Quantum Computing Threat Could Affect 35% of Bitcoin Supply by 2028

The Quantum Countdown Begins

Fundstrat cofounder Tom Lee recently raised significant alarms about quantum computing’s emerging threat to Bitcoin’s long-term security. According to Google research that Lee cited, quantum computers could potentially render Bitcoin’s existing cryptographic protections obsolete as early as 2028–2029. This accelerating timeline has sparked considerable concern throughout the cryptocurrency community, prompting urgent discussions about defensive measures and protocol upgrades. Notably, Lee also observed that both the Ethereum and Solana ecosystems appear significantly better positioned to withstand quantum computing threats—a distinction that underscores the challenges facing Bitcoin’s aging infrastructure.

The Real Vulnerability: A Technical Correction

Adam Back, the creator of Hashcash and a prominent Bitcoin cypherpunk, quickly offered an important technical clarification regarding Lee’s characterization of the threat. Bitcoin does not rely on encryption to process transactions—a widespread misconception that can obscure the actual vulnerability. Instead, the network depends on digital signatures, specifically ECDSA technology, to verify asset ownership. Seed phrases are secured through astronomical levels of entropy that quantum computers cannot easily brute-force using conventional means. The actual quantum threat operates through a different mechanism and affects only a specific portion of the network. According to cryptographic research, a sufficiently advanced quantum computer could theoretically employ Shor’s algorithm to derive private keys from public keys that have already been exposed on the blockchain. This vulnerability specifically targets only 30–35% of Bitcoin’s total supply—approximately 7 million BTC—comprising coins sitting dormant on legacy addresses or wallets where public keys have been publicly reused. This at-risk segment includes lost wallets and approximately one million Bitcoin attributed to the network’s early creator, Satoshi Nakamoto.

The Governance Dilemma Ahead

Currently, cryptographically relevant quantum computers capable of executing such attacks do not exist, meaning the threat remains purely theoretical. Bitcoin developers have actively researched and tested post-quantum signature algorithms for years and expect to implement network upgrades well before quantum threats become imminent. The network could technically transition to new cryptographic systems through a hard fork without encountering insurmountable technical obstacles. However, a substantial practical challenge persists: owners of those 7 million “legacy” coins are unlikely to voluntarily migrate their assets to quantum-safe addresses. This reality leaves the Bitcoin community confronting an uncomfortable choice. The network could either freeze approximately one-third of all existing Bitcoin through the controversial BIP-361 proposal—a path fraught with governance challenges—or allow those coins to remain exposed to potential quantum-enabled theft. This dilemma illustrates why blockchain networks designed with post-quantum cryptography from inception possess structural advantages over legacy systems attempting retroactive security patches.

Source: Google, via U.Today. Not financial advice.