Bitcoin vs. Quantum Computing: Is Crypto Security at Risk?

Quantum computing threatens to dismantle the cryptographic defenses that blockchains rely on

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Code & Culture
April 20, 2025

The 1 BTC Quantum Challenge Making Waves

Imagine someone offering a whole bitcoin (worth around $116,000 CAD as of this writing) to anyone who can break Bitcoin's security system using quantum computing. Sounds like science fiction? Well, it isn’t anymore. This is the premise of the "Q-Day Prize" recently launched by a group called Project Eleven. They’re daring researchers and technologists to use a quantum computer and break a simplified version of Bitcoin's cryptographic system.

It’s not just a publicity stunt. This prize highlights a growing concern in the tech and crypto communities: the power of quantum computing to crack systems we’ve long considered unbreakable.

In this article, we’ll explore:

  • Why Bitcoin's cryptography matters

  • What quantum computing actually is

  • Why this topic is becoming urgent

  • What it means for the average person holding crypto

  • And what’s being done to prepare for this next frontier

The Backbone of Bitcoin: How Cryptography Keeps It Secure

Bitcoin works because of a kind of digital lock-and-key system called cryptography. Every Bitcoin transaction is signed using a unique digital signature that can only be created with the owner's private key. Think of it as a secret password that proves you own your coins.

The technology behind this is something called Elliptic Curve Digital Signature Algorithm (or ECDSA). This form of encryption ensures that:

  • Only you can spend your Bitcoin

  • No one can alter a transaction without detection

Additionally, Bitcoin uses SHA-256, a secure hashing algorithm, to keep the blockchain (the distributed ledger of all transactions) secure and tamper-proof.

This system works well against traditional computers. But quantum computers are something else entirely.

What Is Quantum Computing?

Quantum computing is not just a faster version of today’s computers. It’s an entirely different way of processing information.

While traditional computers use bits that are either 0 or 1, quantum computers use qubits that can be 0, 1, or both at the same time. This property, called superposition, lets quantum computers solve certain problems much faster than normal computers ever could.

One quantum algorithm that worries cryptographers is Shor’s algorithm. It can, in theory, break the math behind ECDSA—the very system that protects Bitcoin.

The big question is: When will quantum computers become powerful enough to do this in the real world?

Project Eleven’s Q-Day Prize: A Wake-Up Call

On April 17, 2025, CoinDesk reported that Project Eleven is offering 1 BTC to whoever can break a simplified version of Bitcoin's cryptographic key using a quantum computer and Shor’s algorithm.

The goal isn’t to hack Bitcoin wallets or cause damage. Instead, it’s a call to action for the tech world to take quantum threats seriously and prepare now.

This contest is meant to test how close we are to a moment known as Q-Day—the day when quantum computers can actually break today’s encryption.

Why This Matters to Regular Bitcoin Users

You might be thinking: “So what? That’s years away.”

True, experts believe that the kind of quantum computer needed to break Bitcoin may not arrive until the 2030s or even later. But here’s the catch: once a quantum computer does become powerful enough, it could:

  • Steal coins from wallets whose public keys have been exposed

  • Forge transactions and disrupt the network

  • Undermine trust in the entire cryptocurrency ecosystem

According to a Deloitte study, up to 25% of all Bitcoins ever mined may be vulnerable to a quantum attack. That’s billions of dollars at stake.

That’s why the Q-Day Prize matters. It pushes us to test assumptions before real attackers do.

Governments Are Paying Attention

It’s not just startups and researchers. Governments are already planning for the quantum future.

The UK’s National Cyber Security Centre has urged companies to migrate to quantum-safe encryption by 2028, anticipating that quantum hacks could be a real threat by 2035. The U.S. is also working through NIST (National Institute of Standards and Technology) to finalize post-quantum cryptography standards.

These new standards are designed to protect against quantum threats while still being secure against today’s attacks.

So, What’s Being Done in the Crypto World?

The crypto community is not standing still. Many researchers and developers are working on what’s called post-quantum cryptography—algorithms that can’t be broken by quantum computers.

Some proposals for Bitcoin include:

  • Quantum-Resistant Wallets: New wallet formats that use quantum-safe algorithms

  • Hard Forks: Major protocol changes to update Bitcoin’s cryptography

  • Key Migration Tools: Helping users shift from vulnerable public keys to safer ones

But these solutions come with challenges. Bitcoin doesn’t change easily. Proposals need broad support from miners, developers, and users.

One major hurdle is what’s called cryptographic agility—the ability of a system to switch algorithms easily. Right now, Bitcoin isn’t very agile in this sense, making it harder to adapt quickly. (Wikipedia)

Are There Real-World Quantum Computers That Can Break Bitcoin Today?

No—not yet. Today’s quantum computers have only a few hundred qubits, and experts believe that breaking Bitcoin would take thousands or even millions of error-corrected qubits.

But progress is accelerating. Major tech companies like IBM, Google, and startups like PsiQuantum are racing to build larger, more stable quantum systems.

The Tom’s Guide article on World Quantum Day explains how researchers are using the day to highlight both the promise and the peril of quantum technologies.

Project Eleven’s challenge is partly symbolic—but it’s also a litmus test to track how far we’ve come.

What Can You Do as a Bitcoin Holder?

You don’t need to panic or sell all your crypto. But you should stay informed. Here’s how:

  1. Use modern wallets that don’t expose your public keys unless necessary.

  2. Keep your software updated so you benefit from future security upgrades.

  3. Follow news from trusted sources like CoinDesk and Deloitte.

  4. Participate in governance discussions (if you’re into that) around hard forks and upgrades.

Most importantly: support efforts to test Bitcoin’s resilience. Contests like the Q-Day Prize are not threats—they are tools for growth.

Awareness Is Our First Line of Defence

Quantum computing is not just a future concern—it’s a present-day planning challenge. While we’re not at Q-Day yet, initiatives like the Q-Day Prize are helping us get ready.

Just as Bitcoin itself emerged from a desire for financial transparency and resilience, so too must we approach quantum threats with the same mindset. Let’s ask the hard questions now, test the systems we rely on, and build toward a secure digital future.

Whether you’re a casual HODLer or a crypto builder, one thing is clear: the conversation about quantum risks is one worth having.

Resources, Further Reading and Updates