Bitcoin: A Major Advancement Could Simplify the Transition to the Post-Quantum Era

Researchers in post-quantum cryptography unveiled on July 29 a zero-knowledge proof system capable of protecting Bitcoin wallets without altering existing addresses. Signed by AmericanFortress, this advancement comes as the threat of Q-Day looms closer. Is this a viable solution for the ecosystem?

In Brief

• The ZKPoSP system replaces ECDSA signatures with ZK proofs that verify possession of the seed phrase without revealing it
• Generating a proof takes 12 to 13 seconds, while verification takes less than 10 milliseconds
• The Bitcoin Security Consortium, which includes BlackRock, Coinbase, and Strategy, has committed $15 million over three years

A Shield Based on Zero-Knowledge Proofs

Since Google's Willow processor has brought the horizon of Q-Day closer, the race to protect blockchains has intensified. The challenge is immense: migrating millions of Bitcoin addresses to post-quantum formats resembles a logistical puzzle. AmericanFortress, a cybersecurity company based in Wyoming, has designed a different approach to circumvent this difficulty.

Presented in a Decrypt article titled "ZKPoSP: Post-Quantum Zero-Knowledge Proofs for Hierarchical Deterministic Wallets", the researchers' proposal tackles the heart of the problem.

Rather than requiring a massive migration of funds, the ZKPoSP system replaces traditional digital signatures with zero-knowledge proofs. These proofs verify that the owner indeed holds the wallet's seed phrase without ever exposing this sensitive information.

"Recent advancements in quantum hardware, notably Google's Willow processor, have significantly reduced the timeline before relevant quantum computers arrive", the authors write.

In the blockchain universe, where BIP32, BIP44, and SLIP-10 standards dominate wallet management, a quantum computer running Shor's algorithm can recover any ECDSA private key from the corresponding public key.

The complementary QBIP32 protocol, also detailed in the study, supports multiple elliptic curves while remaining compatible with existing HD wallets. Implemented in Rust via the zero-knowledge virtual machine RISC Zero, the system generated proofs in 12 to 13 seconds for verification in 9 to 10 milliseconds. A "post-Q-Day" mode further reduces this time for certain operations.

Six Million Bitcoins Already Vulnerable on the Chain

The vulnerability of Bitcoin to quantum computing is anything but a theoretical hypothesis. Last May, the analytics platform Glassnode estimated that around 6.04 million bitcoins, nearly 30% of the circulating supply, already have their public keys exposed on the blockchain. Each transaction that spends bitcoins indeed makes the public key visible, providing an attack surface for a future quantum computer.

This realization has prompted industry heavyweights to take action. Last week, BlackRock, Coinbase, Strategy, Fidelity Digital Assets, and Galaxy officially announced the Bitcoin Security Consortium, endowed with $15 million over three years. Their mission: to fund research on Bitcoin's security against quantum attacks. The U.S. Department of Commerce also announced over $2 billion in grants for quantum computing companies.

No blockchain network has yet adopted AmericanFortress's paper. Any deployment would require the buy-in from developers, wallet providers, exchanges, and miners.

The Race for Post-Quantum Solutions Accelerates

The race for post-quantum shielding is not limited to AmericanFortress. Earlier this month, Project Eleven proposed a recovery mechanism that would allow holders to prove ownership of a wallet via the seed phrase rather than through a traditional digital signature after Q-Day.

In March, BTQ Technologies deployed the first functional implementation of BIP-360 on a testnet called "Bitcoin Quantum", aimed at evaluating transaction formats resistant to quantum attacks. These initiatives, combined with the formation of the consortium, outline an ecosystem that takes the threat seriously.

In the blockchain universe, a quantum computer running Shor's algorithm can recover any ECDSA private key from the corresponding public key, threatening all wallets in production today.

Researchers emphasize a central point: with the seed phrase remaining secret, legitimate owners could continue to prove control over their funds even if individual private keys were compromised.

In summary, AmericanFortress's proposal adds a promising piece to the puzzle of post-quantum security. The Bitcoin ecosystem now has several avenues, from ZKPoSP to BIP-360 to seed recovery mechanisms, converging towards a common goal. The challenge remains to transform these lab prototypes into industry-adopted standards.