4.5 Million Bitcoins at Risk — Expert Urges Action: “Conquer Quantum Threats by 2026”
Experts warn that Bitcoin is susceptible to risks from quantum computing, emphasizing the need to prepare for a post-quantum future.
Summary
- Charles Edwards cautions that Bitcoin’s core cryptography might not endure quantum advancements, urging the community to enhance security before 2026.
- Deloitte estimates that 4.5 million Bitcoins, valued at roughly $550 billion, are held in early addresses that could be compromised on the blockchain.
- Progress in quantum computing, including tests of Shor’s algorithm and the leap from 256 to larger qubit counts, is shortening the timeline for Bitcoin’s security upgrades.
- While experts concur that Bitcoin is presently secure, they stress the urgency of taking measures before the risk escalates.
Bitcoin Faces Quantum Computing Risk
On Oct. 8, Charles Edwards, founder of Capriole Investments and Bitcoin advocate, raised concerns that 25% of all Bitcoin could be threatened by potential quantum attacks, as per Deloitte’s research.
He warned that if these coins stay in their current wallets, the network could incur monumental losses in the billions or even trillions once advanced quantum computing emerges.
Edwards, known for his market analysis, views Bitcoin (BTC) as a long-term asset. He emphasizes that the quantum threat is more pressing than many realize and calls for community actions to create a counteractive measure by 2026.
He expressed concern that some investors might underestimate the urgency of the situation, stating, “if we are one minute too late on quantum, Bitcoin goes to zero.”
The conversation he sparked touches on Bitcoin’s structural foundation. The network relies on the elliptic curve digital signature algorithm (ECDSA) to safeguard ownership and transaction security.
Each Bitcoin wallet comprises two keys: a public key used as an address for receiving funds and a private key for ownership verification. Transactions are validated through digital signatures generated from these keys.
Under traditional computing power, breaching the connection between a public key and its private counterpart is nearly impossible. Even the most advanced supercomputers would take longer than the age of the universe to successfully guess a single private key.
Quantum computing shifts this dynamic. By leveraging qubits rather than bits, quantum systems can explore multiple possibilities simultaneously, dramatically speeding up specific mathematical operations.
Shor’s algorithm, in theory, could derive private keys from public ones, a task beyond the capabilities of classical computers.
Currently, experts agree that Bitcoin’s encryption remains secure. Quantum computers that could jeopardize ECDSA are still theoretical and could take a decade or two to develop.
Nonetheless, the race to develop post-quantum cryptography has begun. Developers are experimenting with new algorithms based on lattice and hash functions that might surpass existing systems through forthcoming network improvements.
Lingering Risks in Bitcoin’s History
Deloitte’s examination of Bitcoin’s susceptibility to quantum threats reveals issues dating back to its inception. In 2009, Bitcoin transactions utilized a simple “pay to public key” (P2PK) method.
In this setup, the public key itself served as the receiving address. Thus, anyone scrutinizing the blockchain could easily see these public keys, including those related to the earliest mined coins, some belonging to Satoshi Nakamoto and left untouched since Bitcoin’s inception.
While this structure facilitated initial transactions, it also introduced a critical vulnerability. With the public key exposed, a future quantum computer employing Shor’s algorithm could theoretically trace back to the private key and gain access to those coins.
In 2010, Bitcoin developers moved to a new method called “pay to public key hash” (P2PKH), which obscured the public key by using a cryptographic hash instead.
A hash acts as a one-way lock, preventing retrieval of the original key from the address. The public key only becomes visible when the owner initiates a transaction from that address.
This improvement solved two issues simultaneously: it simplified address formatting and added a security layer by concealing the public key until utilized.
However, this security hinges on one principle: a P2PKH address must not be reused post a transaction. Reusing an address reveals the public key again, presenting a potential vulnerability for future quantum threats.
Deloitte examined the entirety of the Bitcoin blockchain to determine how much of the supply is still held in vulnerable addresses. It classified all coins stored in visible or reused addresses as quantum-exposed.
The analysis found approximately 2 million BTC are still linked to original P2PK addresses, primarily consisting of early mined coins that remain dormant.
An additional 2.5 million BTC are held in reused P2PKH addresses, with public keys already exposed through previous transactions.
Collectively, this amounts to around 4 million BTC, or roughly 25% of the total Bitcoin supply. At current market prices, this represents nearly $550 billion in potential exposure.
Deloitte’s findings did not project when the threat could arise, but they clearly indicated that coins which have never transacted and reused addresses are at the highest risk.
Current Landscape of Quantum Advancements
Quantum computing has moved from theoretical concepts to practical experiments. Recent advancements in hardware precision and control have sped up progress, allowing researchers to work with actual qubits rather than just simulations.
The current developmental scene showcases three main methodologies: superconducting circuits, trapped ions, and photonic systems, each aimed at maintaining stable quantum states long enough for reliable computation.
In 2024, many leading research teams achieved milestones that were once thought far-off. Quantinuum’s H-series system attained a two-qubit gate fidelity of 99.9%, indicating that errors now occur less than once in a thousand operations.
In April 2025, RIKEN and Fujitsu in Japan developed a 256-qubit processor and expressed plans to scale up to 1,000 qubits by 2026. Researchers at Harvard also improved the stability of atomic arrays, minimizing atom loss across systems with thousands of qubits.
These advancements suggest that hardware is increasingly matching theoretical aspirations. Achieving scalability—the ability to move from hundreds to thousands of qubits without losing performance—is now a central research focus.
Previously, most quantum experiments demonstrated isolated proofs of concept. The current generation of machines can sustain multi-step computations, a crucial requirement for executing complex algorithms like Shor’s.
Even with these breakthroughs, the existing gap between current systems and those capable of decrypting Bitcoin remains substantial. To break elliptic curve cryptography, a quantum computer would need around one million logical qubits.
A logical qubit isn’t a single unit but rather a group of multiple physical qubits working together to correct each other’s errors. Constructing one reliable logical qubit may require thousands of unstable physical qubits.
Current top quantum processors are still under one thousand physical qubits, keeping practical decryption far from attainable.
Preparing for the Post-Quantum Future
The progress in quantum research has reignited discussions about its implications for Bitcoin. The network’s security is based on elliptic curve digital signatures, which may be threatened when quantum systems become powerful enough.
On Sep. 2, this potential threat came closer to reality. Steve Tippeconnic, a researcher using IBM’s 133-qubit platform, utilized quantum interference to solve a simple elliptic curve problem.
The key he broke was just six bits long, an easy target for a regular computer. The experiment’s significance lay in its demonstration of control.
For the first time, Shor’s algorithm was applied on practical quantum hardware in a manner that showcased effective control. The system performed hundreds of thousands of sequential operations without devolving into randomness, achieving a level of stability that had been elusive just a few years prior.
A 2024 study titled “Downtime Required for Bitcoin Quantum-Safety” estimated that transitioning Bitcoin to a quantum-safe signature model might necessitate about seventy-six cumulative days of coordinated downtime across all nodes.
The researchers advised starting this process before the first cryptographically relevant quantum computer emerges.
Experts remain divided on when that critical moment will arrive. Some predict it will occur in the early 2030s, while others believe it may take another fifteen to twenty years.
Concerns about this risk are extending beyond academia. BlackRock recognizes quantum computing as a significant material threat in its Bitcoin ETF filings.
Solana (SOL) co-founder Anatoly Yakovenko has also intimated that Bitcoin’s current cryptography should be revamped by 2030 to evade potential vulnerabilities.
None of these developments imply an immediate threat to Bitcoin. However, they highlight a crucial transitional period. Each advance in qubit stability and error correction brings us closer to the moment when encryption standards will require evolution.
In this regard, Edwards’s warning should not be seen as alarmist but rather as prescient. The opportunity for preparation exists, but it is gradually diminishing.