ARK Digital-Assets Research Director Says 70% of Adviser Questions Concern Quantum Risk

About 70% of questions that registered investment advisers and wealth-management platforms ask ARK Invest concern quantum risk, said Lorenzo Valente, the firm’s director of research for digital assets.

The questions focus on whether the digital signatures securing blockchain transactions will need to be replaced and which networks have plans to address the threat. Token inflation and protocol revenue are less familiar topics for many of the professional investors asking about crypto, Valente said.

ARK Invest’s internal view places the risk from quantum computers roughly 10 to 20 years away. Valente cautioned that quantum computing is not his research specialty and said he is not a cryptographer, while noting that rapid advances in artificial intelligence have made technology timelines harder to estimate.

The concern centers on current cryptographic systems used to secure Bitcoin (BTC) and other blockchain networks. A sufficiently powerful quantum computer could eventually threaten the signatures that protect digital-asset keys, creating pressure for networks to adopt newer signature standards.

Valente said he is now more confident than he was a year ago that Bitcoin will transition before quantum computers can break its current cryptography. “I was much more worried a year ago,” he said, adding that companies and developers are working on the issue.

ARK Invest has discussed the matter with major industry participants and Bitcoin core developers, Valente said. The firm is part of the Bitcoin Security Consortium, whose founding members include Strategy, formerly MicroStrategy, along with BlackRock, Coinbase and Fidelity Digital Assets.

Exchange operators, exchange-traded fund issuers, developers and miners all have a stake in preparing Bitcoin for a potential cryptographic transition, Valente said. He added that more companies now depend on Bitcoin than they did two or three years ago.