According to the new research report published by Citi, the rapid development of quantum computers poses a significant threat to the cryptocurrency market. The report particularly emphasized that Bitcoin carries a higher risk compared to Ethereum. According to experts, technological advances in recent years have increased the likelihood of practically usable quantum attacks to between 2030 and 2032. This development leads to a rapid contraction of lead time for blockchain-based assets.
Bitcoin’s nature is open to quantum attacks
In Bitcoin transfers, the sender’s public key is exposed to the network until the transactions are confirmed. During this time, it is theoretically possible for a quantum attacker to decipher the private key. Although the approval process is short, the impact of this vulnerability is increasing with advances in new quantum computing hardware.
A Google study predicted that a quantum computer with 500 thousand qubits could break Bitcoin encryption within minutes. Although a device with this capacity has not been developed yet, technology is advancing rapidly. While Google calculates the breaking point, known as Q-Day, as 2032, some researchers are pushing the date to 2030.
One of Bitcoin’s biggest weaknesses lies in dormant wallets. Approximately 6.7 to 7 million BTC is currently held in addresses whose public key has already been exposed. These wallets, in particular, become the most attractive target for a possible quantum attack.
Among these addresses, there are approximately 1 million BTC that are thought to belong to Satoshi Nakamoto, known as the inventor of Bitcoin, and have remained untouched to date. The current market value of the coins in question is calculated to be close to 82 billion dollars.
Governance difference between Bitcoin and Ethereum
According to Citi analysts, Ethereum and similar proof-of-stake-based networks can quickly make protocol changes thanks to their more flexible governance structure. Ethereum’s updatable protocol structure puts it in a more advantageous position against quantum threats.
In contrast, the traditional and collective decision-making process in Bitcoin, while ensuring the reliability of the project, is also seen as an obstacle to rapid change. A serious network consensus and possibly a hard fork may be required to implement changes that will make Bitcoin more resistant to quantum attacks.
In the report of Citi analysts, there was a call: “The process of proposed Bitcoin updates such as BIP-360 and BIP-361 should be followed”, and it was reminded that Ethereum is not completely immune to quantum attacks.
In the case of Ethereum, it is theoretically possible for a quantum-capable attacker to infiltrate its network and capture 33 percent of staked assets. In this scenario, disruptions may occur in block confirmation processes or throughout the network. However, experts are of the opinion that Ethereum can implement updates more easily due to its flexible protocol change capacity.
Preparation and solution suggestions against the quantum threat
Work continues in the industry on various encryption methods against quantum attacks. At the Financial Times Digital Asset Summit event, Fireblocks CEO Michael Shaulov evaluated the quantum risk facing Bitcoin as a need for intra-community coordination rather than a technical problem.
Shaulov emphasized that the main problem is in the preparation process, saying, “Basically, the entire Internet should make a leap and switch to post-quantum encryption; in general, we have usable algorithms.”
According to experts, it is of great importance to accelerate community coordination and technical infrastructure preparations for the sector to adapt successfully. Because the increase in quantum computing power in the coming years may be a critical breaking point for crypto asset networks.
