Coinbase Paper Outlines Bitcoin Post-Quantum Security Plan - Blockonomi Coinbase Paper Outlines Bitcoin Post-Quantum Security Plan
by Maisie Morrison · BlockonomiTLDR
Table of Contents
- Coinbase published a technical paper on October 13 urging Bitcoin developers to start preparing for future quantum computing threats.
- The exchange holds about 5% of all Bitcoin in custody and is already preparing its own systems.
- Coinbase pointed to BIP-360 and P2TRv2 as flexible designs for adding quantum-resistant signatures.
- It suggested hybrid wallets that support both current and post-quantum signatures.
- The company said debate over lost and dormant Bitcoin should happen separately from technical work.
Coinbase has called on Bitcoin developers to begin preparing for possible quantum computing threats. In a technical paper published on October 13, the exchange said upgrading Bitcoin’s security could take several years.
The company holds about 5% of all existing Bitcoin in custody. It said it is already preparing its own systems for a post-quantum future.
Its work includes talks with Bitcoin researchers, contributions to open-source projects and membership in the Bitcoin Security Consortium.
“We believe it is important to begin preparing well ahead of any CRQC (Cryptographically Relevant Quantum Computer) announcement,” Coinbase said. “Bitcoin consensus changes and ecosystem migrations can take years, so it is important that we begin this work now.”
Why Bitcoin Faces a Quantum Risk
Bitcoin uses elliptic-curve cryptography, including ECDSA and Schnorr signatures, to approve transactions. A powerful enough quantum computer could, in theory, figure out private keys from exposed public keys.
Coinbase did not claim such a machine exists today. It described the threat as a future possibility that requires early planning.
The company said the fix involves more than picking a new signature algorithm. Developers must weigh transaction fees, block space, wallet support and the ability of nodes to verify transactions on their own.
Coinbase Backs Flexible Designs and Hybrid Wallets
Coinbase pointed to BIP-360 and P2TRv2 as designs worth considering. Both separate the transaction structure from the signature scheme, so new algorithms could be added or replaced later.
BIP-360 introduces Pay-to-Merkle-Root, or P2MR. It removes Taproot’s key-path spending option, which exposes a public key. The proposal is still in draft status.
The exchange recommended studying post-quantum algorithms such as ML-DSA, SLH-DSA and FN-DSA once standards are ready. It also named SHRINCS, a compact hash-based design, as a candidate for review.
For the migration, Coinbase described a 1-of-2 hybrid wallet. Funds could be spent with either a current ECDSA or Schnorr key or a separate post-quantum key.
Coinbase also said new systems should work with multiparty computation, or MPC, which large custodians use to protect keys. It warned that stateful signature schemes carry forgery risks if signing records are mishandled, and asked for a stateless option.
Old and lost coins remain an open question. These include dormant wallets, lost keys and Bitcoin from the network’s earliest years.
A separate proposal, BIP-361, suggests gradually restricting older signatures after a post-quantum option becomes available. It remains a draft and has not been activated.
Coinbase said disputes over inaccessible funds should be debated in parallel and should not hold up protections for active wallets.
The paper did not set a migration deadline, endorse a final algorithm or propose an activation date. Coinbase said its next steps will continue through talks with researchers, developers and open-source contributors.