Coinbase Wants Bitcoin to Prepare for Quantum Risks
Coinbase is calling for Bitcoin developers and ecosystem participants to begin preparing for the potential security risks posed by advanced quantum computers. In a post on Coinbase’s official blog, the exchange outlines technical priorities for making Bitcoin more resistant to future quantum attacks.
The issue matters to Coinbase because it holds bitcoin on behalf of clients, including financial institutions, asset managers and hedge funds. The supplied report estimates that Coinbase holds about 5% of all bitcoin in existence, although that figure should be understood in the context of assets held for customers rather than necessarily owned by the exchange itself.
Coinbase’s central argument is that preparation should start well before a quantum computer capable of breaking current cryptographic protections becomes available. The company also wants the technical work of upgrading Bitcoin’s security to remain separate from the contentious question of what should happen to coins that cannot be moved or whose owners have lost access.
How Bitcoin’s Signature System Works
Bitcoin transactions rely on digital signatures to prove that a person authorizing a transfer controls the necessary private key. A public key can be used to verify a signature, while the private key must remain secret. If the signature is valid, the network can verify that the transaction meets the relevant spending rules.
Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA) and Schnorr signatures for different transaction types. These systems are considered secure against attacks from today’s conventional computers, which cannot practically derive a private key from the corresponding public-key information using known methods.
A sufficiently capable quantum computer could change that security picture. Researchers use the term cryptographically relevant quantum computer (CRQC) for a machine powerful enough to break cryptographic systems that are currently considered secure. The timeline remains uncertain: the possibility of such a machine emerging in the coming years is a concern, not confirmation that the technology will be ready by a specific date.
Why Post-Quantum Cryptography Matters
Post-quantum cryptography refers to cryptographic methods designed to resist attacks from both conventional and quantum computers. For Bitcoin, adopting such methods would require more than simply selecting a new signature algorithm.
Coinbase argues that a workable upgrade must protect funds, fit within Bitcoin’s technical constraints, remain practical for everyday users and large custodians, and allow existing software and infrastructure to transition safely. The network’s decentralized governance and broad range of participants also mean that changes can take considerable time to evaluate, coordinate and deploy.
Coinbase summarized the timing challenge by stating, “Bitcoin consensus changes, and ecosystem migrations can take years.” The company says preparations should begin “well ahead of any CRQC announcement,” rather than waiting until a serious threat is imminent.
Coinbase’s Proposed Technical Priorities
1. Make transaction formats more flexible
Coinbase wants Bitcoin’s transaction structure to accommodate new post-quantum signature methods without requiring a complete redesign each time cryptographic technology changes. Separating the way a transaction is structured from the signature method used to authorize it could make future upgrades easier to implement.
The exchange points to P2MR, associated with BIP-360, and P2TRv2 as proposals that appear to offer this kind of flexibility. These are potential approaches under consideration, not evidence that Bitcoin has already adopted a complete quantum-resistant upgrade.
2. Introduce protection in stages
Coinbase supports allowing users to adopt quantum-resistant or hybrid signatures before the network finalizes every rule governing older signature types. One possible approach would use a “1-of-2” arrangement, in which spending could be authorized by either a traditional ECDSA or Schnorr key, or a post-quantum key.
Such a transition could allow users to begin protecting funds without requiring the entire ecosystem to migrate simultaneously. However, the design would need careful implementation and agreement on Bitcoin’s consensus rules before it could become a network-wide solution.
3. Evaluate stateful and stateless signatures
Some post-quantum signature schemes are stateful: wallets must keep track of signing information, including which one-time keys have already been used. Reusing a key incorrectly or restoring an outdated backup without the necessary records can create serious security weaknesses, potentially allowing forged signatures.
Stateful schemes may offer advantages such as smaller signatures or faster operation, but their reliance on accurate record-keeping can introduce risks for wallet users. Coinbase therefore argues that Bitcoin should also consider stateless alternatives, which do not require wallets to maintain the same kind of signing-state record.
4. Prioritize reliable implementations
Quantum-resistant cryptography must be implemented correctly to provide meaningful protection. Coinbase wants the evaluation process to place strong emphasis on consistent signature verification across platforms, safe handling of secret information, clear configuration options and resilience when random-number generation fails.
These engineering requirements matter because a theoretically secure algorithm can still expose users to theft if wallet software contains implementation flaws or handles sensitive data incorrectly.
5. Support multi-party computation
Coinbase also highlights compatibility with multi-party computation (MPC). MPC techniques can distribute key-related operations across multiple participants or systems, reducing reliance on a single device or individual to protect a signing key.
This capability is particularly relevant to exchanges, custodians and other organizations managing large amounts of bitcoin. Coinbase wants post-quantum methods to work with these security arrangements so institutional users can upgrade without losing important protections in their existing custody systems.
Older Wallets and Lost Bitcoin Need a Separate Debate
A further challenge concerns bitcoin that remains in older wallet formats or cannot be moved because owners have lost their keys. If Bitcoin eventually restricts or ends spending with ECDSA and Schnorr signatures, some holders may not migrate their funds before any transition deadline or restriction takes effect.
Coinbase says the ecosystem should consider whether there should be a way for late-moving wallets to transfer funds into quantum-resistant outputs. The exchange acknowledges that the approach and its trade-offs remain open questions.
Lost or dormant coins raise an additional issue. Some may belong to people who no longer have access to their keys, while some older address types may expose public-key information that could become more vulnerable under a sufficiently powerful quantum attack. If attackers gain the ability to derive private keys from exposed public keys, those funds could be at risk.
Coinbase has not endorsed a specific policy for these coins. Instead, it argues that the debate should proceed separately from the core technical work of adding post-quantum protection. Any proposed recovery mechanism would also need to be quantum-safe; otherwise, the process intended to protect or recover funds could itself create an opportunity for theft.
What Happens Next for Bitcoin Security?
Coinbase’s proposals outline priorities for research and coordination rather than a finalized Bitcoin upgrade. Implementing quantum-resistant signatures would require technical review, agreement among relevant participants and a carefully managed migration process.
The immediate objective is to give developers and users time to assess potential solutions before quantum computing poses a practical threat to Bitcoin’s cryptography. The separate question of what to do with inaccessible or vulnerable older coins remains unresolved.
For now, the quantum threat is a future risk rather than proof that Bitcoin wallets can already be cracked this way. Coinbase’s message is that preparing early could give the network more options and reduce the pressure of attempting a major security transition after the threat becomes urgent.
