Cryptocurrencies use cryptography as their primary security method to safeguard transactions and protect user assets, according to Ethereum’s operational model.
The system uses Elliptic Curve Digital Signature Algorithm (ECDSA) with the secp256k1 curve, as its security depends on the mathematical challenge of deriving private keys from public keys. Wallets and signatures remain secure because computers cannot yet solve this mathematical problem.
Quantum computing brings a new risk to that security framework. An advanced quantum computer running Shor’s algorithm could solve the ECDSA logarithm problem. This means it could, in theory, extract a user’s private key from an exposed public key.
Moreover, the quantum threat concerns not only wallet security but also bank accounts and social media passwords — a broad sector consolidating ahead of the upcoming Discord IPO.
Vitalik Buterin has publicly highlighted the risk
Buterin is keen to highlight the danger facing the crypto world, since it is an extremely sensitive industry.
If a user holds a high-cost coin or token, or a large position of, for instance, ETH, given the Ethereum price, the risk of losses would be fatal. He mentioned a prediction result from Metaculus. It states that there is a 20% chance that quantum computers capable of breaking cryptography will appear before 2030, and that rises to 40% between 2030 and 2040.
He warned at the Devconnect conference that hackers would probably succeed in breaking elliptic curve cryptography before the 2028 U.S. presidential election. He then advised organizations to establish quantum-safe cryptography solutions within the upcoming years.
Two Key Factors Explain The Current Situation:
- Public keys remain concealed until an address makes its initial transaction. A hacker with quantum hardware can use the public key, once disclosed, to access the private key through fundamental security violations.
- Today’s quantum computers are unable to break cryptography protection. The current machines have a limited number of qubits, ranging from dozens to a few hundred. They cannot yet mount effective attacks because they lack the necessary error-correction capabilities.
Academic research has reached a consensus that quantum machines pose a long-term threat because Shor’s algorithm breaks security by solving discrete logarithm and factorization problems, while Grover’s algorithm breaks security by solving hash functions. Studies on post-quantum cryptography (PQC) are currently taking proactive measures to develop practical solutions.
The Deloitte assessment of industry risks found that several funds already have “quantum exposed” status because their public keys were disclosed through their transaction activities, requiring them to switch to quantum-safe algorithms at some point in the future.
The researchers present two main findings that demonstrate that organizations do not need to fight current quantum threats because existing technologies do not pose immediate security risks. There are three reasons why people focus on this matter.
The process of migrating a blockchain system to quantum-resistant signatures requires more than technical skills, as it demands coordination across the entire blockchain ecosystem. The quantum threat exists as a future danger that researchers understand through established quantum algorithms and cryptographic principles.
Vitalik and his colleagues recommend blockchains to start their post-quantum cryptographic research, develop migration plans, and complete them three years before the actual implementation.