ARK Invest Warns Quantum Computing May Impact the Internet Before Bitcoin

How significant is the threat of quantum computing to Bitcoin? This risk is not unfounded but is closely related to how Bitcoin addresses are encrypted. Bitcoin's security is based on two main pillars: Elliptic Curve Cryptography (ECC) protecting private keys and the SHA-256 hashing algorithm ensuring the security of miners and transaction processes. If there were a sufficiently powerful quantum computer, it could theoretically derive private keys from exposed public keys, thereby attacking certain types of wallets and stealing funds.

According to the report, the amount of Bitcoin at risk is as follows: P2PK addresses are the oldest format on the Bitcoin network and are considered high-risk in the quantum threat model because they directly expose public keys. Among these, an estimated 1 million BTC belong to Bitcoin's pseudonymous founder, Satoshi Nakamoto. So, how powerful does a quantum computer need to be to truly crack Bitcoin? This involves the timeline. ARK's view is relatively cautious, not alarmist. Current quantum computers are in the so-called Noisy Intermediate-Scale Quantum (NISQ) era, running on about 100 logical qubits with shallow circuits. To crack Bitcoin's ECC, a machine would need approximately 2,330 logical qubits and tens of millions to billions of quantum gate operations. This gap is enormous.

The report's authors, Dhruv Bansal (Unchained), Tom Honzik (Unchained), and David Puell (ARK Invest), wrote: "Current quantum systems lack the capabilities needed to break Bitcoin." The report also noted that even if quantum systems eventually reach this level, any significant breakthrough would almost certainly affect broader internet security first. This means that banks, governments, and technology infrastructure will face pressure to respond before Bitcoin becomes a primary target, giving the network time to adapt. So, is this an immediate threat or a long-term risk? Quantum computing is a long-term structural risk, not an imminent crisis. The company outlined five stages of quantum computing progress. Bitcoin stored in vulnerable addresses will not face substantial risk until at least the third stage, when quantum computers can crack 256-bit ECC keys. Only in the fifth and final stage will quantum computers be able to crack ECC faster than Bitcoin's 10-minute block time. There will be warning signs before the crisis arrives. ARK expects this process to unfold gradually, with many intermediate signals along the way. This view contrasts with more alarmist perspectives. Earlier this year, Jefferies' portfolio strategist Christopher Wood advised investors to cut 10% of their Bitcoin investments and switch to gold, particularly due to quantum risk, which shook the market. ARK Invest's report argues that the Bitcoin community will have time to deploy quantum-resistant upgrades before any machine reaches the required capability threshold.