The Quantum Threat to Bitcoin: Governance Challenges Are More Urgent than Technical Risks

Source: Yellow Original Title: The Hidden Vulnerability of Bitcoin Exposed: How Quantum Computers Could Steal Billions Before We Are Ready

Original Link:

The Threat of Quantum Computing to Bitcoin is Growing Closer

According to an analysis by Nic Carter, a partner at Castle Island Ventures, Bitcoin may face governance and property rights dilemmas long before quantum computing poses a direct technical threat to its cryptography. Carter points out that the shortened cycles of quantum computing conflict with Bitcoin's historically slow upgrade process.

Although Cryptographically Relevant Quantum Computers (CRQC) do not currently exist, advancements in trusted hardware, error correction, government preparedness, and capital investment have significantly narrowed the space for complacency. Carter believes that the core risk is not a sudden cryptographic failure, but rather the lack of consensus within the Bitcoin community on how to respond if quantum capabilities arrive sooner than expected.

Exposed Cryptocurrencies Trigger Property Rights Dilemma

Carter emphasized that a significant portion of the Bitcoin supply is already in a vulnerable state under quantum threat models.

Storing coins in early payments to public keys (p2pk), legacy formats, Taproot addresses, and reused addresses exposes the public keys on the chain, making them susceptible to quantum attacks that can reconstruct the private keys.

Carter estimates that about one-third of the circulating Bitcoin is currently exposed through a combination of legacy address types and address reuse. This includes approximately 1.7 million BTC from early mining outputs (widely believed to be inactive), as well as additional coins stored in reused addresses or Taproot.

The existence of these coins has created a dilemma that a software upgrade alone cannot solve. Even if Bitcoin transitions to a post-quantum signature scheme, the coins exposed on-chain remain vulnerable to attacks.

Carter argues that this forces a choice: either allow the possibility of large-scale theft or intervene at the protocol level in a way that may violate historical norms regarding property rights in Bitcoin.

Government actions indicate that quantum risks have become a reality

Carter pointed out that government actions are no longer viewed as hypothetical evidence of quantum risk.

Standardization organizations such as the National Institute of Standards and Technology (NIST) in the United States have established a timeline to phase out classical cryptographic systems by 2030 and to completely ban them by 2035. Similar timelines have independently emerged in the UK and the EU.

Carter also cited projects such as the DARPA Quantum Benchmarking Initiative, which explicitly evaluates whether useful-scale quantum computers can be built in the early 2030s. Public statements from quantum companies and researchers are increasingly focused on this timeframe, although there remains a lack of consensus among experts regarding the exact date for the arrival of CRQC.

Bitcoin as an Incentive in the Quantum Race

In addition to technical risks, Carter presents Bitcoin as an economic incentive that could accelerate quantum development.

The potential vulnerable value of hundreds of billions of dollars is visible on the chain, and Bitcoin represents a tangible reward for any entity (be it state-sponsored or private) that can exploit quantum weaknesses.

Carter argues that this dynamic increases geopolitical risks. The first entity to develop CRQC may not only gain intelligence advantages in encrypted communications but may also have influence over the global digital asset infrastructure.

Coordination Rather Than Code: The Real Bottleneck of Bitcoin

Carter concludes that the greatest vulnerability of Bitcoin to quantum computing is coordination rather than cryptography.

Although post-quantum signatures can be designed and deployed, there may be greater conflicts regarding how to handle exposed or abandoned coins.

Carter argues that, given the slow governance process of Bitcoin, significant preparations must begin long before any confirmed quantum advancements. Delaying these discussions risks making hasty decisions under crisis conditions, which could undermine trust in the network.