El Salvador transferred more than $678 million worth of Bitcoin into several wallets for security purposes. The government moved approximately 6,274 BTC from a single national address into 14 separate addresses in a single sweep, each capped at 500 BTC, in late August. The decision, confirmed by the National Bitcoin Office (ONBTC), was reportedly made due to the government’s caution over risks posed by developments in quantum computing, even though programmers agree the threat could come far in the future. Bitcoin moved due to the quantum computing threat Until recently, the country’s Bitcoin reserve was stored in one address. If the address had been compromised, El Salvador’s entire Bitcoin holdings could have been exposed. The ONBTC said the “shard and spread” operation reduces the country’s holdings exposure to quantum computing. “By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized,” the office said in a post on X. The redistribution comes less than a year after El Salvador secured a $1.4 billion funding deal from the International Monetary Fund (IMF). The agreement required the country to scale back some of its Bitcoin initiatives, which the Central American jurisdiction seemingly ignored. President Nayib Bukele and his delegates contested some IMF terms , which allowed the government to retain the ability to use Bitcoin as legal tender. This provision allows Salvadorans to accept Bitcoin voluntarily, without mandating its use through the state-backed Chivo wallet. The quantum computing debate In 1994, mathematician Peter Shor introduced the quantum algorithm that bears his name, which theoretically undermines the security of asymmetric cryptography. Suppose a sufficiently powerful quantum computer could run Shor’s algorithm. In that case, it might generate private keys from public keys, which can be used to forge digital signatures and unauthorized transactions. A quantum research company, Project Eleven, estimated that more than 6.641 million BTC could be at risk if elliptic-curve cryptography were compromised. However, it asserted that no existing quantum computer has come close to achieving such capabilities. Reasons for BTC at risk chart. Source: Project 11 PE admitted that no public machine has cracked even a toy example of a 3-bit key, let alone Bitcoin’s 256-bit Elliptic Curve Digital Signature Algorithm (ECDSA), and estimated the threat decades away, if it materializes at all. On the Bitcoin blockchain, transactions take around 10 minutes to be confirmed, though congestion can cause delays. Security researchers note that the network will still be secure if it takes a quantum computer longer than this window to derive a private key from a public key. According to scientific estimates done by risk management firm Deloitte, a quantum computer could require about eight hours to crack an RSA key. Some calculations show that a Bitcoin signature might be vulnerable within 30 minutes, but in principle, the blockchain is considered resistant to such attacks, provided that users avoid reusing addresses. Change Bitcoin addresses to quantum-resistant signatures Bitcoin’s codebase can also be upgraded to adopt quantum-resistant cryptographic standards long before any quantum computing attacks become reality. Still, despite the reassurances, Solana co-founder Anatoly Yakovenko suggested last week there’s a significant chance a breakthrough will come very soon, Cryptopolitan reported . “I feel 50/50 within five years, there is a quantum breakthrough,” Yakovenko said, “We should migrate Bitcoin to a quantum-resistant signature scheme. Michael Saylor, executive chairman of Strategy and a vocal Bitcoin advocate, took an opposite view from the Solana Labs CEO’s view. In June, he toned down the threat to “hype,” saying the network could adapt if required. “The answer is: Bitcoin network hardware upgrade, Bitcoin network software upgrade, just like [how] Microsoft, Google, the US government upgrade,” Saylor surmised. Get $50 free to trade crypto when you sign up to Bybit now
