Quantum Threat to Bitcoin Goes Beyond Just Threat to Cold Wallets

Advances in quantum computing doesn’t just threaten Bitcoin wallet security, it could also undermine its economic and security model as it could be used to mine Bitcoin blocks far more efficiently, according to Coinbase’s head of investment research, David Duong.

Quantum computing continues to be debated as a potential threat to the crypto industry, as more advanced computers that could break encryption have been theorized to have the capability to reveal user keys and expose sensitive data.

However, Duong said in a LinkedIn post on Monday that another possible issue is on the horizon. He argues that the core risks on “Q-day” are cryptographically relevant quantum computers running “Shor’s and Grover’s Algorithms to undermine bitcoin’s cryptographic signature.”

“That is, bitcoin’s security relies primarily on two cryptographic pillars: the Elliptic Curve Digital Signature Algorithm (ECDSA) for transaction signatures and SHA-256 for the proof-of-work mining processes,” he said.

“That means quantum computers actually pose two separate threats. They could potentially break the cryptographic security of private keys, allowing attackers to steal funds from vulnerable addresses, and they could potentially mine blocks more efficiently, disrupting Bitcoin’s economic and security model.”

More computing power could upset miner balance

Bitcoin miners utilize computational power and energy to solve complex mathematical problems, which add transaction blocks to the network. Quantum computers are speculated to be able to perform exponentially faster than current computers.

Attacks such as a 51% attack require a massive amount of computing power and could allow one miner or a group to control more than half of Bitcoin’s total mining power and manipulate the blockchain.