Quantum Alliance Forms Amid Warnings That 6.4 Million Bitcoins Face Future Quantum Threat

Nine cryptocurrency companies launched the Quantum Alliance to jointly prepare for quantum attacks, but disagree on when the threat will arrive and whether vulnerable bitcoin should be blocked.

Who will receive Satoshi Nakamoto's 1.1 million bitcoins and the millions more at risk if quantum computers become powerful enough to break its security has long been the subject of heated debate.

Christopher Smith, CEO of Quantum-Resistant Layer 1 Blockchain, believes that whoever develops the technology first can capture billions of dollars worth of those tokens, potentially with government backing.

"The most likely scenario is that whoever gets the first CRQC (cryptographically relevant quantum computer) will probably win it with the blessing of any national government," Smith told CoinDesk. "I hope this is a government that likes Bitcoin."

The security researcher and protocol engineer's warning comes as nine crypto companies unveiled the Quantum Alliance on Thursday to develop common security standards for Bitcoin, Ethereum and other blockchain networks.

The concern is that future quantum computers could reverse-engineer a wallet's publicly visible key to discover its secret key, allowing attackers to steal funds. The alliance estimates that 6.4 million bitcoins, or 30.2 percent of the supply, have public keys already exposed. It turned out that today it is not possible to steal those coins in this way because no existing quantum computer is yet powerful enough.

The first question many are asking today is when will quantum computers really be a threat to Bitcoin? Brian Bennett, chief revenue officer at Vault, replied: "Nobody knows the date, but estimates are still falling and the risk is one we can plan for in advance. The question for trustees is not whether the date is 2028 or 2035. What matters is that if it comes sooner, you can migrate in time."

Postquant Labs CTO Richard Carbeck disagrees, arguing that 2028 is a realistic date for a machine capable of breaking today's encryption.

Recent research has reduced estimates of the computing power required to attack Bitcoin and Ethereum. But no existing machine can crack their encryption, and predictions about when it will arrive remain debatable.

The prospect of those bitcoin tokens being stolen raises another difficult question: Should developers block vulnerable assets like bitcoin reserves before quantum computers can access them? Carback says he'd rather have them moved than frozen, while Bennett sees another problem.

"No one owns the problem, and that's the problem," Bennett told CoinDesk. “A custodian protects his clients' assets, not abandoned assets. Freezing coins is a governance decision for the Bitcoin network, not the industry.

"Any stoppage trades quantum risk for a record of property rights and neutrality," he added.

The discussion has continued. Binance founder Changpeng Zhao suggested freezing 1.1 million satoshi bitcoins if the coins remain intact as quantum technology advances. Bitcoin developer Jameson Loop has also proposed limits on coins that are vulnerable to future theft, but critics argue that blocking an individual's bitcoin goes against the promise that no one can confiscate it.

Making Bitcoin quantum-proof means replacing the digital signature used to authorize transactions. This requires an agreement between developers, miners, wallet providers, exchanges and users.

"No one has a valid unit number, and anyone who provides one is guessing," Bennett said of the cost. "The real cost is not cryptography, but the coordination of wallets, exchanges, custodians and protocol developers."

Alternative signatures can also take up more space on the blockchain, potentially increasing fees or reducing the number of transactions Bitcoin can process. Researchers are currently working on ways to limit this effect.

The Quantum Alliance, whose members include Hawken, the Charles Hoskinson Midnight Foundation, Quantos Labs and PostQuant, plans to publish security tests and collaborative guidance for transitioning existing networks to quantum-resistant systems.

Carback also proposed placing vulnerable coins in a trust, allowing owners who can prove ownership to recover their funds. For bitcoin holders, the unsolved question is whether the network can protect their money without changing the rules that made the number one digital currency so attractive in the first place.

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