The rapid advances in quantum computing that sparked growing concerns in the cryptocurrency sector behind schedule last year, particularly regarding Bitcoin’s long-term resilience, appear to have once again come to featherlight.

CryptoQuant, an on-chain data analytics platform, recently highlighted these threats in a row posts on X titled “Quantum Computing Is a Growing Risk for Bitcoin.”

The discussion focused on two key aspects: bitcoin mining security and private key vulnerabilities, which could face earnest challenges as quantum technologies advance.

Quantum threats to bitcoin mining and network security

Bitcoin’s proof-of-work (PoW) system relies on computing power to validate transactions and secure the network. The SHA-256 hash function, integral to Bitcoin mining, now provides forceful security, preventing malicious actors from manipulating the blockchain.

However, CryptoQuant warns that quantum algorithms, particularly those using advanced algorithms such as Grover’s algorithm, can significantly “speed up hash resolution processes.”

If quantum computers become able to outperform classical mining hardware, it could tip the balance of power in mining, allowing miners equipped with quantum devices to dominate block validation. This dominance would not only disrupt network consensus, but also potentially threaten Bitcoin’s decentralized structure.

CryptoQuant emphasizes the importance of maintaining a significant share of non-quantum computing power on the network. A well and diverse mining ecosystem would reduce the risks posed by any entity gaining disproportionate control through quantum technology.

Although quantum supremacy in mining is speculative at this stage, ongoing developments in this field require close monitoring by interested parties, including miners and developers.

Private Key Security: Vulnerabilities and Adaptations

Beyond mining, quantum computing also poses risks to the security of the BTC private key. The Bitcoin network uses cryptographic systems to secure wallets and transactions, with public and private keys forming the basis of ownership.

According to CryptoQuant, Shor’s algorithm could theoretically allow quantum computers to deduce private keys from public keys, thus compromising wallet security.

Pay-to-Public-Key (P2PK) addresses are particularly vulnerable, where the public key serves directly as the wallet address. Pay-to-Public-Key-Hash (P2PKH) addresses, on the other hand, provide an additional layer of security by mixing public keys.

Private key security and quantum risk

Another major problem is Shor’s algorithm, which could theoretically allow quantum computers to find private keys from public keys. Pay per public key (P2PK) addresses are most vulnerable to quantum attacks because the public key directly serves… pic.twitter.com/q2NBvbwGLe

— CryptoQuant.com (@cryptoquant_com) January 7, 2025

However, when BTC is transferred from these addresses, the public key is exposed, increasing vulnerability to quantum attacks. CryptoQuant has also observed a noticeable augment in the apply of P2PKH addresses, which has increased by 14% in recent months.

While the exact reason for this change remains unclear, it suggests increased awareness and caution among Bitcoin holders regarding quantum security vulnerabilities.

Featured image created with DALL-E, chart from TradingView