Digital asset manager CoinShares has dismissed concerns that quantum computers could soon shake up the Bitcoin market, arguing that only a fraction of the coins are held in wallets worth attacking.
In Friday’s post, head of Bitcoin research at CoinShares Christopher Bendiksen he argued that only 10,230 Bitcoins (BTC) of the 1.63 million Bitcoins are held in wallet addresses with publicly apparent cryptographic keys that are vulnerable to a quantum computing attack.
Just over 7,000 Bitcoins are held in wallets ranging from 100 to 1,000 BTC, while approximately 3,230 Bitcoins are held in wallets ranging from 1,000 to 10,000 BTC, which equates to $719.1 million at current market prices, which Bendiksen said may even resemble a routine transaction.
The remaining 1.62 million Bitcoins are held in wallets worth less than 100 BTC, and it would take a thousand years to unlock each of them, according to Bendiksen, even in “the most outlandishly optimistic scenario of technological progress in quantum computing.”
The CoinShares researcher said these “theoretical risks” stem from quantum algorithms such as Shor’s algorithm, which can crack Bitcoin’s elliptic curve signatures, and Grover’s algorithm, which can weaken the 256-bit Secure Hash Algorithm (SHA-256).
However, he argued that no quantum algorithm could change Bitcoin’s 21 million supply limit or bypass proof of work, two of the most fundamental features of the Bitcoin network.
Quantum fears have been among many factors driving Bitcoin FUD (fear, uncertainty, doubt) in recent months, with critics warning that any breach of its cryptography could threaten a network that currently secures $1.4 trillion in value.
Bitcoins at risk are unspent transaction wallets (UTXO), i.e. pieces of Bitcoin associated with wallet addresses that have not been spent. Many of these compromised Bitcoin wallets date back to the Satoshi era.
The issue has divided the Bitcoin community on whether to implement a quantum-resistant demanding fork or wait.
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Some Bitcoiners, such as Strategy executive chairman Michael Saylor and Blockstream CEO Adam Back, believe quantum threats are overblown and won’t disrupt the network for decades.
Bendiksen echoes these views, stating that Bitcoin is “nowhere near dangerous territory,” noting that cracking its cryptography would require millions of error-tolerant qubits – currently well beyond the 105 qubits achieved by Google’s newest quantum computer, Willow.
“Recent advances, including demonstrations by Google and other companies, represent progress, but do not match the scale needed for actual attacks on Bitcoin.”
Others, like Capriole Investments founder Charles Edwards, view quantum computing as a potential “existential threat” to Bitcoin, arguing that an upgrade is now necessary to strengthen the security of the network.
Edwards said Bitcoin’s price could become much higher once the solution is implemented, which some, like Blockstream researcher Jonas Nick, suggest could involve the adoption of post-quantum signatures.
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