Quantum computing, long considered a distant but existential threat to blockchain security, is now on a much faster timeline according to a new analysis from Citi. In a report released on Friday, the global investment bank stated that advances in quantum computing are arriving faster than many in the industry anticipated. This compression of the quantum timeline signals rising risks for the cryptographic systems underpinning cryptocurrencies, with Bitcoin singled out as being uniquely vulnerable due to its slower, more deliberative governance structure.
Quantum computers, which leverage the principles of quantum mechanics to perform certain types of calculations exponentially faster than classical computers, pose a direct threat to public-key cryptography. The elliptic curve digital signature algorithm (ECDSA) used by Bitcoin and many other blockchains could be broken by a sufficiently powerful quantum machine. An attacker with a quantum computer capable of running Shor's algorithm could derive private keys from public ones, enabling theft of funds and forging of transactions. While such a machine does not exist today, recent breakthroughs have accelerated the timetable for its arrival.
The Quantum Computing Acceleration
In the last 18 months, the quantum computing space has seen remarkable progress. Google's announcement of its Willow chip, which demonstrated error correction improvements and a leap in qubit coherence, was a milestone. IBM published its roadmap aiming for 1,000 logical qubits by the end of the decade, and multiple startups have achieved quantum supremacy demonstrations or near-error-correction thresholds. However, the Citi report emphasizes that the real accelerator is artificial intelligence. AI is being used to improve qubit calibration, error mitigation, and algorithm optimization, effectively pulling forward the date when a cryptographically relevant quantum computer (CRQC) could be built.
Historically, predictions of a quantum threat to Bitcoin were often dismissed as being decades away. The commonly cited benchmark is a machine capable of breaking ECDSA-256 in under 24 hours, requiring roughly 10 to 100 million physical qubits (or approximately 1,500 logical qubits with a low error rate). While the physical qubit count still seems far, the pace of error correction advances has surprised many. Combine that with AI-driven breakthroughs, and the timeline shrinks from 30 years to perhaps 15 years, or even less. Citi now suggests that the risk window for crypto may be less than a decade, a stark shift from previous assessments.
Bitcoin: Governance as a Liability
The report highlights that Bitcoin's decentralized governance, often hailed as its strength, becomes a liability in the face of a fast-approaching quantum threat. Bitcoin improvements require broad consensus across a large base of miners, developers, and node operators. Proposals such as a post-quantum signature scheme (e.g., Lamport signatures, or newer proposals like FROST for threshold signatures) would require a soft fork or potentially a hard fork, both of which are politically and technically challenging to deploy in a timely manner. The Bitcoin network has historically been conservative, prioritizing stability and security over rapid upgrades.
Citi notes that while the Bitcoin community has been discussing quantum resistance for years, the actual implementation lags. No concrete proposal has reached the level of widespread agreement. In contrast, other blockchains with more agile governance structures, particularly those using on-chain governance or foundation-led upgrades, can implement changes much faster. Ethereum, for example, has already migrated to proof-of-stake and actively considers quantum-resistant features. The Ethereum Foundation has funded research into post-quantum cryptography, and the network could integrate such changes via a scheduled hard fork, a process that has been successfully executed multiple times.
Ethereum and Proof-of-Stake Networks
Citi’s analysis suggests that Ethereum and other proof-of-stake (PoS) networks are better positioned to adapt. The move to PoS eliminated the security dependency on miners, and the network’s upgrade mechanism is more streamlined. Furthermore, Ethereum’s co-founders and developers have shown greater awareness of the quantum threat. Vitalik Buterin has written about quantum-resistant signatures and the importance of building abstraction layers that allow for easy updates of cryptographic primitives. Some newer chains, such as Algorand and Solana, have already incorporated post-quantum signatures or have long-term roadmaps that include them.
Nevertheless, no blockchain is immune. The quantum threat extends beyond digital signatures. Hash functions such as SHA-256, used in Bitcoin mining, are less vulnerable (Grover's algorithm only provides a quadratic speedup), but the risk to public-key cryptography remains the critical issue. Additionally, any wallet that has ever broadcast a signature (i.e., addresses with a history of outgoing transactions) has exposed its public key, making it vulnerable to a quantum attack that could derive the private key. Bitcoin addresses that have never spent funds (such as many old “hodl” addresses) are safer because only their hash is visible, but once a transaction is made, the public key is revealed. This means the entire ecosystem of active funds is at risk once a CRQC exists.
The Role of AI and Broader Infrastructure Risks
The Citi report also echoes warnings from cybersecurity experts who note that AI is accelerating the quantum timeline. AI algorithms are being used to design better quantum error correction codes, optimize transistor architectures for superconducting qubits, and simulate molecular structures that could lead to new qubit modalities. Additionally, AI-driven optimization of classical simulations reduces the need for exclusive reliance on physical quantum computers, shortening the path to useful hybrid systems. The combination of AI and quantum has been described as a force multiplier, and the crypto industry must prepare for a future where today’s encryption systems may no longer be reliable.
It is not just crypto that is threatened. The entire internet relies on public-key cryptography for SSL/TLS secure connections, VPNs, and digital signatures. Citi’s report notes that a CRQC would break most modern encryption, exposing financial transactions, government communications, and personal data. The transition to post-quantum cryptography (PQC) is already underway at government levels; the U.S. National Institute of Standards and Technology (NIST) selected several PQC algorithms in 2024, and migration efforts on the internet are expected to take a decade or more. For crypto, the timeline may be shorter because the threat is more direct and the consequences more immediate.
Industry Preparation and the Path Forward
Several initiatives are underway to harden blockchains against quantum threats. The Bitcoin network has considered “quantum-resistant” addresses, such as those using Lamport signatures, but these are cumbersome and have not been adopted. Some projects are building quantum-proof blockchains from the ground up, such as QANplatform and Quantum Resistant Ledger (QRL). Others are exploring novel solutions like “quantum secure blockchain” through homomorphic encryption or lattice-based cryptography.
The Citi report recommends that crypto investors and stakeholders begin planning for a quantum transition now. This includes supporting research into post-quantum cryptographic methods, encouraging ecosystem-wide dialogue, and preparing governance structures that can act decisively when needed. The bank also warns that the speed of quantum breakthroughs could outpace the current upgrade cycles, especially for Bitcoin. If a CRQC is demonstrated only a few years from now, there may not be enough time to upgrade the entire Bitcoin network before the risk becomes active.
Developers and wallet providers should consider implementing disposable or rotating keys, multi-signature schemes that require fewer exposed public keys, and perhaps even commit to migrating to quantum-resistant algorithms before a threat is imminent. Education and awareness are equally crucial; many users do not realize that their existing addresses are at risk once they have been used in a transaction. Some analysts propose a “quantum census” to identify at-risk UTXOs (unspent transaction outputs) and encourage early migration.
Conclusion not needed
The industry stands at a crossroads. Quantum computing is no longer a distant hypothetical; it is a rapidly approaching reality that demands immediate attention. Bitcoin, as the most valuable and most rigidly governed cryptocurrency, faces the greatest challenge. Yet the entire crypto ecosystem must wake up to the quantum threat and coordinate a global response. Whether through formal upgrades, new implementations, or a combination of both, the time to act is now. The clock is ticking, and each new quantum breakthrough brings the day of reckoning closer.
Source: Coindesk News