Iceberg Alert: Quantum Computing Could Threaten One-Third of Bitcoin, 6.5 Million BTC Facing Ultimate Security Test?

Coinbase Global Investment Research Director David Duong issues a major warning, pointing out that the pace of quantum computing development may surpass market expectations, with approximately one-third of Bitcoin supply potentially facing the risk of “long-range quantum attacks” due to their public keys being exposed on-chain. Based on on-chain data from the 900,000th block, it is estimated that about 6.5 million Bitcoins (worth around $100 billion) are stored in addresses with vulnerable types.

This risk has garnered attention from institutions; BlackRock explicitly listed quantum computing as a risk factor in its revised Bitcoin ETF prospectus. This marks a new phase where Bitcoin’s security narrative is shifting from theoretical discussion to practical risk assessment and defensive preparations.

The Fragile Foundation: One-Third of Bitcoin Exposed to “Q-Day” Threat

As Bitcoin’s price fluctuates in search of direction, a more fundamental and silent threat is accelerating on the horizon. Duong’s latest analysis reveals a stark reality: Bitcoin’s long-term security may be entering a new “regime.” The core issue revolves around a concept called “Q-Day”—the day when cryptographically relevant quantum computers become powerful enough to break current public key cryptography. For Bitcoin, this day is not imminent, but its shadow is already cast over current valuation frameworks.

Specifically, the threat stems from the potential confrontation between Bitcoin’s elliptic curve digital signature algorithm and the computational power of quantum computers. Bitcoin wallets’ security relies on a sophisticated asymmetric cryptographic design: private keys generate public keys, which in turn generate addresses. In classical computing, deriving the private key from the public key is computationally infeasible. However, once a sufficiently large quantum computer capable of running Shor’s algorithm is available, it could theoretically crack this mechanism, deriving private keys from exposed public keys. Duong points out that the key issue is that approximately 32.7% of Bitcoin supply (around 6.5 million coins) are stored in address types whose public keys are already visible on the blockchain.

These high-risk addresses mainly include: early Pay-to-Public-Key outputs, some bare multi-signature scripts, and certain Taproot constructs where public keys are exposed on-chain. Among these, a particularly notable subset is “Satoshi-era” Bitcoin—coins that have remained untouched for over a decade. Every Bitcoin transaction, when spent, temporarily exposes the public key, creating a very short “short-range attack” window for attackers with immediate quantum capabilities. These vulnerabilities are not design flaws but represent a generational challenge to existing cryptography standards in the face of disruptive quantum technology.

Core Data Analysis of Bitcoin’s Quantum Risk

Based on Duong’s analysis of data from the 900,000th block, Bitcoin’s quantum risk can be quantified along several core dimensions. First, the potentially affected amount is about 6.5 million BTC, accounting for roughly 32.7% of the total supply. These vulnerable assets are mainly concentrated in specific address types: including early legacy Pay-to-Public-Key outputs, bare multi-signature scripts, and those with exposed public keys in Taproot constructs. Additionally, a often-overlooked risk point is that each Bitcoin transaction momentarily exposes the public key, creating a theoretical attack window. Industry consensus recognizes that the most representative vulnerable assets are those long dormant “Satoshi-era” coins.

From an attack perspective, the threat primarily arises from two classes of quantum algorithms: Shor’s algorithm for deriving private keys from public keys, and potentially threatening mining consensus with Grover’s algorithm. Currently, the industry consensus is that signature security (i.e., private key exposure risk) is a more urgent concern than the potential impact on mining economic models. These data collectively depict a landscape where quantum threats are not evenly distributed but highly concentrated in specific historical on-chain footprints.

The Race Against Time: From “Future Concern” to “Urgent Priority”

How urgent is the threat of quantum computing to Bitcoin? There is a significant divergence among industry experts and researchers, highlighting the process of risk moving from fringe discussion to the central stage. On one side, figures like Blockstream CEO Adam Back argue that claims of an “imminent quantum crisis” are exaggerated. He notes that developers have long been quietly researching long-term protection schemes without alarming the market, and the Bitcoin community has enough time and wisdom to address this challenge.

On the other hand, figures like Coinbase’s Duong and venture capitalist Nic Carter sound a more urgent alarm. Carter openly criticizes the ecosystem for many still being in denial, pointing to signals such as governments (e.g., US and EU urging critical infrastructure to migrate to post-quantum cryptography by 2035) and surging investments in quantum companies as signs that risks are approaching. Some quantum researchers are more aggressive, with predictions suggesting that quantum computers could crack Bitcoin’s cryptography within 4 to 5 years.

This sense of urgency has already reached mainstream financial institutions. In May 2025, BlackRock explicitly listed quantum computing as a risk factor in the revised prospectus of its flagship product, the iShares Bitcoin Trust. This move is no coincidence; it signals that large asset managers are now formally incorporating such long-term technological risks into their due diligence. This is not only a compliance requirement but also a signal: institutions managing hundreds of billions of dollars must consider all potential threats to the integrity of their underlying assets.

The divergence over timelines underscores the importance of the issue. Whether “Q-Day” arrives in ten years or longer, the window for proactive measures is closing. Charles Edwards, founder of Capriole Investments, warns that without early upgrades, quantum threats could materialize within a decade. The paradox in strategy is that significant network upgrades are inherently difficult; waiting until the threat is imminent could lead to rushed decisions and market turmoil. Therefore, the core discussion has shifted from “Will it happen?” to “When will it happen?” and “How do we prepare?”

Upgrading Bitcoin’s “Shield”: Technical Paths and Governance Challenges

Bitcoin is not defenseless against quantum threats. The global cryptography community and Bitcoin core developers have already begun exploring post-quantum cryptography solutions. In 2024, the US National Institute of Standards and Technology (NIST) finalized several post-quantum encryption standards, providing a technical toolbox for all digital systems, including Bitcoin. Potential approaches include lattice-based signatures and hash-based schemes, which are believed to resist quantum attacks.

However, deploying a quantum “shield” for Bitcoin involves far more than technical complexity—it faces social and governance challenges. This will likely require a hard fork—all nodes must upgrade their software to adopt new rules. This process faces several major hurdles: first, how to handle “vulnerable coins” that have already been exposed? Nullifying them outright could cause fairness and legal disputes; attempting to “rescue” them is technically complex. Michael Saylor, Strategy’s chairman, offers an optimistic view: quantum breakthroughs could ultimately “strengthen” Bitcoin, as active coins migrate to new standards, while inaccessible old coins are frozen forever, reducing effective supply and potentially increasing price. But this process will be painful.

The biggest obstacle may be long-dormant wallets. If their owners no longer appear, these coins will remain forever vulnerable, becoming permanent “fragile assets” on the network. This is not only a security issue but also an ethical and economic design challenge. The entire upgrade process requires broad consensus among developers, miners, exchanges, custodians, and users—an extraordinary coordination challenge. Unlike simple feature upgrades, this is a “heart surgery” on the network’s security foundation.

Therefore, current preparations are more about risk education, scheme discussion, and community mobilization than coding alone. Duong emphasizes that signature security is the immediate priority, while the impact of quantum mining on economic models is secondary. This prioritization guides the community to focus R&D resources on upgrading signature algorithms. Some researchers even warn that adversaries may already be collecting and storing public key data today, waiting for quantum computing to mature for retrospective attacks. This adds a layer of time pressure to defensive upgrades.

The Domino Effect: How Quantum Computing Could Reshape the Entire Crypto Ecosystem

Bitcoin, as the largest and most prominent cryptocurrency, faces only the tip of the iceberg. The rise of quantum computing fundamentally questions the entire digital era built on asymmetric cryptography. Ethereum, many Layer 1 blockchains, and all cryptographic assets and DeFi protocols relying on similar signature schemes will face the same challenge. The entire crypto industry’s value storage, identity verification, and transaction security models may need profound innovation.

This is not just a security upgrade—it could trigger a chain of market reactions. First, investors may reassess the quantum resistance of different assets. Projects that adopt modern, easily upgradable signature schemes or focus on post-quantum cryptography from the outset might enjoy valuation premiums. Second, the existence of a large amount of “vulnerable Bitcoin” is a source of uncertainty. As expectations of quantum progress rise, there could be a migration from old addresses to perceived safer new addresses, affecting liquidity and market stability.

On a more optimistic note, this imminent challenge could serve as a catalyst for advancing crypto and global digital infrastructure. The technical solutions, upgrade paths, and governance experiences developed by Bitcoin and the crypto community in tackling this problem will provide valuable references for traditional finance, IoT, and national security sectors. It forces us to consider how to coordinate critical upgrades in decentralized systems—an unprecedented social experiment.

Ultimately, the threat of quantum computing to Bitcoin is less a prophecy of destruction and more an ultimate stress test. It examines the network’s adaptability, resilience, and wisdom in the face of existential crises. Duong’s report and BlackRock’s disclosures should not be seen merely as bearish signals but as necessary and timely warnings. They remind this industry, worth trillions, that while pursuing price gains and innovation, it must not neglect the cryptographic foundations that underpin its survival amid slow but inevitable generational shifts. Bitcoin’s story is not just about price—it’s about how a decentralized value system maintains its security and trustworthiness over time. The quantum era will be its most severe and most compelling chapter since inception.

What Is the Threat of Quantum Computing to Bitcoin?

Simply put, the threat lies in quantum computers’ ability to break the “asymmetric encryption” that protects Bitcoin wallets.

Classical vs. Quantum Computers: Classical computers use bits (0 or 1), while quantum computers use quantum bits (qubits), which can exist in superpositions of 0 and 1 simultaneously. This allows them to process vast amounts of data in parallel, solving certain problems much faster than classical computers.

Two Main Attack Vectors on Bitcoin:

1. Breaking Digital Signatures (Core Threat): Bitcoin uses elliptic curve digital signatures to prove ownership of private keys. Classical computers cannot derive private keys from public keys, but quantum computers running Shor’s algorithm could efficiently do so. Success would enable theft of coins from the affected address.
2. Mining Consensus Threat (Secondary): Bitcoin mining relies on SHA-256 hashing. Quantum algorithms like Grover’s algorithm could accelerate finding valid hashes, potentially disrupting the current mining competition and economic incentives.

The critical point is that this threat is most direct for addresses where the public key has already been exposed. Many early transactions and unspent outputs have revealed public keys, making about a third of Bitcoin holdings vulnerable. For coins that have only used addresses (hashes of public keys) and never revealed the public key itself, the threat is currently less immediate, as they require additional steps to attack.