Two independent publications were released today sharing the same key message: the Bitcoin ecosystem is taking the quantum threat seriously, and that the window for leisurely preparation is quickly closing.
Earlier today, BTQ Technologies announced the first working implementation of Bitcoin Improvement Proposal 360 on a live testnet.
At the same time, Galaxy Digital just published a comprehensive research note discussing the full scope of quantum risk and mitigation pathways.
In an X post accompanying the Galaxy paper, “head of firm-wide research” Alex Thorn captured the mood succinctly: “Quantum computing may threaten classical cryptography, including the crypto that powers Bitcoin transactions. If there’s even a chance that’s true, the Bitcoin community should work to prepare and mitigate. The good news is that Bitcoin devs are indeed working on it.”
BTQ turns BIP 360 from proposal to live code
To understand what BTQ Technologies built, it is important to understand the problem it solves. Bitcoin’s 2021 Taproot upgrade was a major leap forward for the industry, powering Lightning Network payments, BitVM’s smart contracts, and Ark, making it one of the key pillars supporting Bitcoin’s next generation of applications.
However, Taproot had a flaw that created a long-term issue: as tokens were spent, the public keys associated with wallets could be exposed on-chain.
As such, if a powerful enough quantum computer were ever developed, it could use an exposed public key to work backwards and derive the private key tied to the wallets, essentially allowing a malicious actor to figure out someone’s password from their username alone and steal their assets.
Bitcoin Improvement Proposal 360 (BIP 360) is the proposed solution to this problem. It introduces a new output type called Pay-to-Merkle-Root (P2MR) that keeps all of Taproot’s capabilities running while eliminating the flaws that expose public keys to quantum risk.
The proposal was merged into Bitcoin’s official BIP repository earlier this year and so far has attracted “more developer commentary than any other BIP in Bitcoin history,” according to the co-author Ethan Hellman.
What BTQ Technologies has now done is to take the proposal and turn it into running infrastructure.
The Bitcoin Quantum testnet v0.3.0, which BTQ released today, is a fully functional test network that allows developers, miners, and researchers to interact with BIP 360 transactions in real time.
According to BTQ’s CEO, Olivier Roussy Newton, “BIP 360 was a landmark proposal, and we’ve turned it into a landmark implementation. Every developer, researcher, and institution that wants to understand how quantum-safe Bitcoin actually works now has a live network to test against.”
Galaxy Digital explains the scale of quantum threat
Today, as well, Galaxy Digital released a research note written by analyst Will Owens.
Bitcoin’s security depends on a type of mathematics that is trivially easy in one direction but practically impossible to reverse on a regular computer. The only machines that can do this are known as cryptographically relevant quantum computers (or CRQCs).
But today’s quantum hardware has nowhere close to that capacity.
The vulnerable assets are what Galaxy called “long exposure coins” (wallets whose public keys are already permanently visible on-chain). The analysis from Project Eleven puts the total amount of long-exposure tokens at approximately 7 million BTC, which is around $490 billion.
The public debate is now tied between two camps. On one hand, some argue that quantum computers are decades away, so the urgency is exaggerated. On the other hand, some argue that a capable machine could be built within 1-2 years and that Bitcoin is at huge risk.
Galaxy’s research note reveals that both camps are missing the main point: Bitcoin’s historically slow upgrades mean that preparation needs to start long before the threat actually arrives.
The real problem is not the technology
Both BTQ and Galaxy have identified the same problem: actually getting quantum-resistant tools deployed across a network without a CEO, board, or any mechanism to force a software update.
Any change to Bitcoin’s core rules requires voluntary consent from developers, miners, node operators, wallet providers, and exchanges, meaning the process has never been fast.
Galaxy Digital’s note pegged SegWit and Taproot at between 7.5 years and 8.5 years from conception to implementation, respectively. As such, a quantum upgrade can only begin when consensus is achieved.
Nonetheless, BTQ is not waiting for events to play out. Shipping a live implementation today with over 50 miners, 100,000 blocks mined, and a functioning developer environment allows the project to ensure that when the public demands working proof of a solution, it already exists.
