Crypto firms prepare defenses against quantum encryption risk

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Crypto defenses vs quantum risk

Highlights

Google research now expects quantum computers capable of breaking blockchain cryptography by 2029, accelerating sector urgency for quantum-resistant upgrades.
Estimates including an unpublished June 2026 paper suggest 35–50% of a token's circulating supply could be exposed to quantum attack, risking major price shocks and market contagion.
None of the top 20 blockchains have implemented post-quantum signature algorithms, with Ethereum targeting full quantum protection by 2029 and Algorand planning post-quantum accounts this year.

Quantum timeline sharpens industry response

As reported by Reuters, concern across the crypto sector is intensifying after March research from Alphabet's Google suggested quantum computers may be able to break the cryptography used in blockchain systems sooner than previously expected. Google has said machines capable of breaking encryption could arrive by 2029, compared with earlier expectations that the timeline was at least a decade away.

Recent research from Citigroup and others also concludes that quantum computing, alongside advances in artificial intelligence, is shortening the period before cryptocurrencies become widely vulnerable to hackers. U.S. President Donald Trump last month issued executive orders intended to strengthen U.S. quantum capabilities, underscoring how the issue is moving beyond theory and into strategic planning.

Most blockchains rely on elliptic-curve cryptography to generate public and private keys and the digital signatures that verify ownership and authorize transfers. If a sufficiently powerful quantum computer can derive a private key from a public key, attackers could forge signatures and execute fraudulent transactions, a particularly serious risk in public crypto networks where payments are irreversible.

Costly upgrades and market exposure

Preparations are already beginning, but executives and analysts say the transition to quantum-resistant cryptography is likely to be complex, expensive and slow. One senior cybersecurity executive at a major crypto company expects it will take two years for his firm to become fully quantum-resistant, describing the task as similar in scale to a Y2K-style overhaul that once drove more than $300 billion in global spending.

Research cited in the article suggests the financial exposure could be substantial. An unpublished June 2026 working paper by independent researcher Ahmed Raza Muhammad Umer estimates that roughly 35% of a token's circulating supply could be exposed to a quantum computing attack, while other research from last year puts the figure as high as 50%. Moody's Ratings vice president of digital assets Cristiano Ventricelli says a single major theft and selloff could sharply hit token prices and spread losses across the market.

At the same time, some industry figures warn that adopting new protections too quickly may create new weaknesses because post-quantum cryptography is still evolving. Larger digital signatures could raise storage and bandwidth needs, increase costs and worsen user experience, especially on blockchains with fixed block-size limits such as bitcoin.

That leaves decentralized networks with a governance challenge as well as a technical one. None of the top 20 blockchains has implemented a post-quantum signature algorithm, executives say, while bitcoin participants remain divided over which fix to adopt and when. The Ethereum Foundation has said it aims for full protection from quantum computing by 2029, and the Algorand Foundation last month published a post-quantum roadmap and plans to start supporting post-quantum accounts later this year.

In our earlier article on Quantum Computing Inc. (QUBT) stock, we noted that the shares were under heavy selling pressure despite growing investor interest in pure-play quantum names. The piece highlighted bearish technical signals and suggested the near-term outlook was likely sideways-to-lower unless key resistance levels were reclaimed.

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