Quantum Computers Could Disrupt Bitcoin Politics, Risking Lost Coins

A leading on-chain analyst, James Check, has cautioned that the rise of powerful quantum computers could create major challenges for Bitcoin—not due to the technology itself, but because of the inability of the community to agree on how to respond to it. The fate of millions of dormant Bitcoin could hang in the balance if swift action isn't taken.

Key Takeaways

James Check warns that quantum computers pose a significant threat to dormant Bitcoin.
A consensus on freezing coins not transferred to quantum-resistant addresses is unlikely.
Approximately 32.4% of Bitcoin hasn't moved in five years; 16.8% has been inactive for over a decade.
Quantum machines could crack current Bitcoin encryption, risking lost coins.
Some experts argue that there's no immediate threat, while others urge for fast action.

Quantum Computers Disrupt Bitcoin Politics

The Risk of Dormant Bitcoin in a Quantum Future

James Check, founder of Checkonchain, highlighted a critical concern: Bitcoin's consensus challenge might endanger the many coins that have sat idle for years. In a post on platform X, he stated that there is virtually “no chance” that the Bitcoin community would agree to freeze coins that remain untransferred to quantum-resistant addresses.

The intricate governance model and political dynamics within the network complicate quick responses, leaving dormant coins particularly susceptible to quantum threats. Data from BitBo reveals that around 32.4% of all Bitcoin has not been moved in the past five years, while 16.8% has been inactive for more than ten years.

Bitcoin Inactivity Statistics

The status of these unavailable coins—whether they are lost, inaccessible, or simply held indefinitely—remains debatable. Check warns that these stagnant coins are likely to be the first targets if quantum computers successfully breach Bitcoin’s current encryption methods.

Check's observations respond to insights from Delphi Digital’s report, which identified that the Bitcoin community's struggle is "not technological." They stated that while future post-quantum versions of Bitcoin will be possible, the real question lies in how to protect the substantial amount of Bitcoin currently in non-quantum-resistant formats.

As it stands, Bitcoin utilizes elliptic curve cryptography through ECDSA and Schnorr signatures, both of which fall prey to Shor’s algorithm once advanced quantum computers become operational. Although several quantum-resistant signature schemes have been approved by the U.S. National Institute of Standards and Technology, incorporating those standards requires widespread community consensus.

Adaptation Amid Rising Quantum Threats

The potential threat has sparked considerable debate across the cryptocurrency landscape, especially as fears rise about the pace at which quantum hardware development could enable feasible attacks. Currently, quantum machines operate around 1,000 physical qubits, but tech giants like IBM, Microsoft, Amazon, and Google are actively pursuing advancements aimed at achieving hundreds of thousands or even millions of qubits within the next ten years.

Research suggests that machines equipped with around 126,000 physical qubits could feasibly compromise the elliptic curve signatures safeguarding Bitcoin wallets. Furthermore, some projections indicate that as few as 2,300 logical qubits might suffice to crack Bitcoin’s encryption, possibly creating a viable window for an attack in the late 2020s or early 2030s.

Cybersecurity experts have cautioned that attackers may already be preparing for future breakthroughs with strategies like “harvest now, decrypt later,” which involves gathering data from public blockchains in anticipation of future quantum advantages.

David Carvalho, CEO of Naoris Protocol, emphasized the vulnerability of older address formats, noting that approximately 6 to 7 million BTC are kept in address types that expose public keys directly. In response to these warnings, several governments and institutions have begun altering their approaches.

In September, El Salvador took measures by redistributing its 6,284 BTC national reserve across 14 addresses to limit the risk of quantum attacks. Prominent financial institutions have also recognized this threat, with BlackRock addressing quantum risks in Bitcoin ETF filings, and Tether's CEO Paolo Ardoino highlighting concerns about long-dormant wallets.

Despite these escalating concerns, not all experts deem the threat urgent. Blockstream CEO Adam Back stated last week that quantum attacks are unlikely for at least two to four decades, arguing that current machines are too noisy and require extensive error correction.

He noted that Bitcoin could adopt post-quantum standards well before any machine capable of breaking SHA-256 becomes a reality. The discussion reflects a broader divide in the cryptocurrency community regarding the urgency of action in response to the impending quantum threat.

Meanwhile, Solana co-founder Anatoly Yakovenko has encouraged the community to fast-track its quantum-resistant plans, warning earlier this year that research driven by AI could significantly shorten expected timelines. Former Ethereum contributor John Lilic has also forecasted that quantum threats might emerge as serious concerns before the decade concludes.