EU Regulators Sound Alarm on Quantum Computing Threat to Bitcoin

European regulators have issued a warning about the potential threat of quantum computing to Bitcoin's security. The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority stated that advances in quantum computing could weaken cryptography used to secure blockchains.

The supervisors warned that financial firms and supervisors should prepare for emerging technology risks, including the possibility that quantum computers could derive private keys from public keys. Ki Young Ju, founder of CryptoQuant, estimates that 6.89 million BTC could be exposed if quantum machines gain this ability.

The European Commission's roadmap calls for EU member states to start moving to post-quantum cryptography by the end of 2026 and to protect high-risk uses by the end of 2030. However, there has been no reported quantum attack that derived a Bitcoin private key from its public key.

Bitcoin uses public keys to verify transactions, and if a sufficiently capable quantum computer were to use an exposed public key to calculate its private key, an attacker could then authorize a transaction from the affected coins. Ju's estimate of 6.89 million BTC includes 1.91 million BTC in older P2PK outputs that show public keys on the blockchain.

Developers would need to prepare and review an upgrade to protect exposed Bitcoin, which could place new demands on the network's transaction capacity. Post-quantum signatures can be larger than the signatures Bitcoin uses today, and developers would need to weigh their size and performance as they assess possible designs.