Some cryptocurrency investors worry about data security in the future. Bitcoin (BTC +0.05%) owners often tout the largest coin's unchanging qualities as a major selling point. But if Bitcoin's technical platform never changes, how can it meet unexpected challenges and adapt to new security threats? In particular, won't Bitcoin's encryption soon crumble under an assault from quantum computing systems?
So there's something you should know before you write off Bitcoin entirely, or dive into it head first. Bitcoin can have the system stability cake and eat incoming threats too.
Bitcoin is indeed changing over time, and should be safe from quantum computing attacks in the long run. It's just very unlikely to make sudden turns into dangerous or economically unsound moves, such as changing its inflation-proof coin-minting process.
The imagined threat
Quantum computers should eventually disrupt many industries. A powerful system of this type is perfect for finding patterns in seemingly random data. They will crack the genetic code of genetic diseases, provide the most accurate weather forecasts ever, and bring clarity to the chaos of financial markets.
And of course, they will be able to crack the encryption algorithms at the heart of Bitcoin and other cryptocurrencies.
If and when that happens, that must be the end of Bitcoin as you know it. Scoundrels and miscreants will be able to change, delete, or insert data into Bitcoin's blockchain ledger, moving billion-dollar fortunes with the click of a quantum-powered mouse.
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The "feature" that surely leaves the data security door open
This wouldn't be such a scary situation if Bitcoin's technology wasn't so unchangeable. You often hear crypto bulls touting the firm cap of 21 million Bitcoins as an immovable guard against inflation. Once the last fraction of the 21-millionth digital coin has been minted, there simply won't be any more production. With 19.83 million Bitcoin already created, that's 94.4% of all Bitcoin that ever will exist.
So Bitcoin isn't changing. When the bad actors finally get their hands on game-changing quantum computers, Bitcoin's data security must fall.
The end.
How Bitcoin's updates actually work
Hold your horses, dear investor.
The computing platform behind Bitcoin can indeed change over time. The Bitcoin Core software that manages the blockchain ledger and the Bitcoin mining procedure is up to version 28.1 these days. The latest update fixed a few bugs and added some developer-friendly features. It was released on October 2, 2024, to be followed by a more substantial "major version" in the spring of 2025.
These changes could indeed involve very important features and software bits, including the limit of 21 million coins and the encryptions methods in use.
And there are already encryption methods that are hard to crack with quantum computing systems. The National Institute of Standards and Technology (NIST) announced the first federal standards for quantum-hardened encryption in 2022. Development efforts toward this goal started in 2016. IBM (IBM 2.72%) included these quantum-resistant algorithms in the z16 mainframe systems the same year, and will make these encryption solutions mandatory over time. Microsoft (MSFT 0.59%) is quietly rolling out data security with quantum-safe algorithms, too.
There's absolutely no reason to believe that the Bitcoin developer community will let the whole system run into quantum-based hacking issues. Long before quantum computers grow powerful enough to pose a real threat, the old-school SHA-256 hash function will be replaced by a quantum-safe alternative.
The key thing to remember is that updates only happen with a proper majority approval. More than half of the systems running the Bitcoin blockchain need to install the new version in order to achieve consensus on approving each transaction on the public ledger. A so-called 51% attack is possible, but only if you control more than half of the world's Bitcoin mining power -- a tall order even for trillion-dollar tech giants or governments. And before that, every software update goes through a meticulous process of planning, development, testing, and installation.
And it would not be in the community's best interest to adopt software versions with unwanted features. The 21-million coin cap is safe, because upping that limit would immediately lower the value of the Bitcoin holdings and mining systems that made it possible to change that particular number.
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Bitcoin owners shouldn't worry about quantum hackers
So Bitcoin developers have the freedom to tackle technical challenges, including the future threat of hackers with quantum computers. The system is also sophisticated enough to resist unwanted software changes. No project, system, or organization is ever 100% safe against every threat, and that's only more true in the unfamiliar cryptocurrency market. Bitcoin investors shouldn't lose sleep over this particular issue, though.
Quantum computers won't break the Bitcoin platform any time soon, and they're still many years away from posing a serious threat. That's more than enough time to dodge the entire problem with the appropriate software tweaks.
