Bitcoin, Ethereum Race to Beat Quantum Threat

Bitcoin and Ethereum developers are stepping up efforts to make their networks resistant to quantum computing as the U.S. government increases investment in technology that could eventually threaten cryptocurrency security.

The U.S. Commerce Department finalized CHIPS Act awards on Tuesday worth up to $100 million each for quantum computing companies Rigetti, D-Wave and Quantinuum. The government is also taking minority stakes in the companies, with funding focused on scaling quantum hardware, manufacturing and error-correction technology needed for larger fault-tolerant systems.

The developments have increased urgency around post-quantum cryptography for Bitcoin and Ethereum. Ethereum's protocol team has established December 2029 as its target for making the base layer quantum-resistant across execution, consensus and data systems. Developers are preparing for the possibility that a cryptographically relevant quantum computer could emerge as early as 2030.

Bitcoin has not established a network-wide deadline. However, developers are advancing BIP-360, which proposes a post-quantum output type, and BIP-361, which outlines a gradual transition away from the ECDSA and Schnorr signatures currently protecting Bitcoin transactions. Researchers have also identified 2029 as an important period for establishing a credible migration strategy.

That timeline does not mean quantum computers are expected to break Bitcoin or Ethereum by 2029. Google Quantum AI recently estimated that compromising 256-bit elliptic-curve cryptography could require fewer than 1,200 error-corrected qubits.

IBM plans to introduce its Starling fault-tolerant quantum computer in 2029, targeting 200 logical qubits and 100 million quantum gates. Quantinuum is similarly aiming for hundreds of logical qubits around that period.

Bitcoin faces a particularly complicated transition because millions of BTC remain in addresses with exposed public keys, including an estimated 1 million BTC attributed to Satoshi Nakamoto. BIP-361 proposes eventually limiting legacy signatures, potentially leaving unmoved coins inaccessible.

Ethereum faces its own migration challenge. Although the Ethereum Foundation has a dedicated post-quantum team, wallets, decentralized applications and users would still need to adopt new cryptographic standards.

The growing quantum computing race therefore centers on whether Bitcoin and Ethereum can upgrade their security before sufficiently powerful quantum machines become capable of threatening today's cryptography.