What if someone builds a quantum computer fast enough to crack your bitcoin wallet's security and siphon off your coins?
That's on everyone's mind, since some projections suggest that such a quantum machine, though it doesn't exist today, could arrive within a few years.
Nasdaq-listed crypto exchange Coinbase COIN$181.88·Market Closed, which holds about 5% of all bitcoin in existence today for its clients, including banks, asset managers and hedge funds, has shared its thoughts on that question in a new blog post, laying out what it believes bitcoin needs to do to stay secure against a "potential future" quantum threat.
Its first point is to start preparing now, not wait for the risk to arrive, and handle the question of lost coins separately.
To follow the exchange's suggestions, it helps to know how Bitcoin's locks work and how a quantum computer can break them.
Think of a bitcoin wallet as a mailbox with a narrow horizontal slot at the top and a key held only by the owner. The visible slot, through which anyone can drop letters inside, is the wallet's public key. The private key, by contrast, is the physical key that unlocks the box. Kept strictly in the owner's hands, this private key is invisible to the outside world and keeps the Bitcoin in the wallet safe.
When a user sends bitcoin, their wallet uses the private key to create a digital signature, a tamper-proof stamp. The network checks it against the user's public key; if it matches, the transaction is approved.
The Bitcoin blockchain uses two methods, called ECDSA and Schnorr, to create and verify these digital signatures. These are extremely secure for now because current computers aren't powerful enough to crack the math behind these techniques and reverse-engineer a user's private key from its digital signature or public key.
A sufficiently powerful quantum computer, one that could exist by 2029, according to Google Researchers, could do just that: reverse-engineer a private key from a public key and drain holders' bitcoin wallets.
Researchers call a machine with that capability a cryptographically relevant quantum computer, or CRQC.
The proposed fix is post-quantum, or PQ, cryptography. In plain English, new signature methods that withstand quantum attacks.
According to Coinbase, just picking a new security method isn't enough. They believe a complete upgrade to protect Bitcoin from quantum computers must secure both old and new funds, fit neatly within Bitcoin's limited data space, and let regular computers keep running the network. It also has to work for both giant crypto platforms and everyday users, while offering a clear plan for older coins that might never move.
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