A groundbreaking Bitcoin Improvement Proposal (BIP) was unveiled today, aiming to transition Bitcoin to post-quantum (PQ) cryptography and outlining the implications for stakeholders who do not upgrade their systems.
The proposal introduces a structured approach to eliminate the reliance on current ECDSA/Schnorr signatures, which could be vulnerable to potential quantum computer attacks capable of breaching private keys and stealing Bitcoin. The plan emphasizes the importance of quantum security as a crucial incentive, warning that failure to upgrade could result in the permanent loss of funds.
“We aim to safeguard the UTXO set’s value and minimize the risks of quantum attacks,” the proposal stated. “Bitcoin has never before encountered such a critical threat to its cryptographic foundations. A successful quantum attack could lead to significant economic turmoil and widespread damage throughout the ecosystem, affecting everything from prices to miners’ ability to secure the network.”
The proposal outlines three distinct phases:
Phase A prohibits the transfer of Bitcoin to quantum-vulnerable addresses, encouraging the adoption of the post-quantum address type (P2QRH).
Phase B, slated to activate two years after Phase A, renders all ECDSA/Schnorr based transactions invalid, effectively freezing any funds that have not been migrated.
Phase C, an optional phase pending further research, may provide a recovery mechanism involving proof of possession of a corresponding BIP-39 seed phrase.
The proposal’s rationale stems from the rapid advancements in quantum computing. In 2024, NIST approved several post-quantum signature schemes, while experts predict that a quantum computer capable of breaking classical encryption could emerge as soon as 2027-2030. The proposal highlights that approximately 25% of all Bitcoin currently have exposed public keys on-chain, making them susceptible to quantum theft.
By blocking transactions to quantum-vulnerable addresses, the proposal aims to shrink the potential attack surface with each new UTXO created. This strategic move is designed to expedite the adoption of post-quantum address formats by mandating them as the sole valid option moving forward. Given the time-consuming nature of Bitcoin upgrades, this approach is intended to prompt stakeholders to take action promptly.
For those interested in delving deeper into the BIP, the full proposal can be accessed here.
This innovative proposal marks a significant step towards fortifying Bitcoin’s security against quantum threats and underscores the critical importance of proactive adaptation in the ever-evolving landscape of digital assets.