Quantum Computing Threatens Cryptographic Foundations of Crypto Assets
Quantum computing could one day break the cryptographic foundations that secure trillions of dollars in crypto assets—and according to a new report from Mysten Labs, some blockchains are more unprepared than others.
The report, released Wednesday, argues that networks using the EdDSA signature scheme—such as Solana, Sui, and Near—are structurally better positioned to withstand quantum threats.
Older chains like Bitcoin and Ethereum, which rely on the ECDSA system, face steeper cryptographic and logistical hurdles to implement post-quantum defenses.
As more corporations and governments establish Bitcoin treasuries, Kostas Chalkias, co-founder and Chief Cryptographer at Mysten Labs, said the pressure to meet post-quantum security standards is growing.
“Governments are well aware of the risks posed by quantum computing. Agencies worldwide have issued mandates that classical algorithms like ECDSA and RSA must be deprecated by 2030 or 2035,” Chalkias told Decrypt.
“That means if your blockchain supports sovereign assets, national treasuries in crypto, ETFs, or CBDCs, it will soon be required to adopt post-quantum cryptographic standards, if your community cares about long-term credibility and mass adoption,” he added.
Edwards-curve Digital Signature Algorithm (EdDSA) is a newer, faster, and easier-to-implement digital signature scheme that avoids common Elliptic Curve Digital Signature Algorithm (ECDSA) pitfalls, like compromised security from weak random number generation, nonce reuse, and side-channel leakage.
Both Bitcoin and Ethereum currently rely on ECDSA for transaction security and will eventually need to upgrade to quantum-resistant algorithms.
Chalkias warned that quantum computing poses an existential threat to cryptography and warned that once quantum computers scale, they could break the cryptographic assumptions behind most existing blockchains.
The threat stems from quantum machines’ ability to solve complex problems using Shor’s Algorithm. The method can quickly factor large numbers, making it capable of breaking the encryption behind widely used cryptographic systems like RSA and ECDSA.
Paired with Shor’s algorithm, that capability could allow attackers to use quantum computers to reverse-engineer private keys from public blockchain data. Even holding the private keys, Chalkias said, may not matter in a post-quantum world.
“Even if someone still holds their Bitcoin or Ethereum private key, they may not be able to generate a post-quantum secure proof of ownership, and this comes down to how that key was originally generated, and how much of its associated data has been exposed over time,” he said.
While quantum computers aren’t yet powerful enough to do this, according to San Jose State University computer science professor Ahmed Banafa, the time to prepare is now.
“To adopt this new method, Bitcoin will need to implement a hard fork,” Banafa told Decrypt. “This means having to change wallet addresses, migrate funds, and handle all the complications that come with it.”
Banafa acknowledged that the likelihood of this hard fork happening is small, pointing to the dispute in the Ethereum community over whether or not to rollback the blockchain after a hack that led to the creation of Ethereum Classic in 2015.
“It’s similar to when Ethereum split into Ethereum and Ethereum Classic,” he said. “We could see a similar split in Bitcoin, with some people insisting on a different approach and refusing to follow proposed upgrades.”
Another issue Banafa noted was the sheer number of Bitcoin and Ethereum wallets that have come into existence since the launch of those blockchains.
“The real challenge will be implementation—if users don’t upgrade or secure their accounts, they could pose a risk to the network,” he said. “And if they lose funds as a result, they may try to blame the network.”
According to Mysten Labs, if Bitcoin had used EdDSA from the start, even wallets belonging to Satoshi Nakamoto could be made quantum-safe.
Banafa noted, however, that hindsight plays a role in this debate. In 2009, when Bitcoin launched, quantum computing wasn’t on the radar.
“Back in 2019, people assumed SHA-256 was strong enough—it would take years to crack,” he said. “No one expected quantum computing to become as powerful as it is now.”