Galaxy Digital commits $5 million to Bitcoin quantum computing defense initiative

Galaxy Digital has launched a Bitcoin Quantum Readiness Initiative, committing up to $5 million in grants to defend the network against future quantum computing threats. The initiative aims to fund developers, publish research, and convene an advisory council to address the risk that quantum computers could break Bitcoin's cryptography, potentially exposing up to 7 million BTC worth over $460 billion to theft.

Galaxy Digital quantum initiative

• ▪The Quantum Advisory Council's inaugural members are Barry Sanders, Damien Bérubé, and Eran Tromer.
• ▪Galaxy Digital has committed up to $5 million in grants for developers working on post-quantum security solutions.
• ▪The initiative consists of three pillars: developer grants, a research program through Galaxy Research, and a Quantum Advisory Council.
• ▪Galaxy Digital launched the 'Bitcoin Quantum Readiness Initiative' to prepare the network for threats from quantum computing.

Bitcoin quantum vulnerability

• ▪A quantum computer running Shor's algorithm could derive a private key from an exposed public key, enabling theft.
• ▪Analytics provider Glassnode estimates that about 30% of Bitcoin's supply could be exposed to quantum threats.
• ▪Bitcoin's security relies on elliptic curve cryptography, which is vulnerable to being broken by a sufficiently powerful quantum computer.
• ▪An estimated 6.9 to 7 million bitcoin, worth about $461 billion, could be vulnerable to quantum attacks.
• ▪Old and reused addresses are most at risk because their public keys are permanently exposed on the ledger.

Post-quantum defense proposals

• ▪The U.S. National Institute of Standards and Technology (NIST) finalized its first post-quantum cryptography standards in 2024.
• ▪Proposals to upgrade Bitcoin include BIP-360 and BIP-361, which address post-quantum cryptography.
• ▪Proposed defenses include migrating funds to quantum-resistant addresses and adopting new signature schemes.

Quantum computing timeline

• ▪A U.S. executive order set a 2031 deadline for federal agencies to prepare for quantum attacks on existing cryptographic systems.
• ▪While no cryptographically relevant quantum computer exists today, the expected timeline for developing one is shortening.
• ▪Project Eleven, a quantum security firm, projects a cryptographically relevant quantum computer is likely by 2033 and possibly as early as 2030.
• ▪A Bernstein report stated Bitcoin has about three to five years to prepare, while Blockstream's CEO estimated a 20 to 40 year window.

Bitcoin governance obstacles

• ▪Bitcoin's decentralized governance means major security upgrades can take years to design, review, test, and deploy.
• ▪The number of developers actively working on quantum resistance for Bitcoin is considered relatively small.
• ▪Upgrading the protocol requires significant coordination across developers, wallets, exchanges, miners, and users.

Developer grant program

• ▪Galaxy Digital will begin accepting grant applications immediately, with funds awarded based on milestones.

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