A new report from investment firm Bernstein pushes back against fears that quantum computing could devastate Bitcoin, arguing the technology should be viewed as a long-term upgrade challenge rather than an existential danger. The firm notes that the threat is neither new nor confined to cryptocurrency, extending equally to financial services, military systems, and healthcare infrastructure. Bernstein’s assessment comes as anxiety around a so-called Q-day — the point at which quantum computers could break current encryption — continues to grow within the cryptocurrency industry.
According to Bernstein, the most significant near-term vulnerability involves approximately 1.7 million BTC, valued at around $116.6 billion, held in legacy wallets dating back to the era when Satoshi Nakamoto was still active online. These older wallet formats expose public keys directly on the blockchain, making them susceptible to a strategy known as a harvest-now, decrypt-later attack. For more modern encryption protocols and crypto-linked assets, the firm says risks are limited to certain unsafe practices that can be identified and addressed.
Bernstein also states that Bitcoin mining faces no realistic near-term threat from quantum computing. The firm points out that the SHA-256 hashing algorithm used in mining is considered quantum safe, estimating it would take several millions of years to compromise even accounting for recent algorithmic improvements such as Grover’s algorithm. The more pressing concern centers on elliptic-curve cryptography, the digital signature system that secures Bitcoin wallets.
Blockstream CEO Adam Back, a Bitcoin pioneer recently identified in a New York Times report as a likely candidate behind the Satoshi Nakamoto identity, echoed a measured view of the threat. Speaking to Bloomberg, Back noted that recent academic and industry research reflects algorithmic improvements rather than meaningful advances in quantum hardware. He described current quantum systems as extremely basic, citing persistent limitations in error correction as a major barrier to practical cryptographic attacks.
Back illustrated the gap between current quantum capabilities and what would be needed to threaten Bitcoin by pointing to the most complex calculation demonstrated so far. “The biggest calculation it’s performed is that to factorize the number 21 into seven times three,” he said, comparing it to arithmetic done by primary school children. Breaking Bitcoin’s cryptography would require hundreds of thousands of stable, error-corrected qubits, far beyond the roughly one thousand physical qubits that current quantum machines operate with.
Concern in the industry has nonetheless grown following a March paper from Google Quantum AI, which shortened estimates for when quantum systems capable of threatening elliptic-curve cryptography might emerge, pointing to a possible timeline around 2032. Additional academic research has suggested that fewer quantum resources than previously thought may be required to break the signature system used by Bitcoin wallets. Back acknowledged these developments but maintained that hardware progress has not kept pace with theoretical advances.
The recommended path forward, according to Back, is a gradual and orderly migration of Bitcoin users to quantum-resistant security formats. He stressed that custodians and exchanges should be given sufficient time to move holdings into quantum-ready formats, arguing that a longer transition window would result in a safer outcome for the broader ecosystem. Bernstein’s report similarly frames the situation as a manageable upgrade cycle, provided the industry begins preparing in advance rather than treating the issue as an imminent crisis.
Originally reported by Decrypt.
