Crypto survived crashes, hacks, ban and uncountable FUD. However, the next threat is not another crypto winter, but rather a computer.
For years, crypto has had the same enemies.
Market crashes.
Regulation.
Hackers.
Exchange failures.
However, a threat is quietly forming beyond the crypto market and it doesn't matter if Bitcoin is valued at $20,000 or $200,000.
Quantum computing.
As opposed to the typical crypto crash, you cannot just sit and wait for the market to bounce back.
The weird link between quantum computers and Bitcoin.The odd relation between quantum computers and Bitcoin.
Cryptography plays a vital role in ensuring the security of Bitcoin.
You don't keep your coins within a physical wallet. Ownership is managed by cryptographic keys which enable transactions to be authorized.
These systems are believed to be impractical to break today with computers.
However, there are problems that quantum computers are being developed to solve much faster than computers are.
Now that's interesting.
But recent studies have reduced some of the estimates of the resources needed for quantum attacks on cryptographic operations used by Bitcoin and Ethereum. As yet, no researchers are claiming that there's a working machine today that could steal crypto but the distance between “science fiction” and “something that developers should prepare for is narrowing.
And crypto developers are already preparing
Ethereum is not overlooking the issue.
Its developers have been striving to quantum-proof its network, with a goal to achieve that status in the majority of base-layer nodes by December 2029.
There is currently no single network-wide deadline for Bitcoin, although there are proposals to move away from the current cryptographic systems towards post-quantum signatures.
That's a significant fact for me:
But the truth is not that quantum computers are going to break Bitcoin.
They aren't.
The truth is that developers are making preparations years in advance of the threat becoming real.
That's a fair bet on what they should do.
The $300 million signal
This is what got my attention.
The U.S. Commerce Department recently announced up to $100 million each for Rigetti, D-Wave and Quantinuum to support the development of quantum computing hardware and related technology.
This does not imply that the government thinks Bitcoin is going to be hacked soon.
It's a sign that quantum computing is considered a serious strategic technology.
And crypto is one of the industries that needs to consider what to do when the technology matures.
The biggest problem might actually be migration
Imagine developers announce:
“Quantum-resistant cryptography is here.”
Sounds great.
However, there's a hard part to come:
Transferring the established financial network onto an equally giant new financial infrastructure based on cryptography.
There is no magic ‘update security' button for Bitcoin and Ethereum.
There are wallets, exchanges, smart contracts, old addresses, dormant coins and millions of users involved.
The value of some assets might not be able to be transferred by the owner if they are not migrated in time for the arrival of sufficiently powerful quantum machines.
Hence, the timing is more important than the headlines.
Meanwhile, Bitcoin has its own battle happening right now
And this is what makes the story even more interesting.
Bitcoin has just gone through a huge recovery from its late-August lows, recently trading around the upper-$70,000s after falling to roughly $60,000. Markets are now watching the Federal Reserve and the U.S. Senate's crypto legislation as major catalysts.
So while traders are staring at the $80K level, developers are staring at something completely different:
2030.
One group is asking:
“Where does Bitcoin go next?”
The other is asking:
“Will Bitcoin still use the same cryptography when quantum computers become powerful enough?”
Both questions matter.
The crypto industry has survived every “Bitcoin is dead” headline
Which is why I am not buying into the quantum doom story.
Crypto has bounced back and forth several times.
Mining changed.
Exchanges changed.
Wallets changed.
The switch from proof-of-work to proof-of-stake on Ethereum.
Now maybe, cryptography itself will have to change.
The interesting part is that this time it's the industry is ahead.
Bitcoin's security is not easily broken by quantum computers right now.
This obviously would be a bad strategy, however, to wait until they were.
The bigger lesson
Perhaps the next big thing in cryptocurrencies is not necessarily the next ‘10x-ing’ coin.
Perhaps it's a matter of creating networks that can withstand technologies that don't exist at scale yet.
AI is transforming the computing landscape.
The technology of quantum computing has the potential to revolutionize cryptography.
Traditional markets are changing with the use of tokenization.
Stablecoins are growing more and more into the financial system.
The perception of crypto as “internet money” is gradually shifting to recognizing the financial system's infrastructure.
Which is where the quantum story comes into play.
The most significant risk to Bitcoin may be the next market crash.
It could well be an as-yet unbuilt computer.
What do you think? Is quantum computing a genuine long-term threat to crypto, or is the industry already preparing early enough?
If you enjoyed this, a tip is always appreciated — it helps me keep researching the stories behind the headlines. ❤️
