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BTC Europol reports: Quantum computing cannot crack blockchain in the short term, but wallets that expose public keys are at risk
European law enforcement agency Europol released a report on Wednesday, pointing out that for the foreseeable future, quantum computers do not yet have the ability to crack blockchain networks. However, the agency also issued a warning that with the advancement of quantum technology, Bitcoin wallets with public keys will face significant security risks.
Quantum risk mainly targets public key wallets
is part of the European Cybercrime Center of Europol, which is responsible for responding to cyber threats. The center emphasized that wallets, where public keys are publicly visible on blockchain, are "the main exposure point for quantum threats."
Wallets use private keys to sign transactions, while the network verifies them using public keys. In theory, a sufficiently powerful quantum computer could use the exposed public key to deduce the corresponding private key, allowing attackers to spend the money.
Europol emphasized that there is currently no ready-made encryption solution for users whose public keys have been exposed. The report recommends a "precautionary migration" strategy, in which users should transfer assets to new wallets that have not yet disclosed their public keys to the blockchain.
Any wallet with a exposed public key may need to transfer its funds before a practical quantum attack becomes possible. The best defense is to proactively migrate to a more secure wallet before new attack vectors emerge.
As of May 2024, an estimated 6.04 million BTC (approximately 30.2% of the circulating supply) are stored at addresses on the chain where public keys have been publicly disclosed. Another estimate cited in the report shows that the number is closer to 6.9 million BTC, which includes outputs based on early public keys and coins that have been dormant for a long time in Bitcoin's earliest years.
There is disagreement within the Bitcoin community over whether to take steps to freeze coins associated with Satoshi-era wallets, some of which have remained untouched for years.
Hash functions are resilient, post-quantum updates are underway
Europol analysis found that cryptographic hash functions that bind blockchain blocks together and protect mining activities are not susceptible to quantum attacks under current technology. According to the report, a quantum computer requires approximately 2^128 quantum operations to crack the 256-bit hash function, a level of effort described as "astronomical costly under foreseeable technology."
While providing this reassuring information about the blockchain itself, the report notes that adaptation rather than collapse will be a possible outcome of the cryptocurrency system. Europol concluded: "Cryptocurrencies will not collapse due to quantum computing," but users and networks must proactively upgrade to post-quantum security standards as a precautionary measure.
Switching to post-quantum infrastructure faces challenges
Europol cited 2024 research that showed that migrating all Bitcoin wallets with exposed public keys to quantum-resistant formats could require at least 76 days of joint downtime. If each block uses only 25% of the capacity for this migration, the process may be extended by another 300 days.
Post-adoption of quantum signatures, such as those being standardized by the National Institute of Standards and Technology by NIST, faces technical obstacles. These new signatures are 10 to 120 times larger than the elliptic curve signatures currently used in Bitcoin, posing potential challenges to network capacity, transaction costs and confirmation speed.
Noun explanation: NIST (National Institute of Standards and Technology) is a U.S. federal agency responsible for developing technologies, indicators and standards, including the standardization of post-quantum cryptographic algorithms.
Other research, including a report released jointly with the Universidad Carlos III de Madrid, has explored the concept of "collect now, decrypt later", in which attackers collect encrypted data today and plan to use future quantum computers to decrypt it. Europol pointed out that no substantial evidence has been found to suggest that this method poses a major threat. However, data of long-term value is considered the most likely target for such programs.
Response from Regulators and Cryptocurrency Industry
According to reports, the European Commission has encouraged member states to migrate critical systems to post-quantum security standards (for standard applications) by the end of 2026 and complete the migration of high-risk settings by 2030.
Ethereum's post-quantum infrastructure goal is to launch in 2029. Meanwhile, Bitcoin developers are reviewing a possible soft fork proposal called BIP-360 to enhance security against quantum threats.
Another report mentioned an experiment in which more than 100 researchers used artificial intelligence to reduce the need for quantum attack resources for Bitcoin by 86.1%. Quantum computers capable of carrying out such attacks do not yet exist, and Europol has not said when it may become practical.
