A looming threat to bitcoin: The risk of a quantum hack
Subscribe to enjoy similar stories. Bitcoin’s rally faces a risk that isn’t on the radar of most crypto investors: quantum computing. The nascent technology, which drew attention this month after Google claimed a breakthrough with its new Willow quantum-computing chip, could one day enable hackers to break the encryption that keeps bitcoin secure.
Such a hack could torpedo bitcoin’s price, by allowing thieves to swipe coins out of supposedly secure digital wallets. Researchers say a quantum device powerful enough to crack bitcoin is likely a decade or more away. Still, advances in the technology pose a long-term risk, unless bitcoin’s fractious community of developers beef up its technology in a time-consuming upgrade.
A quantum-powered attack on bitcoin could have harmful spillover effects on traditional financial markets, analysts warn. “What you’ve got here is a time bomb waiting to explode, if and when someone gets that ability to develop quantum-computer hacking and decides to use that to target cryptocurrencies," said Arthur Herman, senior fellow at the Hudson Institute, a think tank based in Washington, D.C. A 2022 Hudson Institute study estimated that a quantum hack of bitcoin would cause more than $3 trillion in losses across crypto and other markets and trigger a deep recession.
Herman said the likely costs of a quantum hack have swelled since the study came out, as bitcoin has climbed to near $100,000 and grown into an increasingly mainstream investment asset. President-elect Donald Trump has pledged to create a strategic reserve for the government’s bitcoin holdings, a sort of digital Fort Knox. Quantum computing could allow thieves to raid that Fort Knox.
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