In a striking assertion, Project 11 CEO Alex Pruden has thrown a wrench into the ongoing discourse surrounding Bitcoin’s readiness for quantum computing threats. Previously, a CoinShares estimate suggested that a mere 10,200 bitcoins were stored in ‘genuinely’ quantum-vulnerable legacy addresses. Pruden, however, contends that the actual number could be as high as 6.9 million BTC, raising alarms about the readiness of the crypto ecosystem in the face of potential technological advancements.
This contention has caught the attention of industry experts, notably Castle Island partner Nic Carter, as the debate moves from academic discussions into mainstream investor consciousness. The critical question now isn’t whether quantum computing could jeopardize current signature schemes but rather how much Bitcoin might already be vulnerable given the methods used to manage keys on-chain and the ensuing necessity for ecosystem-wide migration.
Why ‘Only 10,000’ Bitcoin Are The Wrong Estimate
Central to Pruden’s argument is the definition of quantum vulnerability. He posits that this threat extends beyond the confines of outdated pay-to-public-key (P2PK) outputs to encompass any address that has executed even a single transaction, thus revealing its public key on-chain when a transaction is signed. Coins left in such unspent transaction outputs (UTXOs) could be accessible to an attacker capable of uncovering a private key from a public key.
Pruden cites a “constantly updated tracker” maintained by Project Eleven, indicating that a staggering 6,910,186 BTC could be at risk. To substantiate his claims, he references a technical report from Chaincode Labs outlining the post-quantum threats posed to Bitcoin.
Moreover, he draws attention to the holdings attributed to Satoshi Nakamoto, which total 1,096,152 BTC spread across 21,924 addresses. Pruden considers these dormant coins as particularly vulnerable in light of his expansive definition of quantum risk.
In response to the 10,200 BTC figure propagated by CoinShares, Carter remarked, “As much as I respect Chris and his work at CoinShares, he’s wrong on this one.” His remarks highlight a growing unease within the community regarding underestimating quantum risks.
Pruden places the Bitcoin conversation within a larger context of major technology firms and security institutions gearing up for a post-quantum landscape. He cites a significant blog post from Google, where leaders in the field stress the urgency of transitioning to post-quantum cryptography as a systemic necessity requiring organized effort and swift implementation.
Complementing his analysis, Pruden points to recent findings from Google suggesting that breaking RSA-2048 might necessitate merely “~1 million noisy qubits,” a figure noticeably lower than earlier estimates. He argues that this development compresses the timeline for potential quantum threats, despite Bitcoin relying on ECDSA, not RSA.
He references prominent theoretical computer scientist Scott Aaronson, who cautions against a false sense of security regarding Shor-vulnerable systems: “…if you think Bitcoin, and SSL, and all the other protocols based on Shor-breakable cryptography are safe for the next 5 years, your confidence is unwarranted.” This sentiment underscores the unpredictable nature of technological advancements.
Pruden’s overarching conclusion emphasizes the need for proactive planning in the wake of quantum advancements. He scrutinizes the CoinShares estimate, arguing that it overlooks the intricate operational realities tied to migrating a decentralized system already in place. He highlights that transitioning millions of distributed keys without centralized governance poses unique challenges, noting that the ownership of assets strictly relies on digital signatures, leaving no safety net.
Moreover, he cites peer-reviewed findings indicating that the Bitcoin blockchain might need to suspend operations for an estimated 76 days to facilitate migration transactions in the best-case scenario. Such a timeframe illustrates the urgency of addressing even a distant quantum threat without delay.
Critically, Pruden challenges the notion that input from hardware wallet manufacturers can be taken at face value in gauging quantum threats, suggesting that these companies may downplay the urgency to protect existing products.
As the Bitcoin market continues to evolve, with BTC trading at around $69,050 at press time, the ramifications of Pruden’s assertions may reverberate throughout the crypto space, urging stakeholders to reconsider their quantum preparedness strategies.
