Almost $500B in Bitcoin Shows Future Quantum Computing Attacks: Glassnode

About a third of the total Bitcoin that’s sold – more than 6 million dollars worth more than $469 billion at the time of this writing – is already at risk of theft if supercomputers take place, according to research published on Wednesday by blockchain analytics firm Glassnode.

The analysis, which looks at the Bitcoin blockchain to find out which coins have already disclosed their cryptographic keys, found that 6.04 million BTC, or 30.2% of what was issued, is exposure to quantum riskwhile the remaining 13.99 million BTC shows no public interest. The estimated cost of exposure is lower than the existing figures, which have been trending about 7 million BTC.

The concern stems from the underlying infrastructure of Bitcoin’s security. Each transaction is controlled by a private key, identical to the public key visible on the blockchain only under certain conditions. The concern is that a sufficiently sophisticated computer, using an algorithm called Shor’s algorithm, can recover a private key from a known public key.

In this scenario, any currency whose public key has already been disclosed would be instantly identifiable – no transaction required.

Glassnode separates the view into two different categories. The design exposure accounts for 1.92 million BTC, or 9.6% of the supply. These are coins locked in a form that reveals public keys and structures, including the “pay-to-public-key” associated with the pseudonymous founder of Bitcoin. Satoshi Nakamotomany signature scripts, and the latest Taproot results.

Much of this money can be immovable – lost wallets or sleeping bags that cannot be voluntarily transferred to safe addresses.

The largest and most actionable category is what Glassnode calls the job fair. The exposure of the work amounts to 4.12 million BTC, or 20.6% of the total supply. The money was not at risk, but it became so because of address reuse – a practice where a wallet receives multiple transactions at the same address, then broadcasts the public key at the time of the spend and leaves the rest of the money exposed.

Exchange is high in this category. Within the non-secure bucket, 1.66 million BTC, or 8.3% of the total, are associated with the exchange—representing about 40% of all non-secure Bitcoin. Visibility varies dramatically across platforms. Among the major exchanges, the listed scales of Coinbase are more visible in the structure that has not been seen, where 5% is revealed, while Binance and Bitfinex show the highest scales – 85% and 100%, respectively.

Glassnode was careful to note that the findings should not be read as a risk or solvency indicator for any particular company, stressing that the findings reflect strategic options rather than impending danger. Sovereign Bitcoin transactions fared much better: the United States, the United Kingdom, and El Salvador all reported showing zero quantum.

The report stops short of predicting when—or if—a supercomputer capable of breaking Bitcoin’s encryption will exist. It puts its analysis in place as a basis, noting that in exchange management, address cleanliness, storage management, reducing privacy reuse, and migration planning are the uses that transparency can reduce.

The findings come as advances in computing continue to accelerate around the world and as Bitcoin developers grapple with potential solutions to the protocol, including an update known as BIP-360 that could introduce a number of non-quantitative models. Other government proposals they freeze pennies which is not transferable by a fixed time.

The simulation of “Q-Day” – when a large number of computers come online that are powerful enough to break the cryptography protecting blockchains like Bitcoin and Ethereum– various starting in 2030 to 2032 and beyond. On Thursday, the United States government announced that it would investing more than $2 billion in more startups and startups designed to help American companies.