Quantum Computers: A Challenge for Bitcoin's Politics, Not Its Code

Summary:
The increasing capabilities of quantum computers pose a challenge for Bitcoin, primarily related to consensus rather than technology. Experts believe that moving forward will require tough decisions regarding older Bitcoin addresses and the assets they hold, raising questions about accessibility and security.

Key Takeaways

The threat posed by quantum computers to Bitcoin is more about community consensus than technical feasibility.
A significant portion of Bitcoin remains inactive, leading to questions about accessibility and storage of these assets.
New quantum-resistant solutions have been proposed, but older Bitcoin addresses may remain vulnerable.
Other blockchains have successfully developed solutions that could apply to existing transactions, unlike Bitcoin.

Quantum computers won’t break Bitcoin’s code, they’ll break its politics

Quantum Threat: Consensus vs. Technology

James Check, the founder and chief analyst at Checkonchain, stated on Monday that the challenge presented by quantum computers is largely a matter of consensus in the Bitcoin community rather than a purely technological issue. He tweeted that there is virtually no chance of reaching a consensus to freeze Bitcoin’s operations in the face of this potential threat.

According to BitBo data, a concerning 32.4% of all Bitcoin has not been moved in the last five years. Of this, 16.8% has remained untouched for over ten years, while 8.2% has been inactive for seven to ten years, and another 5.4% for five to seven years. The debate centers on how many of these assets are completely lost or simply not accessible, versus those that are deliberately stored away.

Check's statements were a response to insights from Ceteris Paribus, head of research at Delphi Digital. Paribus highlighted that the issue surrounding Bitcoin's vulnerability to quantum threats is not merely technical, suggesting that while quantum-resistant Bitcoin may be possible, it doesn't address the fate of older coins.

Bitcoin hodl waves chart. Source: BitBo

Addressing New Challenges

The foundation for creating quantum-resistant Bitcoin exists, with the U.S. National Institute of Standards and Technology (NIST) having recognized multiple post-quantum public-key cryptography schemes last year. If the Bitcoin community chooses to adopt these, quantum-resistant addresses could be implemented through Bitcoin Improvement Proposal 360.

However, Bitcoin currently relies on the Elliptic Curve Digital Signature Algorithm (ECDSA) for older addresses and Schnorr signatures for Taproot — both are susceptible to quantum threats. Hence, it is likely that a new post-quantum signature standard would need to be introduced. This leads to uncertainty about what will happen to the considerable amount of Bitcoin stored in addresses that are not quantum-resistant.

During a previous conversation with Cointelegraph, Adam Back, an early cypherpunk and a figure referenced by Satoshi Nakamoto in the Bitcoin white paper, indicated that a solution will involve a community choice: either abandon the older, vulnerable addresses or risk those funds being compromised by quantum technologies. He emphasized that the community should consider allowing those older coins back into circulation.

Solutions in the Blockchain Ecosystem

While experts concur that creating a solution for Bitcoin that is backward compatible and protects older addresses may be challenging, other blockchain networks have already begun to adopt safeguards against quantum threats.

In July, a group of researchers presented a quantum-resistant fix that did not require any changes to existing signatures on certain blockchains like Sui, Solana, Near, and Cosmos. Unfortunately, this solution does not extend to Ethereum or Bitcoin. The proposed implementation utilized specific characteristics of the Edwards-curve Digital Signature Algorithm from those networks and involved creating a zero-knowledge proof system to validate ownership of a private key derived from a seed.

As the threat of quantum computing continues to evolve, Bitcoin and its community will need to navigate a delicate balance between innovation and tradition to address these emerging challenges.