Analyst Warns: “The Biggest Threat to Bitcoin is on the Way, Developers are Asleep”

Nic Carter, general partner at Castle Island Ventures, issued a strong warning about Bitcoin’s security against quantum computers.

According to Carter, the Bitcoin community and developers are ignoring, rather than taking seriously, the growing quantum risk, which could threaten the integrity of the system in the long run. Carter argued that the superficial discussions circulating on X recently have simplified the issue, while the real risks have not been adequately understood.

Carter reminded that Bitcoin’s security relies on elliptic curve cryptography (ECC) and that, thanks to the Shor Algorithm developed in the 1990s, a sufficiently powerful quantum computer could theoretically break this structure. He noted that Satoshi Nakamoto was aware of this possibility and foresaw that the protocol could be updated if necessary, acknowledging that current quantum computers are still far from this capacity. However, according to him, the problem is not that it’s “impossible,” but simply that it’s an “extremely difficult” engineering problem. Carter argues that quantum technology, which he likens to the nuclear fission of 1939, could at some point make a sudden and unannounced leap.

Carter notes that 2025 is set to be the most active year yet for quantum computing, highlighting the critical role of advancements in error correction. He points to strong results from companies like Google and Quantinuum, with quantum startups raising approximately $6 billion in funding this year, and PsiQuantum securing $1 billion in investment with a goal of building a million-qubit machine. According to Metaculus data, the average expectation among experts is that a cryptographically meaningful quantum computer could emerge around 2033.

Carter also points out that NIST, the official standards agency of the US, has recommended the abandonment of quantum-enabled cryptographic systems by 2030 and their complete deactivation by 2035. He notes that the European Union and the United Kingdom are also working on similar timelines, stating that these dates represent a call for the Bitcoin community to “act today.”

Carter, stating that a potential “crypto-related quantum computer” (CRQC) could have serious consequences for Bitcoin, notes that approximately 6.7 million $BTC are currently held in addresses vulnerable to quantum attacks. He also argues that, theoretically, private keys could be intercepted even in the short time before transactions are included in blocks.

Carter acknowledges that Bitcoin could theoretically transition to post-quantum (PQ) signature systems, but argues that in practice it would be extremely complex and risky. He points out that issues such as larger data requirements, disagreements over which PQ scheme to choose, and the migration of millions of addresses could take years. Reminding us how difficult even relatively “simpler” updates like SegWit and Taproot were to implement, Carter says that a quantum-resistant transition would be far more painful.

One of the most controversial issues is lost or abandoned Bitcoins. According to Carter, approximately 1.7 million $BTC are held in old “pay-to-public-key” addresses belonging to Satoshi Nakamoto and early miners. If these coins cannot be moved, they risk being seized by a quantum attacker in the future. In this case, the community would either have to freeze these coins, which would mean an unprecedented “mass confiscation” in Bitcoin history, or accept that a potentially hostile party could become one of the world’s largest Bitcoin holders.

Carter argues that, for all these reasons, the preparation process for quantum risk could take at least a decade, and therefore waiting is not a luxury. According to the expert, the real destructive force might not be the quantum break itself, but the panic reaction that would result from being caught unprepared for such a scenario. He notes that potential fork wars and an environment of uncertainty could quickly drive away the large institutional capital that currently trusts Bitcoin.

*This is not investment advice.