The overall value of digital asset markets faces serious threat in the next four to seven years. Digital assets worth over $3 trillion may be at risk of theft in the future with advancing quantum computing technology, according to a new report published by Project Eleven.
Quantum Threat Is Growing in Digital Assets
Project Eleven is known as an organization working on quantum-resistant security in the world of digital assets and cryptocurrency. The company recently announced that it is collaborating with the Solana Foundation in this field. In the report published by the organization, it was stated that almost all cryptocurrencies in the market are protected by elliptic curve signature algorithms. Experts point out that this structure may be particularly vulnerable to quantum computers.
The report reveals that not only crypto assets, but also a much wider area, from banking systems to cloud infrastructures, from authentication networks to military communication systems, are protected by the same encryption infrastructure. So, the extent of the threat is not limited to Bitcoin or Ethereum.
Project Eleven’s report draws attention with the following statements: “According to current trends, Q-Day (the date when quantum-capable computers will overcome cryptographic defenses) is likely to occur before 2033. This date may even be pushed to 2030. Time is running out for the transition to post-quantum encryption worldwide.”
Time and Coordination Problem in Transition
For large and complex digital structures, such security transitions can take more than five to ten years, the report details. Moreover, rather than just a technical change, large-scale coordination is required. A simultaneous transition between users, exchanges, custody providers, wallet software developers and miners becomes essential.
The prepared document underlines that the real problem is not technical difficulties: The main issue lies in taking action quickly enough on a global scale, determination to bear the necessary costs and cooperation of institutions.
Extra Challenges Reveal for Bitcoin
Alex Pruden and Conor Deegan, co-authors of the report, point out that Bitcoin in particular has a structure that is resistant to updates in the current situation. It is a reminder that even the previously implemented SegWit upgrade took more than two years and serious divergences occurred during this process. In the case of Bitcoin, the decentralized structure may take longer to transition to new encryption standards than other systems.
Pruden, the project’s CEO, stated that Bitcoin’s post-quantum transition may be even more challenging than the recent Taproot update. He emphasized that for the success of this process, exchanges, users, custody services and miners must act in an organized manner.
Additionally, Pruden pointed out that approximately 5.6 million to 6.9 million Bitcoins (approximately $500 billion at current market value) are at risk today. He suggested that it might be safer for this amount of cryptocurrency to be “recycled” in Bitcoin’s supply circuit to protect it from potential quantum attacks.
The report noted that Bitcoin’s fixed supply principle and property rights approach may conflict with the measures to be taken against the quantum threat.
Project Eleven stands out as a research institution operating in the field of digital security and drawing attention to the risks that cryptocurrencies and infrastructure systems will face in the next decade. This comprehensive report of the company started a new discussion in the industry about the security vulnerabilities that quantum computers can create.
