Bitcoin Faces Dual Quantum Risks: Mining Disruption and Private Key Exposure

The rapid evolution of quantum computing could pose significant threats to Bitcoin’s ecosystem according to CryptoQuant.

A new analysis by the platform revealed two critical areas that could be targeted are – mining and private key security.

Bitcoin’s Dual Vulnerabilities

Bitcoin miners rely on a nonce and the SHA-256 hash function to secure the network by finding valid hashes in a process known as proof-of-work, which requires vast computational power. Quantum computers, leveraging algorithms such as Grover’s, could significantly enhance brute-force mining efficiency, and ultimately allow faster hash validation.

This advancement could challenge network security, emphasizing the importance of sustaining a strong non-quantum hash rate to protect the network from potential quantum threats, CryptoQuant noted in its update this week.

Meanwhile, Quantum computing raises significant concerns about private key security, particularly with Shor’s Algorithm, which could theoretically extract private keys from public keys. CryptoQuant explained that this makes “pay to public key” (P2PK) addresses especially vulnerable, as they directly expose the public key.

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

“Quantum Computing is a growing risk for Bitcoin. Quantum computing uses principles of quantum mechanics, where information is processed using qubits that can exist in multiple states simultaneously (superposition) and can be entangled with other qubits. This enables quantum computers to solve certain complex problems much faster than classical computers, though the technology is still in development.”

Bitcoin’s Quantum Vulnerability

The debate surrounding quantum computing isn’t new. Concerns about Bitcoin’s security emerged again after a NIST report in November stated that “quantum-vulnerable” algorithms will be deprecated within five years. Some, like X user ‘Bitcoin Isaiah,’ criticized the Bitcoin community for downplaying the threat, urging preemptive action.

However, Adam Back, Blockstream CEO and renowned cryptographer, argued that Bitcoin’s encryption is secure until at least 2035 and that current concerns may be premature.

In recent weeks, Google’s Willow quantum chip also divided the community over debates about Bitcoin’s security. Unveiled on December 9th, Willow boasts a massive computational 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, requiring astronomical computing resources.

An MIT review had previously suggested that the capabilities of quantum computing are overhyped.