Europol: Crypto Wallets Are the Quantum Canary in Bitcoin's Coal Mine 🪙

Europol published two reports Wednesday identifying cryptocurrency wallets as "the primary point of exposure to quantum threats" and urging the industry, policymakers and organizations to begin preparing for quantum computers capable of breaking widely used encryption. The reports, produced by the agency's European Cybercrime Centre, frame what researchers call Q-Day — the moment a sufficiently powerful quantum machine could crack older Bitcoin addresses and expose more than $452 billion in vulnerable wallets. Europol stressed that quantum computers cannot break Bitcoin's cryptography today, but cited advances from Google and IBM as evidence that the timeline is accelerating.

The agency warned that wallets rely on a pair of keys — a private key that authorizes transactions and a public key the network uses to verify them — and that a sufficiently powerful quantum computer could derive a private key from an exposed public key, letting an attacker spend funds without authorization. Hash functions that link blocks and underpin mining remain largely quantum-safe, the report said, since breaking a 256-bit hash would still require a number of operations it called "astronomically high with foreseeable technology." "Cryptocurrencies will not collapse due to quantum computing," the report concludes, while recommending "proactive defence" to ensure their long-term security.

Wallets whose public keys are already visible on-chain cannot be secured after the fact, the report said, and for those "the only solution is pre-emptive migration," with owners moving funds to new wallets before any attack. Blockchain analytics firm Glassnode estimated in May that 6.04 million $BTC, or 30.2% of the issued supply, has already had its public key exposed. The agency recommended a phased transition to quantum-resistant cryptography, alongside improvements to wallet security and key management.

Upgrading $BTC carries its own costs. NIST-standardized post-quantum signatures are 10 to 120 times larger than the ECDSA signatures Bitcoin uses today, which the report said threatens to overload block space, raise fees and slow confirmations. It cited a 2024 study estimating that migrating every unspent transaction output would require at least 76 days of cumulative downtime, or roughly 300 days if the work took up 25% of each block. The report cited IBM's roadmap, which targets a fault-tolerant quantum computer by 2029, and a 2025 survey in which 32 experts put the odds of a machine breaking RSA-2048 encryption in 24 hours within the next decade at 28% to 49%. The agency added that attackers can collect encrypted data now to decrypt it once more advanced computing is available, making early migration the only reliable defense.