Digital asset manager CoinShares has brushed aside concerns that quantum computers could soon shake up the Bitcoin market, arguing that only a fraction of coins are held in wallets worth attacking.
In a post on Friday, CoinShares Bitcoin research lead Christopher Bendiksen argued that just 10,230 Bitcoin (BTC) of 1.63 million Bitcoin sit in wallet addresses with publicly visible cryptographic keys that are vulnerable to a quantum computing attack.
A little over 7,000 Bitcoin are held in wallets with between 100 and 1,000 BTC, while roughly 3,230 Bitcoin are held in wallets with 1,000 to 10,000 BTC, equating to $719.1 million at current market prices, which Bendiksen said could even resemble a routine trade.
The remaining 1.62 million Bitcoin are held in wallets with holdings under 100 BTC, which Bendiksen claimed would each take a millennium to unlock, even in the “most outlandishly optimistic scenario of technological progression in quantum computing.”
Split of quantum-vulnerable Bitcoin across various holding sizes. Source: CoinShares
The CoinShares researcher said these “theoretical risks” stem from quantum algorithms such as Shor’s, which could break Bitcoin’s elliptic-curve signatures, and Grover’s, which could weaken the Secure Hash Algorithm 256-bit (SHA-256).
However, he argued neither quantum algorithm could alter Bitcoin’s 21 million supply cap or bypass proof-of-work, two of the Bitcoin network’s most foundational features.
Quantum fears have been among the many drivers of Bitcoin FUD (fear, uncertainty, doubt) in recent months, with critics warning that any compromise of its cryptography could threaten a network that currently secures $1.4 trillion in value.
The Bitcoin at risk are unspent transaction output (UTXO) wallets, which are chunks of Bitcoin tied to wallet addresses that have not been spent. Many of these Bitcoin wallets at risk date back to the Satoshi era.
The issue has divided the Bitcoin community over whether to implement a quantum-resistant hard fork or wait.
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Some Bitcoiners, such as Strategy executive chairman Michael Saylor and Blockstream CEO Adam Back, believe quantum threats are overblown and will not disrupt the network for decades.
Bendiksen shares those views, stating that Bitcoin is “nowhere near dangerous territory,” noting that cracking its cryptography would require millions of fault-tolerant qubits — currently far beyond the 105 qubits achieved by Google’s latest quantum computer, Willow.
“Recent advancements, including demonstrations by Google and others, represent progress but fall short of the scale needed for real-world attacks on Bitcoin.”
Others, such as Capriole Investments founder Charles Edwards, view quantum computing as a potential “existential threat” to Bitcoin, arguing that an upgrade is needed now to strengthen network security.
Edwards said Bitcoin could be repriced significantly higher once a solution is implemented, which some, like Blockstream researcher Jonas Nick, suggest could involve the adoption of post-quantum signatures.
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