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Quantum computing poses challenges for the digital asset industry. It’s crucial for asset allocators to understand the actual risks, how pressing they are, and which blockchain networks are prepared. Our 21shares team is currently collaborating on a report with industry experts – including Alex Pruden of Project Eleven, Nic Carter of Castle Island Ventures, and Yehuda Lindell of Coinbase – to provide a detailed overview of the efforts taking place to combat this risk.

Ahead of its release, co-author Karim AbdelMawla tackles four key introductory questions on the topic.

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Q1: HOW DOES THE ENCRYPTION WE CURRENTLY RELY ON FOR DIGITAL SECURITY ACTUALLY WORK?

Karim: Every time you check your bank balance, unlock your phone, or send a message, hidden math keeps your information private.

Think of it like a special mailbox: anyone can drop a letter through the front slot, but only you have the key to open the back door. You can give your address to the whole world because knowing where the mailbox is doesn't help anyone unlock it.

Modern digital security – and the safety of your crypto wallet – relies on this "one-way" logic. While anyone can see your public address, it is practically impossible for a normal computer to work backward and figure out your private key. It would take a standard machine lifetimes to crack the code, and that massive time gap is what keeps your assets secure.

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Q2: SO WHAT EXACTLY IS QUANTUM COMPUTING, AND WHY DOES IT MATTER NOW?

Karim: A typical computer solves problems one step at a time, checking possibilities in sequence. A quantum computer is built differently: it uses the laws of quantum physics to look at many possibilities simultaneously. Think of a library search: a normal computer checks every book one by one, while a quantum computer scans the entire room at once. For most tasks, this doesn’t help – your laptop is still faster for daily work. But for the math that secures crypto wallets, this ability is a game changer. 

The risk is becoming relevant now because the tech is accelerating faster than most people realize. Within the last two years: 

• Google has proven that  a quantum computer can be scaled up without collapsing under its own errors – a milestone researchers have chased for nearly two decades.¹
• IBM committed to building its first reliable, large-scale quantum machine by 2029.²
• Microsoft found a way to build quantum computer parts previously thought impossible.³ 

Most recently – on March 30, 2026 – Google Quantum AI, the Ethereum Foundation, and Stanford published research showing that the computing power needed to break crypto security is about 20 times lower than previously estimated.⁴ While the actual threat is still years away, the deadline is moving closer much faster than expected.

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Q3: ARE BITCOIN AND THE REST OF THE BLOCKCHAIN ECOSYSTEM AT RISK TODAY?

Karim: Not today, and likely not for several years. The hardware required to break the encryption of any major network is still far beyond anything currently in existence. Credible timelines suggest the risk window lies between 2029 to 2035.

However, It is helpful to be precise about what is actually "at risk". The blockchain itself is safe. Think of Bitcoin’s ledger as a permanent record book held by every participant; quantum computing poses no threat to that history. Past entries cannot be rewritten, and the system continues to function as designed. 

The vulnerability exists one layer up: the digital signature that proves you own your account. Today, no one can fake that signature. However, a sufficiently powerful quantum computer could take public information already visible on the blockchain and work backward to reconstruct your private key. The ledger would remain accurate, but the guarantee that only you can access your account would vanish. 

This distinction matters because the conversation often focuses on the wrong threat. People often ask if a quantum computer could take over Bitcoin mining. The short answer is no. Bitcoin automatically increases the difficulty of its puzzle whenever new computing power joins the network. A faster miner doesn’t get a bigger share of the rewards; they simply force the entire network to work harder. A March 2026 study reveals the sheer impossibility of current quantum mining. Even in a best-case scenario, an operation would need 100 million quantum building blocks and ten gigawatts of power. For a realistic attack, the energy requirement scales to the total output of a star.⁵ More importantly, at a protocol level, a quantum miner would hit the same ceiling as a classical one, regardless of how advanced the hardware becomes.

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Q4: WHERE SHOULD INVESTORS FOCUS THEIR ATTENTION?

Karim: To begin with, many investors misunderstand what quantum computing actually puts at risk. It’s easy to think of traditional finance as the obvious target: banks hold vastly more money than any blockchain and rely on legacy cryptographic systems that are difficult to update. While true, this misses why crypto's position is actually more precarious. A bank can mandate a new security standard from the top down. Bitcoin has no such authority. Every wallet, exchange, and dormant holder must migrate to a quantum-resistant address independently, and no protocol can force them. In this specific case, decentralization – usually  a strength – makes the industry harder to defend.

It’s also key to be aware of the migration paths different networks are taking and to keep tabs on their progress, which is currently uneven.

• Bitcoin took its first formal step this year with a quantum-resistant address proposal, but deployment will take years and involves unresolved community debates. 
• Ethereum is structurally further along with its formal roadmap and ten teams working on migration. However, its architecture contains specific vulnerabilities (that the Google paper examined in detail⁴), and coordinating an ecosystem-wide upgrade remains a massive challenge.
• Solana has moved furthest in practice. In December 2025, it became the first major Layer-1 to run end-to-end post-quantum signatures on its testnet, in partnership with Project Eleven. The trade-off is performance: early tests showed signature sizes 20 to 40 times larger, and transaction speed dropping by roughly 90%, which challenges Solana’s core high-throughput model.

Every network’s path to quantum resistance is unique and our upcoming report outlines these differences in more detail. Our goal isn’t just to predict when the threat arrives, but to help you understand which networks are leading the charge, which are lagging, and what that means for long-term value.

Sign up for our newsletter to be notified as soon as the report is available.

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Footnotes: 

1. Google Quantum AI and Collaborators, "Quantum error correction below the surface code threshold," Nature 638, 920–926, December 2024. https://www.nature.com/articles/s41586-024-08449-y
2. IBM Quantum, "IBM lays out clear path to fault-tolerant quantum computing," IBM Quantum Computing Blog, June 2025. https://www.ibm.com/quantum/blog/large-scale-ftqc
3. Microsoft Azure Quantum, "Microsoft unveils Majorana 1, the world's first quantum processor powered by topological qubits," Microsoft Azure Quantum Blog, February 2025. https://azure.microsoft.com/en-us/blog/quantum/2025/02/19/microsoft-unveils-majorana-1-the-worlds-first-quantum-processor-powered-by-topological-qubits/
4. Google Quantum AI, "Safeguarding cryptocurrency by disclosing quantum vulnerabilities responsibly," Google Research Blog, March 2026. https://research.google/blog/safeguarding-cryptocurrency-by-disclosing-quantum-vulnerabilities-responsibly/‍
5. Dallaire-Demers, P.-L. and BTQ Technologies Team, "Kardashev scale Quantum Computing for Bitcoin Mining," arXiv:2603.25519 [quant-ph], March 2026. https://arxiv.org/abs/2603.25519