ChainCatcher report: On Wednesday, Europol, the European Union’s law enforcement agency, released two reports urging the industry and policymakers to proactively address the threat posed by quantum computing. The report titled “Quantum Computing and Cryptocurrencies,” authored by Europol’s European Cybercrime Centre, identifies cryptocurrency wallets as “the primary exposure point to quantum threats.” Wallets rely on private keys to authorize transactions and public keys for verification; sufficiently powerful quantum computers could derive private keys from exposed public keys, enabling attackers to access funds without authorization—a moment commonly referred to as Q-Day. The report notes that hash functions used to link blocks and support mining are largely quantum-resistant. It concludes that cryptocurrencies will not collapse due to quantum computing but recommends adopting “proactive defense” measures, including a phased transition to quantum-resistant cryptography and improved wallet security and key management. Wallets with public keys already exposed on-chain cannot be remedied retroactively; the report states the only solution is proactive migration. Glassnode estimated in May this year that 6.04 million BTC—30.2% of the circulating supply—have exposed public keys. Upgrading Bitcoin also carries costs: NIST-standardized post-quantum signatures are 10 to 120 times larger than Bitcoin’s current ECDSA signatures, potentially causing block space congestion and higher transaction fees. Citing a 2024 study, the report estimates that migrating all unspent transaction outputs would require at least 76 cumulative days of downtime. The second report, “Collect Now, Decrypt Later,” co-authored with Spain’s Universidad Carlos III de Madrid, examines the practice of attackers collecting encrypted data today to decrypt it in the future, identifying risks in protocols such as TLS, SSH, and OpenPGP.
Europol report warns that quantum computing poses a major risk to crypto wallets
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Summary
On Wednesday, Europol released a report warning that quantum computing could exploit publicly available on-chain data to break private key/public key pairs in cryptocurrency wallets. The European Cybercrime Centre identified wallets as the primary point of exposure, noting that quantum computers may derive private keys from public keys already published on the blockchain. This risk, known as Q-Day, could enable unauthorized access to funds. Glassnode estimates that 6.04 million BTC have exposed public keys. Transitioning to quantum-resistant cryptography is recommended, though it involves trade-offs such as larger signatures and increased blockchain congestion. A 2024 study suggested a 76-day downtime for a full migration. A second report from Europol and Universidad Carlos III de Madrid highlighted vulnerabilities in TLS, SSH, and OpenPGP.
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