Quantum computers could break crypto wallet encryption with just 10,000 qubits, researchers say

New research indicates that quantum computers could break the encryption securing Bitcoin and Ethereum blockchains with significantly fewer qubits than previously estimated, accelerating the urgency for the industry to adopt post-quantum cryptography. A paper by Caltech and quantum startup Oratomic suggests a system with approximately 26,000 qubits could break ECC-256, the encryption standard for these blockchains, in about 10 days. This finding dramatically reduces prior estimates, which often ran into the hundreds of thousands of qubits.

Reduced Qubit Requirements for Cryptographic Attacks

The study highlights that the cryptography protecting Bitcoin (BTC) and Ether (ETH) wallets could potentially be compromised using as few as 10,000 physical qubits. This is a substantial decrease from earlier projections. Qubits, the fundamental units of quantum computers, measure the scale of a system, analogous to cores or transistors in traditional chips. The Oratomic team utilized Google's quantum circuits designed for breaking 256-bit elliptic curve cryptography, demonstrating that a neutral-atom setup could achieve this with a fraction of the qubits previously thought necessary.

Accelerating Quantum Threat Timeline

These findings, published on the arXiv preprint server, align with a concurrent Google Quantum AI whitepaper. Together, they represent a significant compression of the estimated timeline for quantum threats. The number of physical qubits required to run Shor's algorithm, a method for breaking public-key encryption, has fallen by five orders of magnitude over the past two decades, from an estimated 1 billion in 2012 to around 10,000 today. This rapid reduction implies a more immediate need for quantum-resistant solutions.

Implications for Blockchain Security and RSA Encryption

Under the assumptions of the new research, a 26,000-qubit system could break ECC-256 in approximately 10 days, potentially allowing a quantum computer to derive private keys and seize funds. While RSA-2048, used in traditional financial institutions, would require a larger system of around 102,000 qubits and three months to break, elliptic curve cryptography is considered more vulnerable due to its smaller key sizes. The research suggests that while rapid "on-spend" attacks might be unlikely under these assumptions, the longer-term risk to funds in vulnerable or reused addresses remains significant, with an estimated 6.9 million BTC potentially affected.

Context and Caveats

It is important to note that all nine authors of the Oratomic paper are shareholders in the company, with six employed by Oratomic. This positions the paper as both a scientific contribution and a potential showcase for their hardware approach. Nevertheless, the trend of decreasing qubit requirements for quantum attacks is becoming increasingly difficult to ignore, shifting the focus from 'if' quantum systems can break current encryption to 'when' and how quickly the industry can transition to quantum-resistant alternatives before the cost of such systems becomes prohibitive.