A new report commissioned by Coinbase is sounding a cautious but urgent warning that quantum computing won’t break crypto tomorrow, but the industry can’t afford to wait.
The 50-page paper, authored by an independent advisory panel that included prominent cryptographers and academics such as Stanford University’s Dan Bohne, Ethereum Foundation’s Justin Drake, and Eigen Institute’s Sreeram Kannan, concludes that while today’s blockchains remain secure, future “fault-tolerant quantum computers” capable of breaking widely used cryptography are increasingly likely, and we should start preparing now.
Concerns about quantum risk have become more mainstream in recent months. Google researchers have published estimates that suggest a sufficiently advanced quantum computer could one day crack Bitcoin’s code.
Major cryptocurrency ecosystems have already begun making response plans. The Ethereum Foundation has proposed a new type of digital signature designed to be secure for quantum computers, and Solana and colleagues are experimenting with quantum-resistant wallet designs.
The report emphasizes that current quantum machines are not powerful enough to break the codes that underpin Bitcoin, Ethereum, and other networks. Breaking standard encryption requires significant computational overhead, which is still considered a major engineering challenge.
Still, the authors caution against complacency.
“We have great confidence that large-scale, fault-tolerant quantum computers will eventually be built,” the report said, adding that although the timeline is uncertain, “we are clearly getting closer.”
This uncertainty is precisely the problem, with estimates ranging from a few years to more than a decade, and there is no reliable way to predict breakthroughs.
This urgency is reflected in guidance from the US National Institute of Standards and Technology (NIST), which recommends a transition to quantum-resistant cryptography by 2035, a timeline the report suggests may even be optimistic.
“It is not a good idea to wait until there is an emergency,” the Coinbase paper states, emphasizing that migrations between blockchains, wallets, and exchanges can take years to be safely implemented.
Some assets may be more vulnerable than others. For example, a Bitcoin wallet that has already published its public key could be targeted, but a Bitcoin wallet that is still protected by a hash function may be safe in the short term.
Good news. Quantum-proof cryptography (PQC) already exists and has been standardized by NIST.
Bad news: Replacement isn’t easy.
Post-quantum digital signatures could be tens to hundreds of times larger than current digital signatures, significantly increasing the cost of blockchain data and reducing throughput. One estimate in the report suggests that replacing current signatures with quantum-resistant alternatives could increase block sizes by up to 38 times.
There are also usability challenges, from migrating millions of wallets to deciding what to do with inactive funds that are “lost” or not upgraded.
Rather than a single solution, this report outlines multiple migration strategies, including hybrid systems that combine post-quantum updates with existing encryption or allow for gradual switching as needed.
For now, the authors recommend a flexible approach that avoids current security or performance sacrifices while allowing for quick upgrades later.
“Now is the time to start preparing,” the report concludes.
Read more: Solana’s response to quantum threats reveals tough trade-offs: security and speed
