Quantum Computing Threatens Bitcoin and Ethereum Security, Mysten Labs Warns

TLDR

• Bitcoin and Ethereum use ECDSA encryption, which quantum computers could break using Shor’s Algorithm by 2030, allowing attackers to reverse-engineer private keys from public blockchain data.
• Mysten Labs warns that quantum algorithms pose serious risks to blockchains, while networks like Solana, Sui, and Near using EdDSA are better positioned to resist quantum threats.
• Upgrading Bitcoin and Ethereum to quantum-resistant algorithms requires hard forks, involving wallet address changes and fund migrations that face high technical and logistical challenges.
• Government agencies like NIST and ENISA recommend phasing out ECDSA and RSA by 2030-2035, but most major crypto networks have not implemented post-quantum cryptography standards.
• Unsecured wallets could become network vulnerabilities, with users potentially losing funds if quantum computing advances before blockchains upgrade their security systems.

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Bitcoin and Ethereum face serious security risks from quantum computing technology, according to recent warnings from Mysten Labs. The two largest blockchain networks rely on encryption methods that quantum computers could potentially break within the next decade.

The vulnerability centers on the Elliptic Curve Digital Signature Algorithm, known as ECDSA. Both Bitcoin and Ethereum use this cryptographic system to secure transactions and protect user wallets. Quantum computers running Shor’s Algorithm could solve the complex math problems that make ECDSA secure, allowing attackers to calculate private keys from public blockchain information.

Kostas Chalkias, co-founder and chief cryptographer at Mysten Labs, says blockchains need to adopt post-quantum cryptography standards soon. Government cybersecurity organizations including NIST and ENISA recommend phasing out ECDSA and RSA encryption by 2030 to 2035. Many major crypto networks have not started implementing these changes.

Some blockchains are better prepared for quantum threats. Networks like Solana, Sui, and Near use EdDSA signature schemes instead of ECDSA. These systems have structural advantages that make upgrading to quantum-resistant algorithms easier.

A Cornell University study examined how AI agents connected to blockchains can be manipulated by attackers. Bad actors can inject fake data or prompts that trigger unauthorized transfers or break protocol rules. This turns AI-driven crypto systems into tools for hackers.

Chalkias warns that quantum computers might crack encryption protecting up to 25% of all Bitcoin. Legacy wallets with exposed public keys face the highest risk. Even users who keep their private keys safe might not be able to prove ownership if quantum attacks compromise their wallet data.

Upgrade Challenges

Fixing Bitcoin and Ethereum requires hard forks, according to Ahmed Banafa, a computer science professor at San Jose State University. Hard forks mean changing the entire network structure, creating new wallet addresses, and moving all funds to quantum-safe systems.

The crypto community has resisted major changes before. When Ethereum rolled back the blockchain after a 2015 hack, part of the community rejected the change and created Ethereum Classic. Similar divisions could happen if Bitcoin or Ethereum try to implement quantum-resistant upgrades.

The scale of the problem is massive. Millions of Bitcoin and Ethereum wallets exist across the world. If users do not upgrade their accounts in time, those wallets become weak points in the network.

Users who lose money because they did not secure their wallets might blame the blockchain itself. This could damage trust in the entire crypto industry.

Only a few blockchains are actively developing post-quantum solutions. Sui, Ethereum, and Algorand are testing quantum-resistant algorithms. Sui has worked on solving backward compatibility issues to protect older accounts that were not designed with quantum threats in mind.

Current State of Preparation

Research shows widespread lack of preparation across major crypto platforms. Most valuable networks still use ECDSA without quantum-resilient upgrades. The crypto industry is prioritizing growth over security upgrades, according to Chalkias.

Partnerships between crypto companies and quantum computing experts remain rare. Few AI companies are working with blockchain developers to create secure frameworks. Collaboration between blockchain developers and quantum researchers is limited.

When Bitcoin launched in 2009, quantum computing was not a major concern. The SHA-256 encryption system seemed secure enough to last for decades. Quantum technology has advanced faster than expected, changing the security landscape.

If Bitcoin had used EdDSA from the start, even Satoshi Nakamoto’s legendary wallets could be quantum-safe today. This remains a theoretical point since changing Bitcoin’s original design is impossible now.

Chalkias says time remains to fix these problems, but action must start now. Every crypto protocol needs to review its encryption methods and plan upgrades before quantum computers become powerful enough to break current systems. Experts warn that breakthroughs in quantum computing could happen faster than predicted, possibly accelerated by AI advances that compress the threat timeline by years.

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