Bitcoin & Ethereum: The Quantum Risk
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Find below a comprehensive collection of risks related to quantum computing for Bitcoin and Ethereum blockchains. Please leave a comment if you agree or disagree in any of the given statements. Mosca's Theorem Proves You're Already Too Late X + Y > Z = You're Already Compromised – X = How long your crypto must stay secure (Bitcoin/Ethereum = permanent ledger = ∞) – Y = Time to migrate (2-5 years based on SegWit taking 2 years for 50% adoption) – Z = Time until quantum computers arrive (4-8 years: IBM's 2029 roadmap) – The Math: ∞ + 2 > 4 = Your Bitcoin is already compromised in principle The Timeline Is Published – IBM: 200 logical qubits by 2029, scaling to thousands by 2033 – Google: Willow chip achieved "below-threshold" error correction (Dec 2024) – Breaking Bitcoin: Needs only ~2,000-3,000 logical qubits – Current Progress: Microsoft/Atom Computing demonstrated 24 logical qubits (2023) Directors Face Personal Liability if the Company has Bitcoin and Ethereum Exposure -"Harvest Now, Decrypt Later" is happening today. G7 confirms state actors are recording all blockchain data now for future decryption. Every transaction adds to your future liability. – Insurance won't protect you. NIST published quantum-safe standards (Aug 2024). D&O insurers can exclude "foreseeable events" when solutions exist. – SEC disclosure requirements create a no-win situation. You must disclose material risks, but announcing "our Bitcoins are at risk" crashes prices. Not disclosing = securities fraud. Why Bitcoin Can't Be Fixed – 2 million BTC ($200B) are permanently vulnerable in P2PK addresses – can never be secured without original owners. When cracked, panic selling crashes everything. – Migration is impossible. Proposals require freezing Satoshi's coins, violating core principles. Bitcoin split over simple block size – expecting consensus on freezing $200B is delusional. – Even if fixed, Bitcoin dies. Quantum-safe signatures are 40-70x larger, reducing capacity 90% and driving fees to $500+ per transaction. Key Migration Challenges for Bitcoin • Bitcoin prioritizes stability over innovation, with changes taking years of debate – SegWit took 2+ years to activate and only reached ~50% adoption after another 2 years despite offering 30-40% fee savings • Quantum resistance requires a hard fork since new cryptographic primitives are incompatible with existing validation rules – all miners, nodes, and users must upgrade or risk chain split • Unlike Ethereum's account model, Bitcoin's UTXO system means millions of individual outputs must be moved separately, requiring many transactions and high fees • Despite best practices, ~25-30% of Bitcoin uses reused addresses (especially exchanges and old wallets), creating permanent quantum vulnerability • ~1 million BTC in P2PK outputs from Bitcoin's earliest blocks are quantum-vulnerable but unmovable – their theft would crash market confidence • Bitcoin's block size limits and script restrictions make quantum-resistant signatures (40-70x larger) economically unviable without major protocol changes • Unlike Ethereum's ERC-4337, Bitcoin cannot implement quantum resistance at the wallet level – must change core protocol affecting all users • Any fork requires majority hashpower support, but miners may resist changes that reduce transaction throughput and fee revenue • Estimated 20-30% of Bitcoin is permanently lost – these coins cannot migrate and become "quantum bounty" that could crash prices if suddenly moveable • Major exchanges holding customer funds in legacy systems would need massive operational overhauls, creating institutional inertia against change Key Migration Challenges for Ethereum • Consensus Requirements: Any protocol-level change requires overwhelming social consensus among developers, miners/validators, exchanges, and users – historically taking years to achieve even for critical upgrades • Hard Fork Complexity: Implementing quantum resistance at protocol level would require a contentious hard fork, potentially splitting the community like Ethereum/Ethereum Classic • Performance Degradation: Quantum-resistant signatures are 50-100x larger than ECDSA (KB vs 65 bytes), causing significant gas cost increases and reduced transactions per block • The Race Condition Problem: The ~30-40% of addresses with exposed keys face a catch-22: they can migrate safely NOW (2025-2030), but once quantum computers arrive, any migration attempt reveals vulnerability to attackers who can front-run with higher gas fees • Coordination Failure Risk: Millions of users must independently decide to migrate before quantum threat materializes – procrastination and ignorance will likely trap significant value • Lost/Inactive Accounts: Estimated 20-30% of ETH is in lost or inactive wallets that cannot migrate regardless of available solutions • Smart Contract Complications: DeFi protocols, DAOs, and complex smart contracts would need complete redeployment and liquidity migration, fragmenting the ecosystem • No Forced Migration: Unlike traditional systems, blockchain cannot force users to upgrade – voluntary adoption is the only path, ensuring some will be left behind Note! This excellent recap of quantum risks was originally shared by alami on Discord. submitted by /u/ChillerID |
