There is always something to worry about in the crypto sector. Whether it's a failing crypto exchange or changes in regulation, the crypto market has performed strongly over the past year, despite the recent bearish sentiments.
Yet, some see a new challenge on the horizon: quantum computing.
Is quantum computing the end for crypto?
Quantum computing technology can be thousands of times faster than ordinary computers. Some early quantum tests have already solved problems that would take a traditional computer thousands of years.
On paper, this sounds bad for cryptocurrencies. In theory, a quantum computer could break SHA256, the protocol that protects the Bitcoin network.
In the news, quantum computers and Bitcoin are often portrayed as adversaries on a collision course, but a nuanced view shows that these technologies can also enhance each other in terms of digital security and computing power.
As early crypto investor and enthusiast Charlie Shrem said back in December during Moneyshow:
"Quantum computing and crypto are complementary technologies."
In short, quantum computing does not have to be a threat to crypto. It can actually accelerate the development of Bitcoin into a stronger, safer, and scalable system.
The opportunity for crypto as quantum evolves
The open-source nature of Bitcoin fosters collaboration among cryptographers, developers, and academics, allowing for well-tested and implemented solutions.
The challenge posed by quantum computing is not only destructive but is actually a reason to strengthen Bitcoin's cryptographic foundation.
The crypto community is actively developing quantum-resistant signatures, such as Lamport signatures. These can be implemented via soft forks, just like the successful Taproot upgrade in 2021.
This evolutionary approach demonstrates that quantum computing actually drives innovation instead of making crypto obsolete. New technologies continue to evolve and grow, which is positive for Bitcoin.
The transition to post-quantum cryptography is more than just defense.
"Quantum computing uses fundamental principles of nature and will likely support Bitcoin rather than oppose it," says Shrem.
The recent standardization by the U.S. National Institute of Standards and Technology of quantum-resistant cryptographic algorithms is thus an important milestone.
Algorithms like CRYSTALS-Kyber provide new security frameworks that benefit the entire digital ecosystem.
Cryptocurrencies like Bitcoin can adopt this progress and evolve from quantum-sensitive to truly quantum-proof, setting a new standard for digital security.
Meanwhile, researchers have built and tested a blockchain that can only be mined with quantum computers. This is the first real application of quantum supremacy in blockchain technology.
This prototype, tested on four quantum processors at different locations, introduces 'proof of quantum work' as an alternative to traditional proof-of-work systems.
The quantum solution for blockchain
Unlike the energy-intensive mining of Bitcoin, which reached 176 terawatt-hours in 2024, quantum blockchains achieve greater mining efficiency through quantum mechanics.
Quantum computing can solve blockchain problems by making transaction processing much faster.
Thus, the consensus mechanisms of Bitcoin are secure but sometimes slow and labor-intensive. Quantum computers can optimize these processes, approve transactions faster, and address scalability issues that blockchains have long faced.
This computing power could soon enable Bitcoin to process thousands of transactions per second without sacrificing decentralization.
Quantum-powered blockchains use quantum key distribution and quantum random number generators, further increasing security and preventing data breaches and unauthorized access.
In other words: instead of replacing the security of Bitcoin, quantum technologies can actually enhance it.
Quantum key distribution theoretically offers unbreakable encryption to secure Bitcoin wallets and transactions. Quantum random number generators provide truly random private keys.
The combination of these technologies enables hybrid systems. For example, quantum tokens could provide an additional privacy layer within a specialized blockchain application.
This complementary approach ensures that Bitcoin can harness quantum advantages while maintaining its proven, decentralized structure.
The quantum challenge has brought the crypto community together like never before.
Blockchain analysis companies are already preparing for quantum-resistant address formats and transactions, ensuring compliance and quantum security checks.
This collaboration goes beyond just cryptocurrencies. Crypto exchanges, wallet providers, research institutions, and regulators are working together to ensure the entire ecosystem transitions securely.
The blockchain sector is proactively addressing quantum threats with quantum-resistant tokens and post-quantum cryptography. Various projects are at the forefront with lattice-based cryptography and hash-based methods.
This competitive innovation is good for crypto as a whole. Successful quantum-resistant implementations in other projects help successful crypto projects to develop. The shared challenge ensures that everyone benefits.
"We have barely begun to explore all the possibilities," Shrem notes. "Quantum computing is transforming into an entirely new kind of computer and we need to think carefully about what that really means."
Quantums way forward for crypto
The relationship between quantum computing and cryptocurrency does not have to be adversarial.
According to estimates, there is still a period of 5 to 15 years before quantum computers pose real threats to current crypto standards. Thus, there is plenty of time to prepare.
Quantum blockchains could offer new opportunities for sectors that require strong security and significant computing power. Consider secure voting systems, supply chain management, and sharing medical data.
The decentralized governance and adaptability of Bitcoin make it suitable for harnessing quantum advantages.
As quantum computing develops further, all cryptocurrencies could implement quantum-resistant cryptography, make mining more efficient with quantum technology, and introduce quantum security protocols.
This creates a crypto ecosystem that is safer, more efficient, and better scalable than ever – not in spite of quantum computing, but precisely because of this technology.
This collaboration does not mean the end of Bitcoin but rather the beginning of a future powered by quantum technology.