European financial supervisors have issued a warning that the rise of quantum computing could eventually undermine the cryptographic foundations of blockchain networks. The alert, from the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority, urges financial firms to prepare for emerging technology risks that could compromise digital security.
EU Supervisors Warn of Cryptography Risk
On September 23, the three EU authorities released a joint statement cautioning that quantum computing could weaken the systems that protect communications, transactions, databases, and blockchains. They emphasized that the threat to cryptography may emerge before quantum machines reach commercially viable uses. While no quantum attack has yet derived a Bitcoin private key from a public key, the supervisors called for proactive measures.
Exposed Bitcoin Public Keys Raise Concerns
Bitcoin transactions rely on public keys to verify ownership. A sufficiently powerful quantum computer could theoretically derive the corresponding private key from an exposed public key, allowing an attacker to authorize transactions from those coins. According to CryptoQuant founder Ki Young Ju, approximately 6.89 million Bitcoin could be vulnerable if quantum computing advances to that level. This estimate includes 1.91 million BTC in older pay-to-public-key (P2PK) outputs, which display public keys directly on the blockchain, and up to 4.98 million additional BTC whose public keys may have been revealed through earlier transactions.
Ju also noted that 3.4 million BTC have remained dormant for over a decade, including roughly one million coins linked to Bitcoin’s creator, Satoshi Nakamoto. If the network adopts new protections, owners would need to access their coins to move them to secure addresses; coins with lost keys could remain permanently exposed.
Bitcoin Upgrade Requires Network Agreement
Protecting exposed Bitcoin would necessitate changes to the network’s signature verification process. Developers would need to design and review an upgrade, followed by adoption by miners, node operators, exchanges, wallet providers, and users. Post-quantum signatures are typically larger than current ones, posing challenges for transaction capacity and performance. The decentralized nature of Bitcoin means no central authority can move coins on behalf of owners.
Ju also suggested the possibility of freezing older coins in exposed addresses, but such a rule could create disagreements and potentially lead to a fork of the blockchain. IBM’s roadmap targets fault-tolerant quantum computing by 2029, giving the Bitcoin community a timeline to consider as they evaluate security upgrades.
The European Commission has already set a roadmap for EU member states to transition to post-quantum cryptography by the end of 2026, with a deadline of 2030 for protecting high-risk uses. Financial firms and supervisors are urged to begin preparations now.
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