Google has released a research paper which suggests that quantum computers may be able to crack encryption standards, such as those used by Bitcoin, with 20 times fewer quantum resources than previously estimated. A Google quantum researcher, Craig Gidney, said developers must ascertain the costs of creating quantum-safe cryptocurrencies to achieve the transition process. Cryptography standards, such as RSA, may be at a higher risk of being cracked than previously thought. Bitcoin users, especially those with custodial funds, may need to measure the risks to safeguard their crypto from quantum attacks.
Quantum computing can solve complex puzzles, such as the ones used by Bitcoin to measure proof-of-work, thus presenting a new threat vector that places Bitcoin and other cryptocurrencies at risk. Bitcoin was designed for older computers, which are quickly becoming obsolete. Peter Shor, cryptographer and computer scientist, created a method called Shor’s algorithm to solve the complex puzzles used by cryptocurrencies like Bitcoin. Shor’s algorithm could be combined with a quantum computer to crack crypto wallets rapidly. An efficient algorithm, combined with a powerful computer, could increase the risk of a crypto portfolio, including digital assets that use proof-of-stake algorithms.
Craig Gidney and Sophie Schmieg, quantum researchers at Google, discussed their findings on their Google security blog. They addressed the ability of quantum computers to crack public key cryptography, particularly RSA, which could be compromised with a quantum computer of around 1 million noisy qubits. They made this conclusion after taking into account recent advancements in quantum computing. The number of qubits required to crack cryptography is lower than previous estimates. The researchers outlined strategies corporations could take to mitigate the risks of quantum computers, such as collaborating with the National Institute of Standards and Technology (NIST) to transition to a post-quantum computing world. Symmetric cryptography is largely unaffected by this attack. However, cryptography, such as that used by cryptocurrencies, is vulnerable to this attack due to the public exposure of addresses and the longevity of these wallets, providing attackers with a target they can attack for an extended period. NIST has set a timeline to phase out vulnerable systems by 2030 and ban them by 2035. Google has been confirming its strategy with NIST by implementing PQC signatures on its Cloud KMS service.
IBM’s Condor, the most powerful quantum computer to date, can only reach 1,121 qubits, which is way short of the million qubits needed to crack RSA encryption. Cryptocurrency seems to be safe for now, unless a new technological innovation can dramatically increase the number of qubits. Google’s Sycamore, another quantum computer, can only get 53 qubits. However, the trend of quantum development suggests that crypto users must take these risks seriously. The Google researchers argue that the increased risk occurs because of technological advancements such as improved error correction and better algorithms. Modular exponentiation, for example, has been made more efficient, effectively doubling its speed. Modular arithmetic is a vital part of cryptographic systems. Further, the researchers found that error correction improvements can speed up their algorithm. They found that creating a separate layer for error correction allowed the qubits layer to be more dense, holding more information to be processed, speeding up the algorithm overall. The researchers could drop the qubit requirement by optimising code at a programmable level. Hackers could further exploit such optimizations to secretly lower the qubit requirements until a future date when quantum computers are more accessible.
In early May 2025, BlackRock added a line to their iShares Bitcoin Trust (IBIT) filing, stating that quantum computing poses a risk to the long-term security of Bitcoin. The filing states that if quantum computing advances enough, it could be used to crack the underlying encryption algorithms used to power Bitcoin. BlackRock is concerned that quantum computers will undermine crypto markets and technology. Quantum computers can potentially disrupt the business model of Silicon Valley, potentially causing a market crash. BlackRock, the world’s largest fund manager, should consider the potential risks of quantum computers. The fact that such a large bank like BlackRock is taking the risk seriously shows that quantum risks could be closer than we think.
