What’s the Q-Day prize?
The Q-Day Prize is a problem to make the Bitcoin community quantum resistant.
On April 16, 2025, quantum computing-focused firm Undertaking 11 introduced the “Q-Day Prize,” a contest to interrupt a “toy model” of Bitcoin’s cryptography with a quantum pc. Contestants should full the Q-Day Prize problem by April 5, 2026.
Their reward? 1 Bitcoin (BTC).
The “Q” in Q-Day refers to quantum computing, the potential menace to many present cryptographic safety measures.
However can quantum computer systems break Bitcoin? Let’s discover out.
Quantum computing and the menace to Bitcoin
Bitcoin makes use of the SHA-256 hashing algorithm, a Nationwide Safety Company (NSA)-developed encryption algorithm. SHA-256 prevents brute drive assaults in opposition to the Bitcoin community, as decrypting it with present {hardware} can take a long time. Nonetheless, the rising menace to SHA-256 is quantum computing, a way of computing that harnesses quantum physics and is far quicker than conventional computing.
At a basic stage, quantum computing makes use of quantum bits (qubits), which might exist in a number of states. This contradicts binary (conventional) computing, which makes use of binary bits (1s and 0s). In 1994, mathematician Peter Shor offered an algorithm for quantum computer systems to resolve complicated algorithms in seconds, fairly than the a long time it might probably take for typical {hardware}. On the time, no {hardware} might successfully run it, however current advances like Google Willow are nearing that functionality.
Quantum computing, when paired with Shor’s algorithm, can disrupt Bitcoin cryptographic programs as we all know them. Shor’s algorithm permits quantum computer systems to resolve complicated math tremendous quick, probably threatening Bitcoin’s security.
Do you know? If quantum tech will get sturdy sufficient, Bitcoin’s present safety might turn out to be out of date, so builders are racing to create “quantum-proof” shields utilizing new math that even Shor’s algorithm can’t break.
Quantum menace to Bitcoin: How actual is the hazard?
Bitcoin is susceptible to quantum computing, however how critical is the chance?
Once you create a crypto pockets, it generates two essential issues: a non-public key and a public key. The personal secret’s a secret code, like a password, that you need to maintain secure. The general public secret’s created out of your personal key, and your pockets handle (like a checking account quantity) is produced from the general public key.
You share your pockets handle with others to allow them to ship you cryptocurrency, similar to you share your e-mail handle for somebody to contact you. Nonetheless, you by no means share your personal key. It’s just like the password to your e-mail — solely you want it to entry and spend the cash in your pockets.
Your personal key is sort of a grasp password that controls your crypto pockets. From this personal key, your pockets can create many public keys, and every public key generates a pockets handle.
For instance, for those who use a {hardware} pockets, it has one personal key however can create limitless public keys (pockets addresses). This implies you’ll be able to have completely different addresses for every cryptocurrency supported by the pockets and even a number of addresses for a similar cryptocurrency, all managed by a single personal key.
Whereas producing a public key from a non-public secret’s simple, determining a non-public key from a public secret’s extraordinarily laborious — virtually unimaginable — which retains your pockets safe. Each time you ship cryptocurrency, your personal key creates a particular code referred to as a signature. This signature proves you personal the funds and need to ship them. The system that makes use of your personal key, public key and signature to safe transactions is known as the Elliptic Curve Digital Signature Algorithm (ECDSA).
It’s believed that quantum computing might reverse the method and generate personal keys out of public ones. It’s feared that this might trigger many Bitcoin holders (particularly whales and Satoshi-era wallets) to lose their funds.
Bitcoin handle varieties and quantum dangers
Once you ship Bitcoin, you employ a selected handle kind to direct the fee. Every handle kind has distinctive options, affecting safety, privateness and vulnerability to quantum computing assaults like Shor’s algorithm.
P2PK handle varieties
Once you pay somebody with Bitcoin, the transaction is usually thought of a “pay-to-public-key” (P2PK). This was the commonest fee technique in 2009, in line with a report from consulting agency Deloitte.
A lot of the unique Bitcoin launched on the community’s launch is held in wallets with the P2PK handle kind, primarily because of the truth that they’ve despatched transactions since Bitcoin’s 2009 launch. These addresses are lengthy (as much as 130 characters), making them much less user-friendly.
Wallets with the P2PK handle kind are most prone to Shor’s algorithm, as it might probably brute drive the personal key from a P2PK pockets handle.
P2PKH handle varieties
There’s a second handle kind that’s extra proof against Shor’s algorithm: the pay-to-public-key-hash (P2PKH). P2PKH addresses are shorter and are generated from the hash (a novel, hexadecimal worth) of a public key created utilizing SHA-256 and RIPEMD-160 algorithms as a substitute of displaying the complete key itself.
These addresses are shorter (33-34 characters), begin with “1,” and are encoded in Base58 format. Such addresses are extensively used and embody a checksum to forestall typos, making them extra dependable.
P2PKH addresses are extra proof against Shor’s algorithm than P2PK as a result of the general public secret’s hashed. The general public secret’s solely revealed whenever you spend from the handle (not when receiving). If a P2PKH handle by no means sends Bitcoin, its public key stays hidden, providing higher safety in opposition to quantum assaults.
Nonetheless, reusing a P2PKH handle (sending from it a number of instances) exposes the general public key, rising vulnerability. Additionally, whenever you spend from a P2PKH handle, the general public key turns into seen on the blockchain, making transactions trackable.
Taproot addresses
Taproot is the latest handle kind, launched in November 2021 through the Taproot delicate fork. It makes use of Schnorr signatures as a substitute of the ECDSA signatures utilized by P2PK and P2PKH. These addresses begin with “bc1p,” use Bech32m encoding, and are 62 characters lengthy.
They provide higher privateness. Multisignature (multisig) transactions appear to be single-signature ones, hiding complicated spending circumstances. Nonetheless, Taproot addresses expose the general public key (or a tweaked model), making them susceptible to Shor’s algorithm, much like P2PK.
Do you know? Google’s “Willow” pc chip is able to fixing a posh drawback in simply 5 minutes. The identical job would take a classical supercomputer 10 septillion (!) years.
The race towards quantum-proofing Bitcoin
Quantum resistance is an actual problem, however not an unimaginable one.
Quantum computer systems, nonetheless in early improvement, might sooner or later use Shor’s algorithm to interrupt Bitcoin’s cryptography by deriving personal keys from public keys. This might threaten Bitcoin and different programs utilizing SHA-256 or ECDSA (the algorithms securing Bitcoin transactions). Nonetheless, this menace is just not imminent, and options are already in progress.
Whereas some consider that Undertaking 11 offered the Q-Day Prize to take down Bitcoin, the corporate claims this initiative is aimed toward “quantum-proofing” the community.
In July 2022, the US Division of Commerce’s Nationwide Institute of Requirements and Expertise (NIST) introduced 4 quantum-resistant cryptographic algorithms ensuing from a six-year problem to develop such options.
Quantum computing received’t develop in isolation, and centralized programs like authorities and monetary networks could possibly be greater targets than Bitcoin’s decentralized blockchain. These programs use outdated cryptography, like RSA, susceptible to Shor’s algorithm, and retailer delicate information (e.g., banking information). Their single factors of failure make breaches simpler than attacking Bitcoin’s distributed nodes.
The Worldwide Financial Fund warns quantum computer systems might disrupt cellular banking, whereas Dr. Michele Mosca from the Institute for Quantum Computing highlights “harvest-now, decrypt-later” dangers for centralized information (the place attackers retailer encrypted information at this time to decrypt with future quantum computer systems). In 2024, the G7 Cyber Professional Group urged monetary establishments to evaluate quantum dangers, noting that centralized programs’ information could possibly be uncovered if intercepted now and decrypted later.
Do you know? Many blockchain networks are exploring quantum-resistant algorithms, equivalent to Quantum Resistant Ledger or Algorand. These quantum computing blockchain safety strategies current a couple of completely different approaches.
How you can improve your safety in opposition to quantum threats
Whereas the quantum computing cryptocurrency threat is much less of a menace than one would possibly assume, it’s nonetheless finest to remain ready.
Nonetheless, for those who’re frightened about Bitcoin quantum vulnerability, there are a couple of precautions you’ll be able to take to safe your crypto funds.
- Keep away from reusing public addresses: Most crypto wallets help you generate a brand new public handle for each transaction. This follow will make it a lot tougher to trace your spending habits.
- Transfer funds to a non-public pockets: In the event you’ve been utilizing the identical public pockets handle for a while, contemplate shifting your funds to a brand new pockets with no historical past. This can assist maintain your spending habits personal.
- Use a unique blockchain community: Legacy networks like Bitcoin and Ethereum are thought of much less quantum resistant than newer networks with extra trendy safety algorithms. Take into account various networks with quantum resistance in thoughts.
- Keep knowledgeable: Take note of the outcomes of the Q-Day Prize problem, and keep updated with quantum computing information so you’ll be able to react accordingly. One of the best protection is an knowledgeable one.
Whereas quantum threat is just not speedy, builders and cybersecurity consultants are actively engaged on options to make sure long-term safety. Within the meantime, customers ought to keep up to date about Bitcoin protocol updates and finest practices, equivalent to avoiding handle reuse, because the community progressively strikes towards quantum resistance.
