The Quantum Threat to Bitcoin: How a Quantum Computer Could Steal Your Cryptocurrency

The first part of this series explored the fundamentals of quantum computing, but understanding how it works is only half the story. To grasp the potential threat to bitcoin, it's essential to comprehend what a quantum computer is attacking and where the weakness lies. This piece begins by examining bitcoin's encryption, which utilizes elliptic curve cryptography to verify ownership. Each wallet has a private key, a secret number, and a public key derived from it through a mathematical operation on the 'secp256k1' curve. The process can be thought of as a one-way map, where starting from a known location, taking a certain number of steps defined by the curve's math leads to a public key that can be verified by anyone but cannot be reversed to find the private key. This one-way function is the core of bitcoin's security model, with the private key serving as proof of ownership and the public key being safe to share. However, a quantum algorithm known as Shor's algorithm can efficiently break this encryption by solving the elliptic curve discrete logarithm problem, which would take a classical computer longer than the age of the universe. Shor's algorithm works by converting the problem into finding the period of a function, which is then solved using quantum properties such as superposition, entanglement, and interference. The recent paper by Google's Quantum AI division significantly reduced the estimated number of qubits needed to run Shor's algorithm against bitcoin's encryption from millions to fewer than 500,000, introducing a practical attack scenario where parts of the algorithm can be precomputed, leaving only the second half to be completed once a target public key appears. This reduces the time needed to derive a private key to about nine minutes, which is alarming given bitcoin's average block confirmation time of 10 minutes. The bigger concern is the approximately 6.9 million bitcoin that are already vulnerable to an 'at-rest' attack because their public keys have been exposed on the blockchain. These coins can be targeted without a time constraint, making them highly susceptible to a quantum computer running Shor's algorithm.