A new report commissioned by Coinbase sounds a cautious but urgent alarm: Quantum computing won’t destroy cryptocurrencies tomorrow, but the industry can’t afford to wait.
The 50-page paper, written by an independent advisory board that includes prominent cryptographers and academics such as Dan Boneh of Stanford University, Justin Drake of the Ethereum Foundation, and Sreeram Kannan of Eigen Labs, concludes that while current blockchains remain secure, a future “fault-tolerant quantum computer” capable of breaking widely used encryption is increasingly plausible, and preparation must begin now.
In recent months, concerns around quantum risk have become increasingly common. Google researchers have published estimates suggesting that a sufficiently advanced quantum computer could one day break Bitcoin’s cryptography.
Major crypto ecosystems have already started planning their responses. The Ethereum Foundation has proposed new types of digital signatures designed to be secure against quantum computers, while Solana and others are experimenting with quantum-resistant wallet designs.
The report emphasizes that current quantum machines are far from being powerful enough to crack the cryptography that underpins Bitcoin, Ethereum and other networks. Breaking standard encryption would require a large computational overhead, a milestone that is still considered a major engineering challenge.
Still, the authors warn against complacency.
“We are very confident that a large-scale, fault-tolerant quantum computer will eventually be built,” the report states, adding that the timeline is uncertain but “clearly on the horizon.”
That uncertainty is exactly the problem, with estimates ranging from “a few years to a decade or more” and no reliable way to predict progress.
The urgency is reflected in guidance from the US National Institute of Standards and Technology (NIST), which recommends migrating to quantum-resistant cryptography by 2035, a timeline the report says could even prove optimistic.
“Waiting for urgency is not a good idea,” the Coinbase document says, emphasizing that transitions between blockchains, wallets, and exchanges could take years to execute securely.
Some assets may be more vulnerable than others. For example, Bitcoin wallets that have already revealed their public keys could be targeted, while those that are still protected behind hash functions may be safer in the short term.
The good news: Quantum-resistant cryptography (PQC) already exists and is being standardized by NIST.
The bad news: It’s not an easy trade.
Post-quantum digital signatures can be tens to hundreds of times larger than today’s signatures, which could dramatically increase blockchain data costs and reduce performance. One estimate in the report suggests that replacing current signatures with quantum-proof alternatives could expand block sizes by up to 38 times.
There are also usability challenges, from migrating millions of wallets to deciding what to do with “lost” or idle funds that are never updated.
Instead of a one-size-fits-all solution, the report outlines multiple transition strategies, including hybrid systems that combine existing cryptography with post-quantum upgrades or allow for gradual change when necessary.
For now, the authors recommend flexible approaches that avoid sacrificing current security or performance while still allowing for rapid upgrading later.
“Now is the time to start preparing,” the report concludes.
Read more: Solana’s preparation for quantum threats reveals a tough balance: security versus speed
