A recent report reveals that over $469 billion in Bitcoin is at risk from quantum computing threats, with 30% of its public keys exposed.
Summary
- More than 30% of Bitcoin's public keys are exposed on-chain, making it vulnerable to future quantum computing threats.
- This exposure is due to structural design flaws and operational practices like address reuse.
- About 40% of the Bitcoin exposed operationally is on exchanges, with risks varying by platform.
A new analysis by blockchain analytics firm Glassnode reveals that over 6 million Bitcoin, valued at more than $469 billion, are at risk of theft from future quantum computing advancements. This figure represents approximately one-third of the total Bitcoin supply.
The report examined the Bitcoin blockchain to identify coins with exposed public cryptographic keys, finding that 6.04 million BTC, or 30.2% of the total supply, are vulnerable to quantum threats. This is a decrease from earlier estimates, which suggested nearly 7 million BTC were at risk.
The primary concern stems from Bitcoin's security architecture, where each coin is protected by a private key linked to a public key visible on the blockchain under specific circumstances. A sufficiently powerful quantum computer could potentially use Shor's algorithm to derive a private key from a known public key.
If this scenario occurs, any Bitcoin with an exposed public key could be targeted without needing to execute a transaction.
Glassnode categorizes the exposed Bitcoin into two types: structural exposure, which includes 1.92 million BTC (9.6% of the total supply) vulnerable due to script design flaws, and operational exposure, which accounts for 4.12 million BTC (20.6% of the total supply) that became vulnerable due to address reuse practices.
Within the operationally exposed Bitcoin, 1.66 million BTC (8.3% of the total supply) is linked to exchanges, representing about 40% of all operational exposure. The level of risk varies across platforms; for instance, Coinbase has around 5% of its balances exposed, while Binance and Bitfinex show much higher exposure rates of 85% and 100%, respectively.
Glassnode clarified that its findings do not serve as a risk assessment for individual firms but rather reflect custody design choices. Notably, sovereign Bitcoin holdings from countries like the United States and the United Kingdom show no quantum exposure.
The report does not predict when a quantum computer capable of breaching Bitcoin's encryption might emerge but suggests that exchanges could mitigate visible exposure through better address management and reduced key reuse. The Bitcoin developer community is also exploring protocol-level responses, including BIP-360, which aims to introduce quantum-resistant transaction formats.
Estimates for the arrival of “Q-Day,” when a quantum computer could effectively compromise blockchains like Bitcoin and Ethereum, range from 2030 to 2032 or beyond. Recently, the U.S. government announced plans to invest over $2 billion into quantum computing startups and facilities to strengthen its position in the sector.
