Google’s quantum breakthrough does not pose a threat to Bitcoin, but only for the time being

Google’s recent announcement of a Willow quantum chip with 105 qubits of processing power has sparked debate over the threat of quantum technology to Bitcoin’s cryptographic algorithms, such as the Elliptic Curve Digital Signature Algorithm (ECDSA) and Secure Hash Algorithm (SHA-256). However, experts note that it would take several million qubits to actually crack Bitcoin’s cryptographic security, and such a threat remains very remote.

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ECDSA, a digital signature verification algorithm using elliptic curve cryptography, provides the creation and verification of digital signatures that confirm the authenticity of transactions and the owner’s right to control funds. SHA-256, a cryptographic hashing algorithm, plays a key role in ensuring the integrity of blockchain data and forms the basis of the proof-of-work mechanism, allowing the network to reliably protect transactions and confirm new blocks. These technologies are the foundation of Bitcoin’s cryptographic protection, but with the development of quantum computing, their stability may be seriously tested.

Bernstein analysts emphasize that despite the rapid development of quantum technologies, a practical threat to Bitcoin’s cryptographic standards remains very remote, since current quantum computers do not have enough power for such attacks. However, the Bitcoin community is already actively discussing the transition to quantum-resistant cryptographic algorithms that can replace existing standards.

The transition to quantum-resistant cryptography is fraught with serious technical challenges. As noted by the developer and creator of the Bitcoin STAMPS protocol, known under the pseudonym Mike In Space, quantum-resistant digital signatures are significantly larger in size, which will require an increase in the block size and, accordingly, changes in the network architecture. Such a modification may require a hard fork, which, in the event of disagreements within the community, can lead to a split in the network. An alternative solution would be a soft fork, but this would require a lengthy and costly process to transfer user funds to the new system, which could take years under current block size restrictions.

Charles Edwards, founder of Capriole Investments, warns that the threat of quantum computing could become a reality within the next five to 10 years. He estimates that a quantum computer with 2,500 logical qubits would be capable of compromising the security of the SHA-256 algorithm, which plays an important role in protecting the Bitcoin blockchain. Edwards emphasizes the need for immediate action, since agreeing on quantum-resistant cryptographic standards and implementing them could take years. Delays in implementing these measures can significantly reduce the time available to protect the network from new threats.

The development of quantum computing poses a threat not only to cryptocurrencies, but also to a wide range of modern technologies. Bank accounts, secure data storage systems, communication protocols and other solutions that depend on cryptographic standards such as RSA, ECDSA and AES are at risk. This problem is global in nature, requiring coordinated efforts by developers, scientists and regulators to create and implement quantum-resistant algorithms that will help minimize the risks caused by the rapid technological revolution.

Bernstein analysts noted that the decline in Bitcoin price after breaking through the $100,000 mark was caused by market factors, including excessive use of leverage, which led to increased volatility. However, experts remain optimistic, recommending investors to “stay long.” They emphasize that the $95,000-98,000 level remains attractive for long-term investments, especially against the backdrop of strong demand for ETFs and activity from corporate investors. They predict that the price of Bitcoin could reach $200,000 within the next 12 months, making current levels attractive to strategic investors.