Blockchain's Quantum Test

Ever since we started talking about quantum computers, or rather, since the topic became serious, there’s been concern in the blockchain/Web3 world about their potential impact. I thought it might be worth touching on this topic a bit this week.

The security of blockchain is based on a pretty simple idea: it’s a math problem that’s extremely hard to solve.

In the world of Bitcoin, or blockchain in general, wallets have two keys: one is a public key that everyone can see, and the other is a private key that only the owner has. We can actually think of these public and private keys as the foundation not just of blockchain, but of the entire cryptography world.

You can think of a public key like a mailbox address: anyone can send money there. But to open the box and spend the money, you need the private key. And finding the private key from the public one is, for current computers, practically impossible, a math problem that would take billions of years to solve.

Blockchain’s promise of security through cryptography and encryption comes exactly from this.

But quantum computers change, or could change, this equation. Unlike classical computers, quantum computers can solve certain math problems much faster. In 1994, mathematician Peter Shor showed that a quantum computer could theoretically break elliptic curve cryptography, the math problem Bitcoin relies on. Back then, it was purely theoretical; such a computer didn’t exist. It still doesn’t today. But that door is slowly opening.

In March 2026, Google published a whitepaper revealing a critical finding: the quantum computing power needed to break Bitcoin’s encryption is much lower than previously thought. So the question shifted from “can quantum computers do this?” to “when will they be able to?” The difference between these questions might seem small, but it’s not, because it means there’s less time to prepare than we thought.

So where exactly is the threat? The blockchain ledger and mining system aren’t affected by this risk. The real issue is with wallets.

When you make a transaction from a wallet, your public key gets written to the chain, and because of blockchain’s inherent transparency, everyone can see this key. Once quantum power becomes sufficient, theoretically, it could be possible to derive the private key from the public one. So, the moment an account is used and leaves a trace on the blockchain, the wallet could become vulnerable. Beyond that, some old address formats already have their public keys constantly visible.

A report from Coinbase in June 2026 laid out this risk in numbers: about 7 million BTC have their public keys visible on the chain. Of these, 1.7 million are in a very old address format, and the speculative part is that a large portion is thought to belong to Satoshi or are lost wallets.

There are solutions, thankfully, and that’s the good news. In August 2024, NIST released three quantum-resistant encryption standards after eight years of work. Tested, practical solutions. Beyond NIST, which is a US-based institution, ETSI in Europe and the international organization ISO/IEC are also working on this. For centralized structures, the transition is relatively straightforward: expert teams provide recommendations, and the board makes and implements decisions. Banks and governments can do this.

But the same isn’t true for decentralized networks. You can refer back to the articles from the first season of this newsletter, but most decentralized setups use community-based governance systems similar to DAOs. This can be thought of as voting systems where those who hold assets in the network have participation rights.

Ethereum seems relatively coordinated on this; a “post-quantum” team has been formed within the Ethereum Foundation. Ripple has set a target date of 2028. There’s the BIP-361 proposal for Bitcoin, but considering Bitcoin’s conservative nature and the broad consensus required for decision-making, it’s said this transition could take 5-10 years. Jameson Lopp, co-author of BIP-361, also estimates this timeline.

What amounts to a “system update” for a bank could mean years of community coordination for a decentralized network.

On the other hand, the wallets and bitcoins thought to belong to Satoshi are the strangest part of this discussion, because they’re in trouble in both scenarios.

If quantum becomes powerful enough and the Bitcoin network isn’t ready, those 1.7 million BTC could be stolen, since the public key is already visible and a quantum computer could solve the math problem to reach the private key. This would suddenly change the total supply of Bitcoin in the market, potentially causing chaos. The other scenario is that the Bitcoin network successfully makes the “post-quantum” transition and sets a date to switch to the new, upgraded network. In this case, bitcoins in wallets thought to belong to Satoshi that haven’t moved in years would either be burned or frozen. The Coinbase advisory board defines this dilemma very clearly: it’s not a technical problem, but a social one. Does the right to property come first, or does network security? In this scenario, it’s not possible to protect both at the same time, or let’s say it’s a bit of a muddle.

All these scenarios, the proposals for network upgrades, the work to be done, and the budgets required, which need to be voted on, approved, and acted upon by wallets with voting rights in the network, bring these questions to my mind:

The crypto ecosystem has long advocated a value system based on decentralization. But if faced with such a potential threat, does it have to make a coordinated, almost centralized decision to survive? Can that system still maintain its decentralization? Or can decentralization, which brings many advantages, sometimes turn into a disadvantage?

This question isn’t technical at all; it’s entirely philosophical. And the answer will start to become clear in the next few years.