A new report by crypto analytics firm Glassnode highlights emerging risks to Bitcoin from advancements in quantum computing, suggesting that nearly 9.6% of Bitcoin’s total supply could be “structurally insecure.” Certain types of Bitcoin transactions expose public keys, which might render the currency vulnerable if decoded by quantum computers.
Which Bitcoin Transactions Are at Risk?
Glassnode identified approximately 1.92 million Bitcoins in danger, stemming from transactions that expose crucial data. Particularly susceptible are addresses linked to Satoshi Nakamoto’s Pay-to-Public-Key (P2PK) outputs, legacy Pay-to-Multisig (P2MS) formats, and the more recent Pay-to-Taproot (P2TR) addresses. Each transaction for these types records sensitive cryptographic keys directly on the blockchain.
Satoshi Nakamoto’s wallets account for the largest share, holding about 1.1 million BTC. Early coins and those sent to Taproot addresses also feature prominently in the exposed group, containing around 620,000 and 200,000 BTC, respectively.
Glassnode advocates for migrating to new transaction structures like Pay-to-Merkle-Root (P2MR) to withstand future quantum threats. Although P2MR removes certain vulnerabilities, it doesn’t yet offer complete quantum resistance.
How Are Bitcoin Holdings Distributed Amid Risks?
About 13.99 million Bitcoin—around 69.8% of the total—is considered secure against potential quantum threats, as most have transitioned to safer address types. Previous estimates by Ark Invest pegged this figure at 65%, indicating a positive trend toward securing holdings.
However, 4.12 million BTC, accounting for 20.6% of the total supply, remain “operationally insecure” due to poor managerial practices in key or address management. Many corporate and institutional wallets fall within this precarious category.
Institutional data revealed:
- 100% of Franklin Templeton, WisdomTree, and Robinhood BTC are insecure.
- Revolut shows 99% exposure.
- 52% of Grayscale’s BTC is at risk.
- Only 2% of Fidelity’s Bitcoin is deemed vulnerable.
Crypto exchanges demonstrate varying levels of exposure; for instance, 85% of Binance’s and most of Bitfinex’s holdings are insecure, while only 5% of Coinbase’s Bitcoin faces quantum threats.
Addressing Bitcoin’s Quantum Vulnerabilities
To bolster Bitcoin’s defenses against quantum threats, experts suggest minimizing address reuse and migrating existing holdings to secure address standards. Implementing contingency plans could fortify Bitcoin as quantum computing evolves.
Potential threats are largely theoretical unless Bitcoin’s cryptographic base is fundamentally disrupted. According to Ark Invest, a quantum computer capable of such disruption requires immense computational power, far beyond current limitations.
