Asset manager Ark Invest says quantum computers are a long-term consideration for Bitcoin security, but not an imminent threat.
In a Wednesday report co-authored with Unchained, the investment manager said today’s quantum computers are far below the capabilities needed to break Bitcoin’s cryptography, which relies on elliptic curve encryption to secure wallets.
“Today’s quantum systems lack the necessary capabilities to compromise Bitcoin,” wrote authors Dhruv Bansal, co-founder and CSO at Unchained; Tom Honzik, Director of Custodial Research at Unchained; and David Puell, Research Analyst and Associate Portfolio Manager for Digital Assets at Ark Invest.
Even if quantum systems eventually reach that level, the risks are likely to emerge gradually and at high cost to attackers, the report said.
One of the main reasons Bitcoin won’t face an immediate threat is because a major breakthrough in quantum computing is likely to disrupt broader Internet security first, prompting coordinated responses from governments, tech firms and financial institutions before they reach Bitcoin.
The report comes as long-term investors grapple with the possibility that advances in quantum computing could one day break the cryptography that underpins bitcoin, fueling speculation of a potential security crisis.
Earlier this year, a prominent portfolio strategist at Jefferies, Christopher Wood, said investors should ditch the 10% bitcoin allocation and add gold instead because of a quant threat. The move rattled investors and spooked the digital asset market.
35% of the supply at risk
While researchers broadly agree that such possibilities remain a long way off, the prospect that powerful quantum machines could eventually crack private keys or older wallet formats has raised concerns among investors about long-term risks to bitcoin and the broader digital asset ecosystem.
Ark’s report estimated that about 35% of bitcoin’s supply resides in address types theoretically vulnerable to future quantum attacks, including about 1.7 million BTC believed to be lost and about 5.2 million BTC that could be migrated to more secure wallets.
One of these wallets, about 1 million BTC, belongs to Satoshi Nakamoto, the creator of the Bitcoin network.
But rather than a sudden “Q-day”, Ark Invest sees these progressions unfolding in several different stages over many years. Some investors fear the first attack could occur before 2030, while others suggest it could be “decades away,” the report noted.
The report claims that in either scenario, it will likely give the Bitcoin community time to upgrade the network with quantum-resistant cryptography and encourage users to move coins to more secure address formats.
“The good news is that we already know how to protect against quantum attacks,” the report said.
“The majority of Bitcoin’s supply is held in quantum-resistant addresses, and the rest is held in quantum-vulnerable addresses that should not be at risk until stage 3 of our timeline, where a CRQC exists that can break a 256-bit ECC key.”
The world’s largest cryptocurrency was trading around $70,000 at the time of publication.
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