Can Satoshi Nakamoto’s Bitcoin Passwords Be Cracked? Is This Why the Market Is Falling? Analysis Company Reveals the Truth

In its assessment of the potential impact of quantum computers on Bitcoin, cryptocurrency asset management company CoinShares stated that the threat is not a “near crisis” but a “manageable risk.”

According to the company, while it is theoretically possible for the Shor algorithm to target Bitcoin’s ECDSA and Schnorr signature schemes, the technological capacity required to realize this risk in practice does not yet exist, and it is predicted that this will take at least ten years.

According to CoinShares’ analysis, the Bitcoin network’s security architecture is based on authorization via elliptic curves and SHA-256-based hash functions. While quantum computers can weaken some cryptographic assumptions, they cannot alter the 21 million BTC supply limit or “bypass” the proof-of-work mechanism. Furthermore, in modern address types like P2PKH and P2SH, public keys remain hidden until the spending occurs, significantly limiting risk. The company argues that claims of “25% of the supply being at risk” exaggerate temporary and mitigable threats.

Related News: Arthur Hayes Sells Altcoins He Previously Held as Major Bulls - Sold Them All

Another key point highlighted in the report was the numerical framework regarding the scale of the risk. It stated that approximately 1.6–1.7 million BTC (about 8% of the total supply) are held in older P2PK addresses with visible public keys, with the majority of these consisting of small balances. According to CoinShares, the amount held in UTXOs that could generate significant selling pressure on the market is only around 10,200 BTC. Breaking the remaining assets individually would be extremely inefficient in terms of cost and time, even in the most optimistic quantum scenarios.

In an assessment of the timeline, it was stated that a quantum computer capable of breaking the secp256k1 curve in less than a year would require 10 to 100 thousand times the current number of logical qubits. Short-term attacks, such as those targeting mempool operations and yielding results in less than 10 minutes, were deemed technically impossible for decades. Long-term, multi-year attack scenarios, while theoretically more realistic within a decade, still involved significant engineering hurdles.

CoinShares also discussed potential solutions. It noted that aggressive interventions, such as soft or hard forks, to transition to quantum-resistant (QR) address formats could provide proactive security, boost investor confidence, and offer protection against unexpected technological breakthroughs. However, it added that such steps carry a risk of errors due to untested cryptography, could inefficiently utilize limited development resources, and could even trigger property rights and network neutrality debates over lost/dormant coins.

*This is not investment advice.

Continue Reading: Can Satoshi Nakamoto’s Bitcoin Passwords Be Cracked? Is This Why the Market Is Falling? Analysis Company Reveals the Truth