A new scientific report commissioned by Coinbase does not expect the cryptocurrency industry to face a direct quantum threat in the near future, but recommends preparation without delay. According to the 50-page report written by an independent advisory board, including well-known cryptography expert Dan Boneh from Stanford University, Justin Drake working at the Ethereum Foundation, and Sreeram Kannan from Eigen Labs, today’s blockchains are still secure, but it seems almost inevitable that quantum computers will be able to break encryption in the future.
Quantum computers and crypto security
The report emphasizes that the quantum machines currently used are not powerful enough to break the encryptions that form the basis of networks such as Bitcoin and Ethereum. Building a quantum computer of this size and fault tolerance is still considered a major engineering problem.
However, according to predictions made by Google researchers, it is now being taken more seriously as a possibility that a sufficiently powerful quantum computer could break Bitcoin’s cryptography in the future.
While the Ethereum Foundation recommends safer types of digital signatures against this risk, various studies on quantum resistant wallets are being carried out on different platforms such as Solana.
Challenges of the transition process and new solutions
The report advocates planning for possible transitions in the crypto industry without rushing. The US National Institute of Standards and Technology (NIST) recommends switching to quantum resistant encryption by 2035, but the report states that even this timetable may remain optimistic.
“It is not a good idea to expect this to be an urgent issue; it may take years for networks, wallets and exchanges to complete the transition safely,” the report states.
One of the biggest hurdles in the transition to quantum-resistant encryption is the migration of millions of crypto wallets and the management of forgotten or inactive assets. It is also stated that Bitcoin wallets, especially those whose public keys have been previously disclosed, may be more vulnerable in the short term.
Post-quantum cryptography and its effects
Post-quantum cryptography techniques already exist, which NIST is in the process of standardizing. However, it turns out that the data sizes and transaction costs of these methods are much higher than classical methods.
According to the report, when quantum-proof signatures are used instead of today’s digital signatures, block sizes can grow up to 38 times, which can seriously impact data costs and throughput on the blockchain.
It is suggested that a single solution will not be sufficient, and that the transition can be made with “hybrid” models — using both existing and new cryptographic methods together — and in stages.
The authors of the report recommend developing flexible solutions that can avoid compromising existing security and performance during the transition.
The conclusion of the report is summarized as follows: “The right time to start preparations is now.”
