Coinbase, holder of about 5% of bitcoin, urges quantum migration now

Coinbase, which holds about 5% of all bitcoin in existence for clients, is urging the network to migrate to quantum-resistant signatures now. The Nasdaq-listed exchange set out its position in a blog post reported by CoinDesk. The client base for those holdings includes banks, asset managers and hedge funds, according to that report.

A bitcoin wallet pairs a public key with a private key the holder keeps secret. Spending uses the private key to create a signature; Bitcoin checks it with ECDSA or Schnorr. Current computers cannot reverse-engineer a private key from a signature or public key, according to CoinDesk.

Google researchers have projected that a quantum computer able to reverse-engineer bitcoin private keys could exist by 2029, according to CoinDesk. None exists today, and the report notes other projections placing one within a few years.

Coinbase says a complete upgrade would have to secure existing and future coins, fit inside bitcoin's limited data space, keep ordinary computers running the network, and account for coins that may never move. It would also need to work for both large platforms and individual users. Its proposed answer is post-quantum cryptography: signature methods designed to withstand quantum attacks. The post argues the work needs to start immediately, largely because of bitcoin's decentralized design.

In September, this publication covered a Fortune op-ed by Chris Perkins that treated quantum as a migration-cost and diligence problem and located the institutional exposure in the wrapper layer rather than the chain.