Quantum Threat Looms Large Over Blockchain Industry

A report by Coinbase's advisory board has highlighted the growing threat of quantum computers breaking blockchain encryption. The six-member panel, comprising leading cryptographers and computer scientists, concludes that a powerful enough machine will eventually be built, but warns that the industry must begin migrating to post-quantum cryptography now.

The threat is not imminent, with at least two major engineering leaps required before a capable machine exists. However, the migration process will take years, making early preparation essential. The report estimates that approximately 6.9 million Bitcoin, worth hundreds of billions of dollars, are held in wallets where the public key is visible on the blockchain.

The panel recommends using post-quantum checkpoints and '1-of-2 signing' to avoid paying a performance penalty until necessary. They also suggest a phased approach for the consensus layer, with a plan to periodically sign groups of blocks with a post-quantum signature. The report highlights the lack of a post-quantum equivalent of BLS signatures as a significant gap in current cryptography.