Wall Street broker Bernstein said the rise of quantum computing poses a credible but manageable threat to Bitcoin and the broader crypto ecosystem, with recent advances reducing the timelines for possible attacks on modern cryptography.
Advances such as Google Quantum AI’s reported reduction in qubit requirements suggest that risk is no longer a distant concern, spanning a decade, the broker noted. Still, the company cautioned that scaling quantum systems to the level necessary to break widely used encryption algorithms remains a complex, multi-step challenge.
“Quantum should be seen as a medium-to-long-term system upgrade cycle rather than a risk,” analysts led by Gautam Chhugani said in Wednesday’s report.
Quantum computing uses the principles of quantum mechanics rather than classical physics. Instead of binary bits, it relies on qubits that can exist in multiple states simultaneously, a property known as superposition, allowing many possibilities to be processed at the same time.
Combined with entanglement, this allows quantum systems to solve certain problems, such as decryption, much more efficiently than classical computers.
Quantum computers could ultimately weaken cryptographic systems such as elliptic curve encryption, which underpin crypto wallets, by solving problems beyond the reach of classical machines. However, the report states that the threat spans multiple sectors, from finance to defense, and should be viewed as a manageable long-term risk rather than an existential threat to Bitcoin.
Exposure is focused on approximately 1.7 million BTC held in legacy wallets, while newer practices and protocols reduce vulnerability. Bitcoin mining, which relies on SHA-based hashing, remains effectively secure even in advanced quantum scenarios, the broker said.
Bernstein expects the crypto industry to have ample time, around three to five years, to transition to post-quantum cryptography, with improvements such as new wallet standards, reduced address reuse, and key rotation already under consideration.
A recent academic paper indicated that attacking the Bitcoin blockchain via quantum mining would require the energy output of a star.
Read more: Attacking bitcoin mining with a quantum computer would require the energy of a star, academics say
