CoinShares Addresses Quantum Computing Concerns for Bitcoin
Digital asset management company CoinShares has responded to worries regarding quantum computing’s potential impact on the Bitcoin market. They argue that only a small portion of Bitcoin held in wallets is actually at risk of attack.
In a post on Friday, Christopher Bendixen, who leads Bitcoin research at CoinShares, stated that out of a total of 1.63 million Bitcoins, just 10,230 are stored in wallets with exposed cryptographic keys, making them susceptible to quantum attacks.
According to Bendixen, over 7,000 Bitcoins are in wallets containing between 100 and 1,000 BTC, while around 3,230 Bitcoins sit in wallets of 1,000 to 10,000 BTC—collectively valued at $719.1 million based on current market rates. He mentioned that these amounts might resemble typical transactions.
The vast majority, about 1.62 million Bitcoins, is held in wallets containing less than 100 BTC. Bendixen added that even under the “most ambitious and optimistic” advances in quantum computing, unlocking each Bitcoin would take about 1,000 years.
Research from CoinShares explains that potential risks arise from quantum algorithms like the Schor algorithm, which threatens Bitcoin’s elliptic curve signature, and the Grover algorithm, which could weaken the Secure Hash Algorithm 256-bit (SHA-256).
However, Bendixen contended that these algorithms won’t change Bitcoin’s fundamental characteristics, like its limited supply of 21 million coins or its proof-of-work system.
The anxiety about quantum computing has contributed to a wave of FUD (fear, uncertainty, and doubt) surrounding Bitcoin recently. Critics warn that any compromise of Bitcoin’s cryptographic integrity could jeopardize the network, currently valued at $1.4 trillion.
The Bitcoins potentially at risk reside in unspent transaction output (UTXO) wallets—these are amounts tied to unused wallet addresses, many of which date back to the early days of Bitcoin.
This situation has sparked debate within the Bitcoin community over whether to introduce a quantum-resistant hard fork or to take a wait-and-see approach.
Some proponents, like Strategy Chairman Michael Saylor and Blockstream CEO Adam Back, believe that the quantum threat is being exaggerated and that significant disruptions are unlikely for many years.
Bendixen echoes this sentiment, asserting that Bitcoin is “far from being in the dangerous zone” and that cracking its encryption would require millions of fault-tolerant qubits—far exceeding the 105 qubits demonstrated by Google’s latest quantum computer, Willow.
“While recent advancements from Google and others show progress, they do not yet meet the scale required for a genuine attack on Bitcoin,” he explained.
On the other hand, some industry figures, like Charles Edwards, founder of Capriol Investments, regard quantum computing as a potential “existential threat” to Bitcoin and advocate for immediate upgrades to enhance network security. Edwards also mentioned that addressing these issues could lead to significant increases in Bitcoin’s price, with suggestions from Blockstream researcher Jonas Nick pointing toward the possibility of incorporating post-quantum signatures.
