Digital asset manager CoinShares has dismissed rising concerns regarding the potential implications of quantum computing on the Bitcoin market. In a recent analysis, CoinShares’ Bitcoin research lead Christopher Bendiksen asserts that only a small fraction of Bitcoin is held in wallets susceptible to quantum attacks.
Bendiksen highlights that among the 1.63 million Bitcoin currently in circulation, only 10,230 Bitcoin belong to wallet addresses with publicly visible cryptographic keys, making them targets for quantum computing assaults. More specifically, just over 7,000 Bitcoin are located in wallets containing between 100 and 1,000 BTC, while approximately 3,230 BTC are in wallets holding between 1,000 and 10,000 BTC. This total amount equates to around $719.1 million at current market valuations, which Bendiksen suggests could be considered as routine trade.
The overwhelming majority—approximately 1.62 million Bitcoin—are stored in wallets that hold fewer than 100 BTC. Bendiksen argues that it would take an impractical millennium to crack these wallets, even under the most optimistic predictions regarding technological advancements in quantum computing.
Bendiksen points to theoretical risks associated with quantum algorithms like Shor’s and Grover’s, which could threaten Bitcoin’s cryptographic foundations. Shor’s algorithm could potentially break Bitcoin’s elliptic-curve signatures, while Grover’s could weaken the SHA-256 hashing algorithm that underpins Bitcoin’s security. Despite this, Bendiksen insists that such technologies cannot alter Bitcoin’s fixed supply cap of 21 million coins or bypass its proof-of-work system, which are essential characteristics of the Bitcoin network.
The fear of quantum computing has been a significant factor contributing to the climate of fear, uncertainty, and doubt (FUD) surrounding Bitcoin in recent months. Critics of Bitcoin warn that any breach of its cryptography could jeopardize a network that currently protects approximately $1.4 trillion in value. The identified Bitcoin at risk are in unspent transaction output (UTXO) wallets, representing chunks of Bitcoin tied to wallet addresses with unspent balances, many of which date back to the early days of Bitcoin.
Debate continues within the Bitcoin community regarding how to approach potential quantum threats. Some prominent figures, including Michael Saylor, executive chairman of Strategy, and Adam Back, CEO of Blockstream, believe that the threats posed by quantum computing are exaggerated and not likely to disrupt the Bitcoin network for many years.
Bendiksen concurs with this viewpoint, asserting that Bitcoin is “nowhere near dangerous territory.” He notes that breaking Bitcoin’s cryptography would necessitate millions of fault-tolerant qubits, a technical milestone far beyond the current 105 qubits achieved by Google’s latest quantum computer, known as Willow. He argues that recent advancements in quantum computing, while significant, do not yet reach the scale needed for real-world attacks on Bitcoin.
On the other hand, some experts like Charles Edwards, founder of Capriole Investments, perceive quantum computing as an “existential threat” to Bitcoin, advocating for immediate upgrades to enhance the network’s security. Edwards suggests that once a protective solution is adopted, Bitcoin’s value could experience a pronounced increase. Proposals for resolving these concerns include the potential for implementing post-quantum signatures, an idea echoed by Blockstream researcher Jonas Nick.
