Quantum computing’s potential to compromise Bitcoin’s cryptographic security has intensified discussions among industry experts, with ChainCode Labs estimating that 32.7% of Bitcoin’s circulating supply—approximately 6.36 million BTC—is currently at risk of quantum attacks [1]. The vulnerability arises from the exposure of public keys during transactions, particularly in cases of address reuse, legacy address types, and specific UTXO scripts. ChainCode’s analysis highlights that 69% of the at-risk BTC (4.49 million) stems from address reuse, a common practice among exchanges and early adopters [1].
The core issue lies in the exposure of public keys, which are derived from private keys using the ECDSA algorithm. While SHA-256 hashing provides robust protection for Bitcoin addresses, the act of spending funds via a UTXO reveals the associated public key. Once exposed, quantum computers could theoretically exploit Shor’s algorithm to reverse-engineer private keys, enabling unauthorized access to funds [1]. This risk is amplified for P2PK (Pay-to-Public-Key) addresses and P2TR (Pay-to-TAPROOT) UTXOs, which account for an additional 8.65% and 0.15% of the vulnerable supply, respectively [1].
Despite these findings, experts emphasize that quantum decryption remains a theoretical threat. Current quantum systems lack the computational power to break ECDSA encryption, with analyses suggesting the technology is still years—possibly decades—away from posing a real-world risk [6]. Anthony Milton of ChainCode noted in a 2025 report that quantum computing remains a “far-off concern,” underscoring the absence of immediate practical threats [6]. However, proactive measures are critical, as dormant wallets holding decades-old BTC could become vulnerable once quantum decryption becomes feasible [7].
The cryptocurrency community is exploring post-quantum cryptography (PQC) solutions to future-proof the network. Technologies like XMSS (eXtended Merkle Signature Schemes) and lattice-based algorithms are being developed to replace ECDSA with quantum-resistant alternatives [3]. Adoption of these protocols, however, requires consensus and standardization, a process that could take years. In the interim, users are advised to minimize public key exposure by avoiding address reuse and utilizing P2PKH, P2SH, or SegWit addresses, which remain secure unless their public keys are revealed [1].
Institutional confidence in Bitcoin’s infrastructure, as evidenced by large-scale transactions like the $9.6 billion transfer to Galaxy Digital, suggests the ecosystem is prepared to handle emerging challenges [8]. Custodians like Galaxy may play a pivotal role in implementing advanced security protocols, including PQC, to mitigate quantum risks [8]. Nevertheless, the debate underscores the need for balance between speculation and factual analysis. While quantum computing’s long-term implications warrant attention, overestimating the threat could drive unnecessary panic, whereas underestimating it risks leaving systems unprepared [6].
The path forward requires collaboration among developers, users, and institutions. Prioritizing PQC research, adopting quantum-resistant signatures, and reducing public key exposure are key strategies. Regulatory clarity and infrastructure upgrades will further determine the industry’s ability to adapt to quantum advancements. Until quantum decryption becomes a tangible reality, the immediate threat remains hypothetical, but the long-term implications demand serious preparation [3].
Sources:
[1] [Are Your Bitcoins Threatened By Quantum Computing?](https://coinmarketcap.com/community/articles/6883bb8dcf73665c3b5f89fc/)
[3] [The Quantum Threat to Crypto: Why XMSS and PQ-Signing](https://medium.com/@mcollinmi/the-quantum-threat-to-crypto-why-xmss-and-pq-signing-adoption-must-start-in-earnest-161874680baf)
[6] [Quantum Computing Is A Bigger Problem Than You Think](https://www.publish0x.com/stuntdilas-free-money-and-cryptocurrencies/quantum-computing-is-a-bigger-problem-than-you-think-when-te-xoklokg)
[7] [How to encrypt and decrypt crypto?](https://bitkan.com/learn/how-to-encrypt-and-decrypt-crypto-why-does-encryption-still-matter-59289)
[8] [Bitcoin Whale Activity and Institutional Adoption](https://www.ainvest.com/news/bitcoin-whale-activity-institutional-adoption-catalyst-stability-confidence-btc-future-2507/)
