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Ahmed Barakat
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Coinbase, which safeguards 5% of all Bitcoin for clients including banks, asset managers, and hedge funds, wants the network to begin preparing for quantum security. The threat is prospective, but the harder question is whether Bitcoin can coordinate a gradual technical migration before that changes.
Bitcoin transactions rely on digital signatures to demonstrate that a spender controls the relevant funds. The network uses ECDSA and Schnorr signature schemes, which remain secure against the computing systems available today.
A sufficiently capable quantum computer could change that by deriving a private key from an exposed public key, potentially allowing an attacker to spend vulnerable coins.
A machine able to break cryptographic systems in this way is commonly described as a cryptographically relevant quantum computer, or CRQC. The source report cites Google researchers’ projection that such a machine could exist by 2029.
The migration challenge is structural. Bitcoin’s decentralized design means consensus changes require broad coordination, while wallets, custodians, and other services also need time to implement and test new security. Coinbase’s argument is that work should begin well before any CRQC announcement, rather than waiting for an emergency to set the schedule.
The timing matters: quantum computing is not currently shown to be breaking Bitcoin’s signatures, but the transition itself could take years. Starting preparation now would create room to evaluate designs and upgrade infrastructure; it would not mean that users face an immediate, confirmed quantum attack.
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Coinbase Bitcoin Quantum Priorities Leave the Design Open
Coinbase wants transaction outputs, the structures that define how funds can be spent-to support new post-quantum cryptography without requiring Bitcoin to rebuild its transaction system each time signature methods change.
Flexible outputs could allow quantum-resistant signatures to be added, replaced, or combined as the technology and security assessment evolve. The exchange points to P2MR, associated with BIP-360, and P2TRv2 as examples under consideration.
It also favors staged protection over a forced switch in a single step. One possible hybrid arrangement would let the same funds be spent using either a traditional ECDSA or Schnorr key, or a post-quantum key.
This could let users move to stronger protection ahead of a full transition, although Coinbase’s recommendation does not settle the design or the rules for eventually retiring older signature methods.
Signature schemes that require wallets to track state need particular scrutiny. If a wallet loses or mishandles records of previously used signing keys, reuse could create a path to forged signatures. Coinbase therefore wants stateless alternatives available alongside stateful designs, so wallet operators are not left with only schemes that depend on flawless record-keeping.
Implementation quality is another requirement, not a secondary engineering detail. Coinbase calls for consistent verification across platforms, protection against timing leaks, clear settings, and resilience if the random-number generator used in signing fails.
Those controls aim to reduce the chance that an ostensibly quantum-resistant upgrade introduces exploitable software or wallet weaknesses; broader wallet security risks underline why implementation matters alongside cryptographic design.
Institutional adoption adds another constraint. Coinbase says post quantum Bitcoin schemes should work with multiparty computation (MPC), which allows organizations to distribute key operations rather than depend on one person or device. A design that works only for individual wallets could leave exchanges, custodians, and large businesses with a slower or less practical migration path.
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How About Dormant and Lost Bitcoin?
A later restriction or retirement of ECDSA and Schnorr spending could leave some funds in older formats. Some dormant wallets may belong to owners who have lost their keys, while certain older address types have exposed public keys. Coinbase warns that a covert attacker with a CRQC could target vulnerable coins before the capability becomes public.
Coinbase does not endorse a particular treatment for dormant, quantum exposed, or lost Bitcoin. It argues that the question should be debated separately so disagreement over those funds does not delay technical protections for users who can migrate; any rescue mechanism would also need to be quantum-safe.
The immediate development task, then, is not to declare one output type or signature scheme the winner. It is to assess flexible designs, implementation risks, and institutional compatibility while keeping the politically difficult legacy-coin debate from becoming a prerequisite for starting the broader upgrade work.
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