Bitcoin Industry Mobilizes on Quantum Computing Threat with New Cryptographic Solutions and Funding Initiatives

As the Bitcoin industry prepares for potential quantum risks, Project Eleven announced in mid-July 2026 an unaudited zero-knowledge proof prototype that, according to the company, uses wallet key derivation paths to help verify ownership after Q-Day and would require protocol-level support before deployment. Separately, Galaxy launched its Bitcoin Quantum Readiness Initiative on July 21, committing up to $5 million in developer grants and forming a Quantum Advisory Council, while BIP-360 had entered formal review in February 2026.

Project Eleven ownership proof

• ▪Project Eleven introduced an unaudited post-quantum zero-knowledge proof prototype designed to verify Bitcoin wallet ownership after a quantum attack
• ▪Project Eleven reported that its prototype generated proofs in 243 milliseconds and verified them in 40 milliseconds on an Apple M5 MacBook Air
• ▪According to Project Eleven, the prototype implementation was developed by Jim Posen, lead maintainer of the Binius zero-knowledge proof system, with funding from Project Eleven.
• ▪Project Eleven said its proof system supports P2PKH, P2WPKH, and P2SH-P2WPKH address types, but real-world deployment would require explicit protocol-level blockchain support

Q-Day quantum threat

• ▪According to U.Today and TheCryptoUpdates, a sufficiently powerful quantum computer using Shor's algorithm could threaten roughly 35% of Bitcoin's circulating supply, including early-era P2PK outputs and reused addresses with exposed public keys
• ▪Coinbase's quantum advisory council warned in June 2026 that approximately 7 million bitcoins could be vulnerable to quantum attacks.
• ▪"Q-Day" refers to the future point when quantum computers can break elliptic curve cryptography, allowing attackers to derive private keys from public keys.

Key derivation path technique

• ▪According to Project Eleven, the key derivation path technique builds on "signature lifting" research originally proposed by Alon Sattath and Robert Wyborski.
• ▪Project Eleven said its technique uses a wallet's key derivation path to prove control of the parent key without revealing it
• ▪According to Project Eleven, its prototype is approximately 16 times faster than a previous approach by developer Olaoluwa Osuntokun, which required 14.6 seconds

BIP-360 protocol upgrade

• ▪BTQ Technologies launched the first working implementation of BIP-360 on its Bitcoin Quantum testnet in March 2026.
• ▪U.Today and TheCryptoUpdates reported that BIP-360 and BIP-361 reflect the logic of Satoshi Nakamoto's 2010 proposal to migrate Bitcoin's cryptography by a deadline tied to a specific block height.
• ▪U.Today and TheCryptoUpdates reported that implementing the upgrade approach they attributed to Satoshi Nakamoto would increase transaction data size by approximately 57%, which they said would raise user fees
• ▪Bitcoin developers advanced the BIP-360 improvement proposal into formal review in February 2026 to lay groundwork for quantum-resistant upgrades

Regulatory quantum security actions

• ▪Galaxy's initiative established a Quantum Advisory Council including Barry Sanders, Damien Bérubé, and Eran Tromer to guide research and grants.
• ▪Galaxy launched the Galaxy Bitcoin Quantum Readiness Initiative, committing up to $5 million in developer grants for post-quantum solutions
• ▪President Donald Trump signed executive orders in June 2026 to accelerate the federal government's transition to post-quantum cryptography
• ▪The National Institute of Standards and Technology finalized its first post-quantum cryptography standards in 2024