Quantum Threat to Bitcoin: $700B at Risk

The Human Rights Foundation’s detailed analysis reveals that approximately 6.5 million Bitcoin, representing nearly one-third of all BTC in circulation, are currently vulnerable to quantum attacks. This staggering figure translates to roughly $700 billion in value at current market prices, creating what Coin Metrics cofounder Nic Carter describes as “the biggest risk to Bitcoin.” The vulnerability primarily affects what researchers term “long-range attacks” targeting dormant and reused addresses where public keys have been exposed.

Of the vulnerable coins, the HRF report identifies that owners could theoretically secure 4.49 million BTC by migrating their balances to quantum-resistant addresses. However, this leaves 1.7 million Bitcoin permanently at risk, including the legendary 1.1 million BTC attributed to Satoshi Nakamoto. These frozen assets represent a ticking time bomb for the Bitcoin ecosystem, as they cannot be moved to safer addresses and remain exposed to quantum thieves when the technology becomes capable of breaking current cryptographic protections.

Beyond the financial implications, the HRF report emphasizes Bitcoin’s critical role as a financial lifeline for activists, journalists, and dissidents facing repression in authoritarian regimes. The very features that make Bitcoin valuable—decentralization, privacy, and permissionless access—depend entirely on robust cryptography that quantum computing threatens to shatter. As Jameson Lopp, Bitcoin security expert and Casa cofounder, warns, the biggest threat may not be the technology itself but apathy toward continuous improvement.

The quantum threat manifests through two primary attack vectors. Long-range attacks target dormant and reused addresses by exploiting exposed public keys, while short-range attacks exploit the transaction confirmation window, potentially allowing attackers to swipe funds before transactions are confirmed if they can calculate private keys in real time. This dual vulnerability means both inactive holdings and active transactions could be compromised when quantum computers reach sufficient capability.

Transitioning to quantum-proof algorithms presents monumental technical challenges. The HRF highlights two classes of potential solutions: lattice-based and hash-based signature schemes. However, both come with significant trade-offs. Lattice-based signatures are approximately ten times larger than current Bitcoin signatures, while the most compact hash-based alternatives are 38 times larger. This dramatic increase in transaction size would exacerbate Bitcoin’s existing scaling problems, reducing transactions per block and increasing storage requirements for full nodes.

The implementation of quantum-resistant protocols would require comprehensive ecosystem coordination, including wallet redesigns, hardware updates, node operator retraining, and global user education. Every technical fix must navigate Bitcoin’s decentralized governance structure, where even friendly upgrades historically take years to achieve consensus. The community faces the additional challenge of coordinating across developers, wallet builders, advocacy groups, and millions of holders—many unaware their coins are vulnerable.

Bitcoin’s decentralized upgrade process, while fundamental to its censorship-resistant nature, becomes a liability when rapid security responses are needed. The “burn or steal” debate is heating up within the community: should developers attempt to burn quantum-vulnerable coins, freeze them, or allow quantum thieves to drain lost wallets? This philosophical divide tests Bitcoin’s core principles of property rights and anti-governance, with no clear consensus emerging.

As the HRF report concludes, upgrading Bitcoin to withstand quantum threats is as much a human challenge as a cryptographic one. Any successful soft fork integrating quantum-resistant signature schemes will require thoughtful user interface design and coordination across a global ecosystem that includes users, developers, hardware manufacturers, node operators, and civil society. The fate of forgotten Bitcoins—and perhaps the ecosystem’s long-term legitimacy—hangs on how the network navigates these political, technical, and social battles in the coming decade.