Will quantum computing soon make about 25% of Bitcoins ($500 billion) vulnerable to hacks? (2025.01.05)
The cryptocurrency community has been abuzz with speculation following Google’s unveiling of the Willow processor— a groundbreaking quantum computing chip with 105 qubits. Announced in December 2024, this processor achieved a "mindboggling" milestone in computational speed, and it may only be the start of further advancements.While this innovation is a significant achievement, it has raised concerns among cryptocurrency holders. The same technology that ensures the security of digital assets today could potentially become their greatest vulnerability in the future. Some Bitcoin holders worry this technological leap might jeopardize the security of their assets.This concern stems from the foundational principles of modern cryptography. Cryptocurrencies like Bitcoin and Ethereum rely on mathematical problems that are exceptionally difficult for traditional computers to solve (such as factoring large numbers). Quantum computers, however, could potentially solve these problems with far greater efficiency.
✨Get a Dissertation Research Proposal on this Topic
Fill in the form and we will shortly create and send you the research proposal on "Will quantum computing soon make about 25% of Bitcoins " for free.
A Closer Look at the Risks
It’s essential to understand that quantum computers operate fundamentally differently from classical computers. Instead of traditional bits, quantum computers use quantum bits (qubits), which can exist in multiple states simultaneously.
Imagine your cryptocurrency wallet as a combination lock. A classical computer would need to try combinations sequentially, one at a time. A quantum computer, however, can test millions of combinations at once. This capability has led to fears that blockchain systems may become vulnerable.
While experts agree that Bitcoin and other blockchains still have time to develop stronger defenses, a Deloitte analysis suggests that around 25% of Bitcoins currently in circulation might already be at risk from quantum computing. This could translate to about $500 billion in vulnerable assets as of late 2024.
Why Crypto Remains Secure for Now
Despite the alarm, Google’s Willow chip—though impressive—is far from being capable of breaking Bitcoin’s encryption. Willow performed calculations in five minutes that would take traditional supercomputers 10 septillion years. Yet, there remains a vast gap between current quantum computing capabilities and what’s needed to compromise blockchain security.
Bitcoin’s encryption relies on a 256-bit system based on the Elliptic Curve Digital Signature Algorithm (ECDSA). To break this encryption, a quantum computer would require over 1 million stable qubits—nearly 10,000 times more powerful than Willow’s current 105 qubits.
More conservative estimates suggest that approximately 317 million physical qubits would be necessary to crack a single Bitcoin key within an hour. Clearly, quantum computing has a long way to go before it poses a real threat to cryptocurrencies.
Recent market jitters and sell-offs following Willow’s announcement may reflect a misunderstanding of this technological gap. Although, an article from CoinDesk clarifies that Willow lacks the scale and error-correction capabilities required to bypass encryption methods like RSA, ECC, and AES used in Bitcoin transactions. While SHA-256 and ECDSA algorithms might eventually face quantum vulnerabilities, this reality is still distant.
Defending Against Future Quantum Threats
Experts in both quantum computing and cryptography estimate that it will take 10-20 years before quantum computers pose a meaningful threat to Bitcoin’s security infrastructure. However, the crypto community isn’t waiting idly. Ethereum co-founder Vitalik Buterin, among others, has expressed caution about quantum computing’s potential.
Developers are actively researching quantum-resistant solutions, including post-quantum cryptography protocols. These advancements suggest that Bitcoin’s security will continue to evolve alongside quantum computing progress.
The Path Forward
Google’s Willow chip is undoubtedly a major leap forward in quantum computing, but quantum computers are still a long way from being able to threaten cryptocurrency encryption. Nevertheless, the crypto industry is preparing for the future by exploring quantum-resistant algorithms and other defensive measures.
Rather than perceiving Willow as a threat, the crypto community should see it as an opportunity for innovation. This technological progress has the potential to push the boundaries of both quantum computing and cryptographic security, unlocking numerous benefits, including:
- The creation of enhanced encryption standards for safeguarding digital assets
- The development of robust, quantum-resistant blockchain protocols
- Increased investments and advancements in cryptographic research
- Greater collaboration between quantum computing and blockchain experts
develop knowledge on challenges that shape the future of financial industry
engage with a program that offers the convenience of online learning with the benefits of accreditation and global reach.
raise awareness on the importance of fintech and sustainability in finance
identify the best practices in the financial industry to spread positive changes
Go beyond the virtual classroom and network with other ambitious executives and entrepreneurs as you expand your credibility and expertise in the world’s most transformative fields.
About ECEBiS
At ECEBiS you are going to understand what will change the trajectory of the financial industry. You will develop a transversal view on the forces that are shaping the future financial industry.
From payments and lending to investment and money management, tech providers are actively shaping the future of the financial landscape - even pushing the boundaries of currency itself. You might evaluate the impact of robo-advising on health management and examine portfolio recommendations from a diversified set of RAs and attempt to identify the factors behind proposed splits between asset classes.
ECEBiS is a platform in academic research on new business models and innovative products. We investigate in fast moving sectors that are reshaping the financial world of tomorrow and pioneering new ways of doing business. We want to attract outstanding ECEBiS students in finance with experiences and exposures, who intend to