A recent quantum computing breakthrough threatens Bitcoin.
That’s according to Avalanche blockchain founder Emin Gün Sirer, who says that developments including Google’s new Willow quantum computing chip risk being able to break the encryption underpinning creator Satoshi Nakamoto’s wallets.
Nakamoto, the pseudonymous creator of Bitcoin, holds more than 1.1 million coins — valued at about $107 billion — in older Pay-To-Public-Key, or P2PK, wallets, which tie funds directly to a user’s public key and require a private key “password” to spend.
As powerful quantum computing technologies advance — capable of quickly breaking today’s encryption — these older wallets face a growing risk of being cracked by malicious actors seeking to access this immense digital fortune.
“As QC gets threatening, the Bitcoin community might want to look into freezing Satoshi’s coins, or more generally, provide a sunset date and freeze all coins at P2PK utxos,” Avalanche blockchain founder Emin Gün Sirer said on X, eferring to older, more vulnerable output types.
For most users, avoiding the quantum computer threat is as simple as transferring coins to a newer wallet that doesn’t use P2PK.
But Nakamoto hasn’t touched his wallets since 2010. It’s not known if the Bitcoin creator has chosen not to access the wallets, or, as some believe, has taken the Bitcoin fortune to his grave.
In any case, as quantum computing advances, the wallets could become a major target.
A quantum ‘arms race’
Announced on Monday, Google’s Willow chip has 105 qubits, or quantum bits, to process information, a 56% improvement on the firm’s previous model, Sycamore.
Crypto developers have long-known that quantum computers have the potential to foil blockchain encryption. They can be used to run “Shor’s algorithm,” a quantum algorithm that rapidly turns large numbers into prime factors, to crack the private keys behind crypto wallets.
Ethereum co-founder Vitalik Buterin, as well as dozens of other crypto developers, say they can upgrade blockchains like Bitcoin or Ethereum to make them quantum proof.
The outdated P2PK Bitcoin wallets on the other hand, can’t be upgraded.
Solana founder Anatoly Yakovenko has suggested that Nakamoto’s P2PK wallet stash could trigger a “quantum computer arms race,” as multiple parties rush to advance the technology and break into the wallets first.
Bitcoin strategic reserve would start a quantum computer arms race. I am only for it if 🇺🇸 wins it. pic.twitter.com/UnqXbsrYnH
— toly 🇺🇸 (@aeyakovenko) August 1, 2024
And it’s not just Nakamoto’s Bitcoin that is at risk.
According to research from auditing firm Deloitte, more than 4 million Bitcoin, around 20% of all coins in circulation, are held in P2PK wallets.
Possible solutions
One possible solution, as suggested by Sirer, is that the Bitcoin community could agree to upgrade the network to freeze Satoshi’s coins.
This means that even if someone uses quantum computers to break the encryption on Nakamoto’s wallets, they won’t be able to transfer or sell the Bitcoin held within them.
Reaching a consensus could be difficult.
Last year, Bitcoin developers were unable to agree on whether to patch a vulnerability to the Lightning network. The bug was added to the National Vulnerability Database on December 8, more than a year after it was discovered.
Several times, groups within the Bitcoin community have splintered off to create their own versions of the top crypto due to differences in how they believe the technology should be developed.
But if development of quantum computers accelerates, Bitcoin developers may have to agree on a course of action quickly.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
