US investment manager Ark Invest says the lion’s share of the Bitcoin supply is already hedged against a breakthrough in quantum computing, leaving enough warning signals for builders to make the rest of the supply resistant to quantization.
According to Wednesday’s white report, about 65.4% of the Bitcoin (BTC) supply is not exposed to the threat of a quantum computing breakthrough, but about 34.6% of the BTC supply remains at risk. paper published by Ark Invest and Bitcoin-focused financial services company Unchained.
This includes approximately 5 million BTC, or 25% of the total supply, assuming migration can be achieved through address reuse, and 1.7 million BTC, or 8.6% of the supply, presumably lost in P2PK (Pay To Public Key) addresses, the earliest form of transaction script on the Bitcoin blockchain that locked funds directly to public keys. It is assumed that another 200,000 BTC (approximately 1%) will be migrateable due to the P2TR (Pay To Taproot) address type.
These supplies would be vulnerable to quantum theft if quantum computers were able to crack Bitcoin’s elliptic curve cryptography (ECC), which would require approximately 2,330 logical qubits and tens of millions to billions of quantum gates, the report argues.
“Nonetheless, their practical feasibility would require quantum systems to achieve performance levels that our research suggests will take a long time to achieve.”
The paper’s estimates are much broader than those from a February CoinShares analysis, which found that the realistically market-relevant portion of Bitcoin vulnerable to quantum attacks was around 10,200 BTC, or about 0.05% of the supply, even though legacy P2PK addresses represent a much larger theoretical exposure.
The first quantum computer factory with one million physical qubits (equivalent to tens of billions of typical computers) is expected to be completed in 2027 by Chicago-based PsiQuantum, which has raised $1 billion in BlackRock-linked funds.
Quantum breakthrough remains a “long-term risk” for Bitcoin
In the white paper, Ark argues that quantum risk will evolve over a longer period with “many intermediate warning signals” rather than a sudden single point of failure.
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A quantum breakthrough remains a “long-term risk” rather than an immediate threat to the Bitcoin network, which gives the community time to “explore and develop plans to protect the network” against a prolonged development of quantum capabilities, the article states.
Ark Invest envisions five stages of quantum computing development, but said only the final stage of improvement would break ECC faster than Bitcoin’s 10-minute block time.
Bitcoin stored at addresses vulnerable to quantum attacks should not be at risk until Stage 3, when a quantum computer will be able to crack the 256-bit ECC key.
The white paper said the first public key could be cracked in the mid-2030s, citing a consensus reached by companies including Google, IBM and Microsoft.
Bitcoin needs to implement quantum-secure address formats despite governance challenges
Quantum computers will inevitably reach stage 4 and become a threat to the Bitcoin network, which means Bitcoin must implement a quantum-secure address format, the paper argues.
This measure will require the integration of post-quantum cryptography (PQC) into Bitcoin, such as the ML-DSA grid-based signature scheme and the SLH-DSA hash-based signature.
“These standards give us confidence in the possibilities of post-quantum cryptography,” Ark Invest wrote, warning that a consensus-level transition to PQC will be more arduous due to Bitcoin’s decentralized governance structure, which requires a majority of network participants to agree to a supple fork.
The article states that Bitcoin will eventually need quantum-secure address formats and, over time, post-quantum cryptography. One of the path designs discussed, BIP-360, proposes a Pay-to-Merkle-Root output type, designed to reduce long-exposure quantum risk by removing the Taproot key path vulnerability, although it does not itself add post-quantum digital signatures.
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However, according to Chris Tam, president and head of quantum innovation at BTQ Technologies, BIP-360 is not the final solution to Bitcoin’s quantum threat.
“The proposal introduces a new address format but does not substantially cover post-quantum digital signatures, which are essential for any meaningful long-term defense against quantum attacks,” Cointelegraph said.
Warehouse: Bitcoin Could Take 7 Years to Upgrade to Post-Quantum: BIP-360 Contributor
