TL;DR:
- Risk level identified: 30% to 35% of Bitcoin’s circulating supply is held in older addresses with exposed public keys.
- Timeline projection: Estimates presented by Fundstrat place the advancement of quantum technology between 2028 and 2029.
- Network mechanism: Ownership of funds on the Bitcoin network is secured through ECDSA digital signatures rather than direct encryption.
Tom Lee, co-founder of Fundstrat, recently stated that quantum computing would impact Bitcoin between 2028 and 2029. Fundstrat’s report indicates that advances in modern computing could make the current protection system obsolete without a timely upgrade.
Following Fundstrat’s statements, the discussion once again focused on cryptographic resistance. In a live presentation, Tom Lee referenced research published by Google to argue that quantum processor development is moving faster than the industry anticipated.
According to Fundstrat, the Ethereum and Solana ecosystems possess adaptive structures that would allow them to respond more nimbly to these threats. However, various tech sector analysts have questioned the scope of this diagnosis.
bitcoin doesn’t use encryption (for spending).
— Adam Back (@adam3us) August 5, 2026
In response to these claims, Hashcash pioneer and cypherpunk figure Adam Back clarified the technical inaccuracies of the approach. As Back explained, the Bitcoin network’s architecture does not use encryption for standard transaction processing, making the concept of “decrypting” the chain computer-scientifically inaccurate.
The real impact of Shor’s algorithm on exposed addresses
The security of funds on the network rests on digital signatures based on the ECDSA algorithm. Likewise, seed phrases utilize high entropy levels that prevent breach through brute-force attacks, even when using high-capacity processing hardware.
However, technical documentation suggests that the theoretical vulnerability to Shor’s algorithm concentrates on a specific segment of the ledger. Industry estimates indicate that between 30% and 35% of the total bitcoin supply—equivalent to roughly 7 million BTC—remains in legacy addresses or wallets where the public key was already exposed on the blockchain.
Starting from an exposed public key, a quantum computer with adequate capacity could theoretically derive the corresponding private key. This scenario would mainly affect wallets inactive since the network’s early years and accounts whose public keys became visible after making outbound transactions.
As of today, cryptographically relevant quantum computers capable of performing these calculations do not exist on the market, keeping the threat in a theoretical realm. Data from the Bitcoin developer community indicates that tests with post-quantum signature algorithms have been underway for years, anticipating network migrations before hardware achieves such capabilities.
A transition to new cryptographic standards could be executed through a hard fork without causing major operational failures in the protocol. Nevertheless, the main challenge lies in the 7 million inactive bitcoins—a group that includes the coins attributed to Satoshi Nakamoto and wallets with lost access.
To manage this remaining balance, the community is evaluating alternatives such as the proposed BIP-361. According to the details of this proposal, the network would have to choose between preemptively freezing the exposed supply that fails to migrate to secure addresses or leaving those funds vulnerable to eventual quantum developments.
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