The Quantum Existential Threat to Crypto
In The Second Sleep, Robert Harris imagines a distant future where civilisation has slipped back into something resembling the Middle Ages. The cause is not plague or nuclear war but a total collapse of the digital economy. No payments, no supply chains, no functioning systems. Once the code goes dark, society follows.
It sounds extreme, yet the modern world rests almost entirely on digital instruction. From banking and logistics to energy grids and manufacturing, everything depends on systems that must work all the time. When they fail, even briefly, the consequences are immediate. Last year, a cyber breach shut down Jaguar Land Rover for weeks. Scale that up and the scenario stops feeling like fiction.
Nowhere is this fragility more apparent than in crypto. Bitcoin and its imitators are entirely dependent on encryption to assign ownership and preserve value. The community has long argued that this encryption is effectively unbreakable. That assumption is starting to look shaky.
The debate has resurfaced forcefully following warnings from Christopher Wood, head of equity strategy at Jefferies, who argues that quantum computing could collapse the asymmetric logic on which Bitcoin security relies. Deriving a public key from a private one is easy. The reverse is meant to take trillions of years. Quantum machines could reduce that to days.
The launch of Microsoft’s Majorana One quantum chip has sharpened those fears, bringing forward the notional arrival of “Q Day”, the point at which quantum computers can crack today’s public key encryption. A report from Chaincode Labs estimates that up to half of all Bitcoin in circulation could be vulnerable, particularly older wallets and reused addresses dating back to the network’s earliest years.
Bitcoin is often described as digital gold. A more accurate label might be speculative faith. Its value depends on a continually expanding pool of belief and demand. Once confidence falters, the store of value narrative weakens fast. The quantum threat, whether imminent or not, is already undermining efforts to legitimise crypto as a mainstream asset class, including those championed by Donald Trump.
Even traditional finance is uneasy. BlackRock flagged quantum computing as a material risk when launching its Bitcoin ETF. El Salvador, the first country to adopt Bitcoin as legal tender, now spreads its holdings across multiple addresses as a hedge against theft. Christopher Wood himself has exited Bitcoin entirely, reallocating to physical gold and gold miners.
You do not need quantum computers to see the flaws. Crypto is already one of the least secure forms of money in circulation. North Korean hackers stole $1.5 billion from the Bybit exchange last year. Total crypto thefts reached an estimated $3.5 billion. Social media bravado has led to extortion and kidnapping. Once funds are stolen, recovery is almost impossible by design.
Some in the crypto world have proposed burning vulnerable coins to protect the system. That solution would destroy trust overnight. Cancelling private property to save an asset is not monetary innovation, it is repudiation.
Quantum computing threatens more than crypto. Fiat money is digital too. But unlike Bitcoin, it is backed by taxpayers and central banks with the power to adapt systems, absorb losses and enforce law. There is no compelling answer to the quantum problem yet, and until there is, crypto’s core promises look fragile.
Gold has surged while Bitcoin has stalled. The decoupling is telling. Digital gold it is not. Despite political cheerleading, crypto has failed to earn lasting institutional credibility. The reinvention of money it promised has not arrived. What remains is volatility, ideology and a growing sense that the code holding it together may not be as unbreakable as advertised.
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