus issue.
And yes, in order to deliver on the promise of this essay’s title, I promise to keep everything in plain English, a quantum and Bitcoin 101 of sorts, that will have to rely on gross oversimplifications. But that’s why you’re here. However, if you’d like to deep dive into this fascinating issue, you can always reach out to me directly for a more comprehensive explanation (as always, the devil lies in the details!).
This essay is also certified GFAIS (“Guaranteed Free of AI Slop”).
- The problem in a nutshell: Bad people with powerful computers could steal your Bitcoin
- The good news:We have a solution, and despite what you’ve been told, Bitcoin developers are already working on implementing it
- The bad news: Bitcoin is code, but Bitcoin governance works like your state assembly: no one can agree on anything, and everything takes 5 years.
- UTXO’s two cents:It will be messy, but in the end we’ll be fine.
The problem in a nutshell: Bad people with powerful computers could steal your Bitcoin.
Caveat: Threatening quantum computers do not currently exist and may never become strong enough to break the cryptography used in bitcoin.
One of the main security features of Bitcoin is elliptic curve cryptography. In a nutshell, it means that no one is currently capable of stealing your bitcoins. Bitcoin wallets work in a simple way. You have a public key that works like your bank details. If you need to receive BTC, you send those details to the sender and wait for the network to confirm the transaction. There is no risk associated with anyone knowing those details. However, if someone had access to your bank account credentials (password, biometrics, etc…), then they could take your money. Bitcoin works in the same way, and we call it a private key — that’s the part protected by cryptography.
Now imagine a computer so powerful that it could “break” that cryptography; that’s the quantum problem. For that to happen, a lot of technological progress and innovation has to happen, but the overall pace of improvement is cause for concern, i.e., quantum computers could become a reality much earlier than anyone had previously expected.
Obviously, aside from the much bigger problems that could arise from quantum computers (like a foreign entity accessing nuclear codes…), this would be a major crisis for Bitcoin that would call into question the claim that properly secured bitcoin is totally resistant to seizure or theft.
This is why you’ve heard so much about Bitcoin and Quantum Computing recently. Are we sleepwalking towards a catastrophic crisis for the digital asset ecosystem?
The good news: The problem (if it ever materializes) has at least one solution, and despite what you’ve been told, Bitcoin developers are already working on implementing it.
If you’re interested in actually understanding that solution, I recommend reading the official proposal here: https://github.com/bitcoin/bips/blob/master/bip-0360.mediawiki
For the sake of simplicity, we’ll assume that this change to Bitcoin, if implemented, would completely protect us from quantum computers (in practice, it only protects you for a certain type of attack, not the full range of attacks).
From there, the only thing you’d have to do is migrate your bitcoin to this new type of address, and forget that quantum computers even exist.
But think about it, is there a major flaw in my previous sentence? It assumes EVERYONE still has access to their Bitcoin and is willing to make that migration. That leaves a few MILLION bitcoin up for grabs (~1.7M coins are currently stored in quantum-vulnerable P2PK addresses). Depending on your perspective, this would not necessarily be an existential threat to the survival of the network but it could seriously erode confidence in the protocol.
Therefore, from now on, every time you hear about the quantum problem for Bitcoin, that’s where your mind should go to: How can we ensure that the quantum theft of lost coins is impossible? That’s where the bad news comes in.
The bad news: Bitcoin is code, but Bitcoin governance works like your state assembly: no one can agree on anything, and everything takes 5 years.
How can we ensure that the quantum theft of lost coins is impossible? To that question, Bitcoin developers have found two possible answers, both of which are equally bad. One solution would solve the problem with a single line of code, but would fundamentally call into question Bitcoin’s censorship resistance. The other solution would have a sustained negative impact on the price of Bitcoin by creating a constant “supply shock”.
Bad Solution 1:We burn the quantum-vulnerable coins. Imagine a line of code in Bitcoin that would say something like “if you haven’t transitioned/moved your BTC to a quantum-resistant address by this date, your BTC will no longer be spendable”. (A side note on the difference in definitions between Effective and Efficient. An effective way to kill a fly in your house is to burn the house to the ground, mission accomplished. An efficient way to kill the fly is to use fly spray.) Burning quantum vulnerable coins is the effective way of dealing with the problem. However, just like having to rebuild your house from the ground up, taking an arbitrary decision to burn other people’s bitcoins would set a very dangerous precedent for a protocol whose narrative rests entirely on censorship resistance and neutrality — no matter how “in good faith” we’d be acting. If we decide to burn coins because of “quantum computers” why not burn the coins of political dissidents? I’m playing devil’s advocate here, but it just goes to show how complicated and burdened by narrative expectations “Bad Solution 1” can be.
(Update as I’m writing this article:the contentious precedent set by Bad solution 1 could be mitigated by clever ways to ensure that ONLY the truly lost coins would be burned, and that even if some Bitcoin OGs are not willing to dox themselves as “active” on the blockchain, several workarounds could be used for them to still preserve ownership of their coins post-quantum migration. Bad Solution 1 could turn out to be Decent Solution 1).
Bad Solution 2: We let quantum thieves steal the bitcoins, but we restrict the flow of how many coins can be stolen (and therefore sold) at once. This proposal is called Hourglass (bip-hourglass-v2) and was written by the same author as BIP-360 (the solution to the quantum problem).
Hourglass basically says, “If you want to move BTC from these old and vulnerable addresses, fine, but you can only move one batch of coins per block and potentially no more than 1 BTC” (Again, this is a gross oversimplification — read the full proposal if you are interested).
This is a clever idea because it would force quantum thieves to reckon with the inescapable power of game theory. Moving 1 million BTC at a pace of 1 BTC per block would take a long, very long time (~19 years to be precise). Therefore, quantum attackers would be incentivized to extract as much value as possible early on, and the only way to get your transactions confirmed faster by the Bitcoin network is to pay high fees, potentially so high that the resulting amount would dramatically reduce the sum of BTC that ends up in the hands of malicious actors.
This proposal would also give some time to the market to adjust to this new reality, and would have the benefit of transferring wealth from hackers to miners, the people contributing the most to Bitcoin’s security by pledging computing power (and paying a lot for electricity).
Both solutions could be enabled tomorrow, and the “quantum problem” as we’ve stated previously would be, for the most part, considered “solved”. However, for any change to happen with the Bitcoin protocol, social consensus has to emerge between users, miners, developers, and, more recently, large financial institutions (Blackrock will have an opinion on the matter). That’s a lot of people who need to agree on one solution, and also agree on how to deploy that solution.
You understand the bad news now, even if solutions (and there’s no GOOD solution) to the quantum problem exist today, building the large consensus required to change Bitcoin could take years. However, we’re not even sure (certain) that we have YEARS before a quantum computer becomes powerful enough to break Bitcoin.
My two cents: It will be messy, but in the end we will be fine
Hopefully, by now you understand the root of the problem and the complexity that surrounds all possible solutions to it. But the most important thing to remember when thinking about this is that it’s not about the problems or the solutions, it’s about the timelines.
The real race is between the timeline for the first quantum computer that can break Bitcoin’s encryption and the timeline for the community to agree on activating one or several soft-forks to mitigate it. We’re basically working against the clock, but the good news is that, based on all the information available at this time, we’re on track to be ready when the alarm goes off.
We’ve already merged the BIP-360 proposal (basically, Bitcoin developers have promoted the proposal as a priority item that needs to be reviewed). The topic has reached mainstream media, exchanges, and large institutions are monitoring the situation, companies are raising money to provide tools for the inevitable transition to PQC (Post-Quantum Cryptography)…
But maybe most important of all, the marginal buyers of BTC are no longer retail participants but rational economic actors, including governments and central banks. Therefore, it is safe to assume that if the perception of the solution is deemed insufficient by these new stakeholders, another solution will emerge, one that will bypass existing consensus structures, accelerating the timeline. The current timeline for this will depend entirely on how developer action is perceived by these institutions, but we’re already seeing the signs.
- Jefferies removes 10% allocation to Bitcoin: tomshardware.com
- Strategy’s Michael Saylor created a Quantum Council for Bitcoin: bitcoinmagazine.com
- 25% of Bitcoin supply is at risk according to Citi cybersecurity team: thequantuminsider.com
We’re in the fog of war; we do not know if our enemy is close (how many years before a malicious quantum theft attempt of BTC). We’re in the messy process of proposing solutions and getting consensus to activate any solution. This is the first battle of our war. But in the end, we’ll be fine because the consequences of losing this war are no longer bearable by the system that is fighting it (read: if the community doesn’t make a change quickly enough, Blackrock will).
What does it mean for the Bitcoin price and the cyclicality of Bitcoin?
While quantum-related fears have introduced some short-term price volatility and prompted reactions like Jefferies’ decision to trim its Bitcoin allocation, these concerns are unlikely to disrupt Bitcoin’s established four-year halving cyclicality or derail the return of a bull market by the end of 2026. On-chain metrics remain supportive, with spot Bitcoin ETFs recording over $18 billion in net inflows in Q1 2026 alone, corporate treasuries and sovereign buyers continuing to accumulate, and network effects driving higher price floors than in previous bears. Historical halving-cycle research (Glassnode, LookIntoBitcoin) confirms that the structural bull thesis, rooted in programmatic scarcity, maturing institutional adoption, and growing global demand, remains fully intact.
Guillaume Girard
UTXO Management
Telegram: @GuillaumeUTXO
