Ark Invest Warns: Quantum Computing Threatens 34% of Bitcoin Supply
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In a recent analysis, Ark Invest, a prominent investment firm, has underscored the potential risks posed by quantum computing to a significant portion of the Bitcoin supply. The report, released in collaboration with Unchained, indicates that nearly one-third of Bitcoin remains vulnerable to future quantum threats, even though these risks might still be years away.
According to the findings, approximately 65.4% of the total Bitcoin supply is presently secure against the anticipated advancements in quantum computing. However, around 34.6%—equivalent to nearly 5 million BTC—are categorized as at risk, largely due to the reuse of addresses and lost funds in early transaction formats.
Specifically, the study identifies 1.7 million BTC, or 8.6% of the total supply, as potentially unrecoverable because they are locked in Pay To Public Key (P2PK) addresses, which represent one of the oldest Bitcoin transaction formats. Additionally, about 200,000 BTC, roughly 1% of the total supply, is identified as vulnerable due to another address type known as Pay To Taproot (P2TR).
The report emphasizes that this supply may be susceptible to theft by quantum computers if these advanced systems successfully compromise Bitcoin’s elliptic curve cryptography (ECC). Breaking ECC would necessitate a quantum computer with approximately 2,330 logical qubits and an extraordinarily high number of quantum gates.
Ark Invest has projected that the earliest phase of practical quantum computing advancements, which could impact Bitcoin, will not occur until mid-2030s. They argue that the evolution of quantum risks will be gradual, providing ample time for the Bitcoin community to strategize and implement protective measures.
While their projections are significantly broader than a February analysis from CoinShares—which identified only around 10,200 BTC as quantum-vulnerable—Ark suggests that quantum computing will progress through five distinct stages. Importantly, they assert that only in the final stage will quantum capabilities be sufficient to breach ECC faster than Bitcoin’s transaction processing time.
The forthcoming needs for Bitcoin include the transition to quantum-safe address formats, as emphasized in Ark’s findings. They advocate for the integration of post-quantum cryptography (PQC) standards to enhance security, despite the challenges posed by Bitcoin’s decentralized governance structure, which necessitates consensus for any significant updates.
Among the proposed solutions is BIP-360, a draft for a new output type aimed at mitigating long-term quantum risks, although it has been criticized for not including necessary PQC digital signatures. Industry experts, including Chris Tam from BTQ Technologies, have highlighted that any long-term strategy against quantum threats must address these critical security features.
As the landscape of quantum computing continues to evolve, the Bitcoin community faces the task of reinforcing its infrastructure against potential challenges. Understanding and preparing for these future threats will be crucial in maintaining Bitcoin’s security and integrity.
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