According to analytics platform CryptoQuant, the rapid advancement of quantum computing could pose a threat to the Bitcoin ecosystem.

According to their analysis, Bitcoin has two critical vulnerabilities: mining and private key security.

Bitcoin Vulnerabilities

Bitcoin miners rely on nonces and the SHA-256 hash function to secure the network by finding valid hashes in a process known as proof-of-work, which requires massive computing power. Quantum computers using algorithms like Grover’s algorithm could significantly improve the efficiency of brute-force mining and ultimately allow for faster hash verification.

As CryptoQuant noted in an update this week, this advance could challenge the network’s security, highlighting the importance of maintaining a high non-quantum hash rate to protect the network from potential quantum threats.

Meanwhile, quantum computing has raised serious concerns about the security of private keys, especially with Shor’s algorithm, which can theoretically derive private keys from public keys. CryptoQuant explained that this makes “pay to public key” (P2PK) addresses particularly vulnerable, as they directly reveal the public key.

On the other hand, “pay to public key hash” (P2PKH) addresses provide an additional layer of security, but still reveal the public key during Bitcoin transfers, making address reuse a potential risk. Interestingly, P2PKH address usage has grown by 14%, although it is unclear whether this increase is related to fears around quantum computing.

“Quantum computing is a growing risk for Bitcoin. It uses principles of quantum mechanics, where information is processed using qubits that can exist in multiple states at once (superposition) and can be entangled with other qubits. This allows quantum computers to solve some complex problems much faster than classical computers, although the technology is still in its infancy.”

The debate over quantum computing is not new. Concerns over Bitcoin’s security resurfaced after a NIST report in November stated that “quantum-vulnerable” algorithms would be obsolete within five years.

However, Adam Back, CEO of Blockstream and a renowned cryptographer, argues that Bitcoin’s encryption will be secure until at least 2035 and that the current concerns may be premature.

In recent weeks, Google’s Willow quantum chip has also divided the community over the Bitcoin security debate. Unveiled on December 9, Willow boasts massive computing power, solving problems in five minutes that would take traditional supercomputers trillions of years. However, experts argue that brute-force attacks on Bitcoin remain infeasible even for quantum systems, which require astronomical computing resources.

An earlier MIT review suggested that the capabilities of quantum computing were overstated.

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