Recent analysis from cryptocurrency asset management firm CoinShares has raised questions about the security of Bitcoin wallet passwords, particularly those belonging to the enigmatic founder, Satoshi Nakamoto, and early holders. The assessment suggests that while quantum computing poses a theoretical risk, it does not represent an imminent threat to the Bitcoin network or its market.
CoinShares clarifies that the fears surrounding quantum computing and its potential to crack Bitcoin”s cryptographic security, particularly through the use of Shor”s algorithm against the ECDSA and Schnorr signature schemes, are overstated at present. The necessary technological advancements required to exploit such vulnerabilities are projected to be at least a decade away.
The report emphasizes that Bitcoin”s security framework relies on elliptic curves and SHA-256 hash functions. Although quantum technology could compromise some cryptographic principles, it cannot alter the capped supply of 21 million BTC or circumvent the proof-of-work consensus mechanism. Furthermore, most modern address types, like P2PKH and P2SH, keep public keys concealed until transactions are executed, which mitigates potential risks significantly.
CoinShares disputes claims that suggest a significant portion of Bitcoin”s supply is vulnerable. The firm estimates that only around 1.6 to 1.7 million BTC, or approximately 8% of the total supply, are stored in older P2PK addresses where public keys are visible. However, the majority of these accounts contain small balances, and the actual amount likely to generate substantial selling pressure is only about 10,200 BTC. Attempting to crack these addresses individually would be inefficient in terms of both cost and time, even under the most optimistic quantum scenarios.
The timeline for developing a quantum computer capable of breaching the secp256k1 curve remains daunting. CoinShares notes that achieving this would require a quantum machine with 10 to 100 thousand times the current capability in logical qubits. Short-term attacks targeting mempool operations are deemed technically infeasible for many years. Although long-term scenarios could become viable within a decade, they would still entail formidable engineering challenges.
Looking ahead, CoinShares discusses possible proactive measures to enhance security. Options such as soft or hard forks to transition to quantum-resistant address formats could strengthen investor confidence and safeguard against unforeseen technological developments. However, the report warns that these interventions could introduce risks associated with untested cryptographic protocols and lead to broader debates concerning property rights and dormant coins.
In summary, while the potential of quantum computing to impact Bitcoin”s security cannot be dismissed, current assessments indicate that the risks are manageable and not an immediate cause for concern in the cryptocurrency market.
