Europol warns quantum computers could break Bitcoin wallets with exposed keys

Future quantum machines might derive the private keys guarding cryptocurrency wallets, according to a Europol report issued Wednesday. For Bitcoin addresses where the public key is already known, the European Union police agency states that no cryptographic solution is available.

Europol dismisses suggestions that quantum computing will bring down crypto. The warning is more specific, targeting individual holders rather than the whole network.

Why Europol Points to Wallets, Not the Blockchain, as the Vulnerability

Each Bitcoin (BTC) wallet relies on two interconnected codes. The public key is visible to everyone, while the private key permits spending.

A sufficiently advanced quantum computer might reverse-engineer the private key from the public key, enabling an attacker to transfer the funds, Europol's cybercrime unit stated.

The hashing algorithm linking Bitcoin's blocks together is significantly more resistant to attack, the report concludes.

For coins whose public keys are exposed, the report suggests a single remedy.

"Once a public key is exposed, it remains permanently vulnerable to future quantum decryption."

Holders need to transfer those funds to fresh wallets before any potential attack, Europol advises.

Bitcoin Exposure Levels and the Estimated Time for a Rescue

Research firm Glassnode estimated 6.04 million BTC in May, accounting for 30.2% of all mined coins. At Bitcoin's current price around $83,050, that total is about $502 billion.

The majority is exposed through reused wallet addresses and exchange wallets, Glassnode found. The remaining portion lies in older script formats, including Satoshi Nakamoto's early coins.

Whether a holder's coins fall into that category depends on the storage method, according to Glassnode.

Most regular Bitcoin addresses only display a hashed version of the public key, concealing the key itself. Those coins are not considered exposed.

That situation changes when the owner makes a payment from the address. The transaction discloses the key, and any coins remaining at that address lose their privacy, Glassnode said.

Exchange-held coins often fall into the exposed group because platforms commonly reuse addresses. Taproot addresses, introduced in 2021, and Bitcoin's earliest addresses reveal the key by default.

Quantum-resistant signatures are 10 to 120 times larger than current ones, Europol notes, potentially clogging blocks and increasing fees.

A study referenced in the report estimates a complete migration would require at least 76 days of the network's full capacity. Using only a quarter of each block extends that to roughly 300 days.

A separate Europol report cautions that attackers might store encrypted data now and decode it once quantum machines are available. It found no clear evidence of this happening at scale.

Europol did not specify a timeline for such machines. It argues that upgrades on a decentralized network take years, and some developers already support plans to freeze vulnerable coins.