Cryptocurrency companies are developing plans to upgrade networks with quantum-resistant encryption following progress that suggests quantum computers could break existing encryption sooner than expected.
Google research suggests that quantum computers capable of breaking encryption could arrive by 2029. Reports Reuters.
Today’s computers lack the ability to work backwards through a public key to reveal the private key that controls the wallet. Quantum computers could eventually change that, allowing bad actors to forge digital signatures and allow transactions that were never approved by the real owner. Because cryptocurrency transactions are final, with no bank or broker to reverse them, stolen funds will not be recoverable.
Bitcoin is particularly vulnerable given its 17-year history of creating visible public keys, with estimates suggesting 35% to 50% of its supply could be compromised.
“It is the most direct and existential threat to cryptocurrencies and crypto networks,” says Chris Tam, head of quantum innovation at BTQ Technologies.
Christopher Wood, head of equity strategy at Jefferies, in his January newsletter, unloaded a 10% Bitcoin allocation from his typical portfolio, citing the long-term “existential” threat of quantum computing.
Says Utkarsh Ahuja, Managing Partner at Moon Pursuit Capital,
“Cryptocurrencies in particular are uniquely private because the blockchain is transparent and permanent.”
Plans include post-quantum signatures, although challenges such as larger signature sizes and decentralized consensus remain.
Ethereum (ETH) is targeting full security for 2029, while Algorand (ALGO) plans to support post-quantum calculations later this year.
None of the top 20 blockchain companies have implemented such algorithms yet.
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