European financial regulators have cautioned that future advancements in quantum computing might undermine the cryptographic security upholding blockchains, shining a light on Bitcoin holdings stored at addresses that reveal public keys.
According to CryptoQuant founder Ki Young Ju, roughly 6.89 million BTC could be vulnerable if quantum machines eventually acquire the capability to deduce private keys.
EU Supervisors Warn of a Future Cryptography Risk
The joint warning was issued on September 23 by the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority.
The agencies noted that quantum computing has the potential to compromise frameworks safeguarding communications, transactions, databases, and blockchains, while encouraging financial institutions and regulators to ready themselves for novel technological hazards.
The supervisors pointed out that these cryptographic risks could materialize prior to quantum computing achieving commercial viability. Their evaluation outlines an upcoming threat as researchers strive to develop more powerful systems, though no quantum attack has yet successfully extracted a Bitcoin private key from a public key.
Concurrently, a roadmap from the European Commission urges member states to begin transitioning toward post-quantum cryptography before the close of 2026, establishing a target of late 2030 to safeguard high-risk applications. This strategy encompasses national readiness efforts to defend digital infrastructure, including platforms dependent on public-key cryptography.
Exposed Bitcoin Public Keys Draw Attention
Bitcoin relies on public keys to validate transactions. A quantum computer with adequate processing power could leverage an exposed public key to reverse-engineer the associated private key, enabling a malicious actor to authorize transactions from those specific holdings. However, the timeline for when such technology might emerge is still unknown.
Ju estimated that 6.89 million BTC could be at risk of future exposure. This calculation encompasses 1.91 million BTC sitting in legacy pay-to-public-key (P2PK) outputs—which explicitly display public keys on the blockchain—alongside an additional 4.98 million BTC whose public keys may have been disclosed during past outgoing transactions.
Furthermore, Ju pointed out that 3.4 million BTC have sat untouched for over a decade. This category features about one million BTC associated with Bitcoin’s creator, Satoshi Nakamoto. Should Bitcoin implement upgraded security measures, owners would need active control over their funds to transfer them to secure addresses, meaning coins with lost keys could be left behind permanently.
A Bitcoin Upgrade Would Require Agreement
Shielding exposed Bitcoin holdings demands modifications to the network’s transaction signature verification methods. Software developers would first have to formulate and test an upgrade, after which miners, node operators, exchanges, wallet providers, and everyday users would all need to run compatible software and migrate vulnerable coins.
Such a transition could strain Bitcoin’s transaction throughput. Post-quantum signatures tend to be larger than those currently utilized by Bitcoin, forcing developers to carefully balance file size and network performance when evaluating prospective architectures. Moreover, the decentralized network lacks any central authority capable of relocating coins on behalf of their owners.
Ju additionally mentioned the potential option of freezing older coins lingering in vulnerable addresses. Implementing such a policy would impact owners who might regain access to dormant funds at a later date, and Ju warned that disputes surrounding these stranded coins could fracture the community and spawn rival versions of Bitcoin.
Meanwhile, IBM targets fault-tolerant quantum computing for 2029, providing the Bitcoin ecosystem with an additional milestone to monitor as stakeholders weigh potential adjustments to network security.
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