Bitcoin Quantum Threat: Coinbase Urges Action as 7M BTC Exposed

Coinbase urged Bitcoin developers to accelerate preparations against future quantum computing attacks on Oct. 13. The exchange warned that upgrading Bitcoin’s cryptographic security could take several years.

The warning followed growing concern about cryptocurrency addresses with exposed public keys. Project Eleven estimated that approximately 7.1 million BTC could face future quantum attacks.

Coinbase outlined several technical proposals, including BIP-360, hybrid signatures, and institutional custody requirements. However, the recommendations do not represent approved upgrades to Bitcoin’s network.

Coinbase Recommends Solutions to Bitcoin Quantum Threat

In the blog post, Coinbase also recommended solutions to the quantum computing threats. While warning that the Bitcoin transition to post-quantum (PQ) signature schemes is complex and will take years, the exchange called for preparation to commence immediately.

Coinbase Bitcoin quantum computing recommendation also included other proposed technical solutions. The exchange proposed that the PQ signature systems should have a flexible design that allows multiple signature systems.

The exchange acknowledged that some of the currently proposed solutions, P2MR (BIP-360) and P2TRv2, appear to offer this flexibility.b

Beyond that, it called for an approach that would allow active Bitcoin wallets to use hybrid signature systems, enabling both legacy signatures and PQ schemes.

The exchange also recommended stateless PQ signature schemes alongside stateful ones, given their security. Coinbase further emphasized that any PQ scheme must be compatible with  MPC, as this is a major consideration for institutional users.

7 Million Worth of BTC At Risk of Quantum Computing Threat

The statement from Coinbase comes amidst recent concerns about the threat quantum computing poses to crypto. Ethereum Foundation researcher Justin Drake warned last week that the crypto community would get into bunker mode due to quantum computing threats.

The researcher cited breakthroughs in AI for advanced mathematics, noting that AI models could soon recover private keys from public keys.

According to a report by Project Eleven last year, around 7 million Bitcoins are in addresses whose public keys have already been exposed on-chain. This makes it vulnerable to a future quantum attack. On Ethereum, 65% of ETH face similar exposure.

With several of these BTC in lost or dormant addresses, there are concerns that quantum computing could expose them. Coinbase also acknowledged the need for a path for addresses to migrate late to the PQ schemes.

However, Coinbase noted that this should be considered independently from the technical work focused on adding PQ signature schemes to Bitcoin as soon as possible.

Interestingly, Bitcoin has more than quantum computing to contend with. A few months ago,  the Bitcoin cold wallet Cold Card was affected in a broad attack that led to the loss of over $100 million.

A more recent incident has seen Ledger users lose around $100 million due to a supply chain attack targeting one of its resellers, Cryptobillis. The bad actors implanted a spy chip in Ledger’s cold wallet, using it to access users’ recovery phrases and steal assets.

This article is for informational purposes only and does not constitute financial, investment, or cybersecurity advice.