{"id":1313,"date":"2025-05-14T07:50:00","date_gmt":"2025-05-14T07:50:00","guid":{"rendered":"http:\/\/www.almatalent.net\/?p=1313"},"modified":"2025-05-14T14:43:11","modified_gmt":"2025-05-14T14:43:11","slug":"the-q-day-prize-challenge-explained-can-quantum-computers-really-break-bitcoin","status":"publish","type":"post","link":"http:\/\/www.almatalent.net\/index.php\/2025\/05\/14\/the-q-day-prize-challenge-explained-can-quantum-computers-really-break-bitcoin\/","title":{"rendered":"The Q-Day Prize challenge, explained: Can quantum computers really break Bitcoin?"},"content":{"rendered":"

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\"The<\/p>\n

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What is the Q-Day prize? <\/h2>\n

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The Q-Day Prize is a challenge to make the Bitcoin network quantum resistant.<\/em><\/p>\n

On April 16, 2025, quantum computing-focused company Project 11 announced the \u201cQ-Day Prize<\/a>,\u201d a competition to break a \u201ctoy version\u201d of Bitcoin\u2019s cryptography with a quantum computer. Contestants must complete the Q-Day Prize challenge<\/a> by April 5, 2026.<\/p>\n

Their reward? 1 Bitcoin (BTC<\/a>).<\/p>\n

\"Project<\/p>\n

The \u201cQ\u201d in Q-Day refers to quantum computing<\/a>, the potential threat to many existing cryptographic security measures.\u00a0<\/p>\n

But can quantum computers break Bitcoin? Let\u2019s find out.<\/p>\n

Quantum computing and the threat to Bitcoin<\/h3>\n

Bitcoin utilizes the SHA-256 hashing algorithm<\/a>, a National Security Agency (NSA)-developed encryption algorithm. SHA-256 prevents brute force<\/a> attacks against the Bitcoin network, as decrypting it with current hardware can take decades. However, the emerging threat to SHA-256 is quantum computing<\/a>, a method of computing that harnesses quantum physics and is much faster than traditional computing.<\/p>\n

At a fundamental level, quantum computing utilizes quantum bits (qubits), which can exist in multiple states. This contradicts binary (traditional) computing, which uses binary bits (1s and 0s). In 1994, mathematician Peter Shor presented an algorithm for quantum computers to solve complex algorithms in seconds, rather than the decades it can take for conventional hardware. At the time, no hardware could effectively run it, but recent advances like Google Willow<\/a> are nearing that capability.<\/p>\n

Quantum computing, when paired with Shor\u2019s algorithm, can disrupt Bitcoin cryptographic systems as we know them. Shor\u2019s algorithm allows quantum computers to solve complex math super fast, potentially threatening Bitcoin\u2019s safety.<\/p>\n

Did you know? <\/strong>If quantum tech gets strong enough, Bitcoin\u2019s current security could become obsolete, so developers are racing to create \u201cquantum-proof\u201d shields using new math that even Shor\u2019s algorithm can\u2019t break.<\/em><\/p>\n

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Quantum threat to Bitcoin: How real is the danger? <\/h2>\n

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Bitcoin is vulnerable to quantum computing, but how serious is the risk?<\/em><\/p>\n

When you create a crypto wallet<\/a>, it generates two important things: a private key and a public key<\/a>. The private key is a secret code, like a password, that you must keep safe. The public key is created from your private key, and your wallet address (like a bank account number) is made from the public key.<\/p>\n

You share your wallet address with others so they can send you cryptocurrency, just like you share your email address for someone to contact you. However, you never share your private key. It\u2019s like the password to your email \u2014 only you need it to access and spend the money in your wallet.<\/p>\n

Your private key<\/a> is like a master password that controls your crypto wallet. From this private key, your wallet can create many public keys, and each public key generates a wallet address.\u00a0<\/p>\n

For example, if you use a hardware wallet<\/a>, it has one private key but can create unlimited public keys (wallet addresses). This means you can have different addresses for each cryptocurrency supported by the wallet or even multiple addresses for the same cryptocurrency, all managed by a single private key.<\/p>\n

While generating a public key from a private key is straightforward, figuring out a private key from a public key is extremely hard \u2014 almost impossible \u2014 which keeps your wallet secure. Every time you send cryptocurrency, your private key creates a special code called a signature. This signature proves you own the funds and want to send them. The system that uses your private key, public key and signature to secure transactions is called the Elliptic Curve Digital Signature Algorithm (ECDSA).<\/p>\n

It is believed that quantum computing could reverse the process and generate private keys out of public ones. It is feared that this could cause many Bitcoin holders (especially whales and Satoshi-era wallets<\/a>) to lose their funds.\u00a0<\/p>\n

Bitcoin address types and quantum risks<\/h3>\n

When you send Bitcoin, you use a specific address type to direct the payment. Each address type has unique features, affecting security, privacy and vulnerability to quantum computing attacks like Shor\u2019s algorithm.<\/p>\n

P2PK address types<\/h3>\n

When you pay someone with Bitcoin, the transaction is typically considered a \u201cpay-to-public-key\u201d (P2PK). This was the most common payment method in 2009, according to a report<\/a> from consulting firm Deloitte.\u00a0<\/p>\n

Much of the original Bitcoin released at the network\u2019s launch is held in wallets with the P2PK address type, primarily due to the fact that they\u2019ve sent transactions since Bitcoin\u2019s 2009 launch. These addresses are long (up to 130 characters), making them less user-friendly.<\/p>\n

Wallets with the P2PK address type are most susceptible to Shor\u2019s algorithm, as it can brute force the private key from a P2PK wallet address<\/a>.\u00a0<\/p>\n

P2PKH address types<\/h3>\n

There\u2019s a second address type that\u2019s more resistant to Shor\u2019s algorithm: the pay-to-public-key-hash (P2PKH). P2PKH addresses are shorter and are generated from the hash (a unique, hexadecimal value) of a public key created using SHA-256 and RIPEMD-160 algorithms instead of displaying the full key itself.<\/p>\n

These addresses are shorter (33-34 characters), start with \u201c1,\u201d and are encoded in Base58 format. Such addresses are widely used and include a checksum to prevent typos<\/a>, making them more reliable.<\/p>\n

P2PKH addresses are more resistant to Shor\u2019s algorithm than P2PK because the public key is hashed. The public key is only revealed when you spend from the address (not when receiving). If a P2PKH address never sends Bitcoin, its public key stays hidden, offering better protection against quantum attacks.\u00a0<\/p>\n

However, reusing a P2PKH address (sending from it multiple times) exposes the public key, increasing vulnerability. Also, when you spend from a P2PKH address, the public key becomes visible on the blockchain, making transactions trackable.<\/p>\n

\"The<\/p>\n

Taproot addresses<\/h3>\n

Taproot is the newest address type<\/a>, introduced in November 2021 via the Taproot soft fork. It uses Schnorr signatures instead of the ECDSA signatures used by P2PK and P2PKH. These addresses start with \u201cbc1p,\u201d use Bech32m encoding, and are 62 characters long.<\/p>\n

They offer better privacy. Multisignature (multisig) transactions look like single-signature ones, hiding complex spending conditions. However, Taproot addresses expose the public key (or a tweaked version), making them vulnerable to Shor\u2019s algorithm, similar to P2PK.\u00a0<\/p>\n

Did you know?<\/strong> Google\u2019s \u201cWillow\u201d computer chip<\/a> is capable of solving a complex problem in just five minutes. The same task would take a classical supercomputer 10 septillion (!) years.<\/em><\/p>\n<\/p><\/div>\n

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The race toward quantum-proofing Bitcoin <\/h2>\n

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Quantum resistance is a real challenge, but not an impossible one.<\/em><\/p>\n

Quantum computers, still in early development, could one day use Shor\u2019s algorithm to break Bitcoin\u2019s cryptography by deriving private keys from public keys. This would threaten Bitcoin and other systems using SHA-256 or ECDSA (the algorithms securing Bitcoin transactions). However, this threat is not imminent, and solutions are already in progress.<\/p>\n

While some believe that Project 11 presented the Q-Day Prize to take down Bitcoin, the company claims this initiative is aimed at \u201cquantum-proofing\u201d the network.<\/p>\n

In July 2022, the US Department of Commerce\u2019s National Institute of Standards and Technology (NIST) announced<\/a> four quantum-resistant cryptographic algorithms resulting from a six-year challenge to develop such solutions.<\/p>\n

\"NIST<\/p>\n

Quantum computing won\u2019t develop in isolation, and centralized systems like government and financial networks could be bigger targets than Bitcoin\u2019s decentralized blockchain. These systems use outdated cryptography, like RSA, vulnerable to Shor\u2019s algorithm, and store sensitive data (e.g., banking records). Their single points of failure make breaches easier than attacking Bitcoin\u2019s distributed nodes.\u00a0<\/p>\n

The International Monetary Fund warns<\/a> quantum computers could disrupt mobile banking, while Dr. Michele Mosca from the Institute for Quantum Computing highlights<\/a> \u201charvest-now, decrypt-later\u201d risks for centralized data (where attackers store encrypted data today to decrypt with future quantum computers). In 2024, the G7 Cyber Expert Group urged financial institutions to assess<\/a> quantum risks, noting that centralized systems\u2019 data could be exposed if intercepted now and decrypted later.<\/p>\n

Did you know?<\/strong> Many blockchain networks are exploring quantum-resistant algorithms, such as Quantum Resistant Ledger or Algorand. These quantum computing blockchain security methods present a few different approaches.<\/em><\/p>\n<\/p><\/div>\n

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How to increase your security against quantum threats <\/h2>\n

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While the quantum computing cryptocurrency risk is less of a threat than one might think, it\u2019s still best to stay prepared.<\/em><\/p>\n

Still, if you\u2019re worried about Bitcoin quantum vulnerability<\/a>, there are a few precautions you can take to secure your crypto finances.<\/p>\n