There is always something that causes the cryptocurrency community to worry. Whether it is an exchange facing issues or regulatory changes, the crypto sector has continued to thrive over the past year, despite recent bearish sentiment.
However, a new concern is emerging: quantum computers.
Are quantum computers the apocalypse for crypto?
Quantum computing technology operates thousands of times faster than traditional computers. Some early experiments have shown that quantum computers have solved computations that traditional computers would take thousands of years to complete.
Theoretically, this seems disadvantageous for cryptocurrencies. Specifically, a quantum computer could break the SHA256 protocol – the protocol that currently protects Bitcoin's ledger.
Many headlines often suggest that quantum computers and Bitcoin are two opponents in an unavoidable battle. However, upon closer examination, these two technologies can indeed complement each other to enhance digital security and improve computational efficiency.
In fact, as veteran cryptocurrency investor Charlie Shrem shared at the Moneyshow event earlier this December:
"Quantum computers and crypto are two complementary technologies."
In summary, quantum computers are not the end of cryptocurrencies, but could even propel Bitcoin to develop into a more robust, secure, and scalable system.
Opportunities for crypto as quantum technology develops
The fact that Bitcoin is an open-source project has facilitated collaboration among cryptographers, programmers, and academics to rigorously test and develop new solutions.
Rather than merely posing a threat, the emergence of quantum computers is a driving force to strengthen the cryptographic foundation of Bitcoin.
The cryptocurrency community is researching the development of quantum-resistant signatures, such as Lamport signatures. It is expected that this solution will be updated through minor upgrades similar to the very successful Taproot update in 2021.
This innovative approach shows that quantum computers do not make current technology obsolete, but actually drive innovation. The more technology advances, the more opportunities Bitcoin has to break through.
Transitioning to post-quantum cryptography is not only a defensive strategy.
"Quantum computers leverage the foundation of natural principles, and thus can support Bitcoin instead of opposing it," according to Shrem.
The recent standardization of quantum-resistant cryptographic algorithms by the National Institute of Standards and Technology (NIST) marks an important milestone for the entire industry.
Because algorithms like CRYSTALS-Kyber will create a new security framework for the entire digital ecosystem.
Cryptocurrencies from Bitcoin onwards can adopt these improvements, thus no longer being easy targets for quantum computers but becoming absolutely secure, raising the security standards of digital assets.
Additionally, researchers have built and tested blockchains that can only be mined by quantum computers. This is the first practical application demonstrating quantum advantages in blockchain technology.
This experimental model has been tested on four quantum processors located in different geographical locations, introducing the concept of "quantum proof of work" to gradually replace the traditional proof-of-work system.
Quantum solutions for blockchain
Unlike Bitcoin mining, which consumes a lot of electricity (176 terawatt-hours in 2024), quantum blockchain systems will help mine more efficiently due to quantum mechanisms.
Quantum computers can help solve some blockchain problems with their superior transaction processing capabilities.
For example, while Bitcoin's consensus mechanisms are quite secure, they are slow and resource-intensive. Quantum computers can optimize consensus algorithms, confirming transactions faster while addressing scaling issues that blockchains still face.
Thanks to this computational power, Bitcoin can process thousands of transactions per second while maintaining its inherent decentralization.
Quantum technology-based blockchain systems also use quantum key distribution and quantum random number generation to enhance security, preventing data leaks and unauthorized access.
In other words, instead of replacing Bitcoin's current security, quantum technology will help upgrade it significantly.
Quantum key distribution can encrypt wallets and Bitcoin transactions with theoretically unbreakable security, while quantum random number generators will ensure the creation of truly unpredictable private keys.
The combination of these technologies also opens up opportunities for hybrid systems, such as using quantum tokens to add an extra layer of privacy security in a specialized blockchain application.
With this complementary approach, Bitcoin can leverage quantum advantages while maintaining a decentralized architecture that has stood the test of time.
The challenge posed by quantum computers has united the cryptocurrency community in unprecedented ways.
Blockchain analysis companies are preparing to support address formats as well as quantum-resistant transaction types to ensure compliance and continuous quantum security monitoring.
This collaboration is not limited to the cryptocurrency community but also includes exchanges, wallets, research institutes, regulatory agencies, all working together to help the ecosystem transition safely and smoothly.
The blockchain industry is proactively facing threats from quantum technology by developing quantum-resistant tokens and post-quantum encryption technology, with leading projects employing grid-based and hash-based encryption methods.
This competitive innovation benefits the entire crypto market. Because successful quantum-resistant applications in other projects will also help leading crypto projects to develop more robustly. This common challenge is like a rising tide lifting all boats.
"We have not yet fully explored the potential," Shrem shared. "Quantum computers are bringing a completely new kind of computing, and we need to seriously think about its true implications."
The next direction for Quantum in the crypto market
The relationship between quantum computers and cryptocurrencies does not have to be adversarial.
According to predictions, it will take another 5 to 15 years before quantum computers can directly impact current crypto standards, indicating that we still have ample time to prepare.
Quantum blockchain can open up many applications in fields requiring high levels of security and processing power, such as secure voting systems, supply chain management, or sharing health data.
The decentralized governance mechanism and adaptability of Bitcoin enable this coin to take full advantage of the benefits offered by quantum technology.
As quantum computers develop further, all types of cryptocurrencies may integrate quantum-resistant encryption solutions, effectively utilizing mining thanks to quantum technology and applying new security protocols.
As a result, the cryptocurrency ecosystem will become increasingly secure, efficient, and scalable like never before—not by avoiding quantum computers, but by harnessing their power.
This mutually supportive relationship is not the end for Bitcoin, but the beginning of a new future with quantum power.
