This week, the debate around quantum computing and Bitcoin has reignited within the crypto sphere, with renewed speculation over whether the network behind the leading digital asset could eventually face vulnerabilities. The discussion was triggered by a new study posted on arxiv.org detailing a method for factoring 2048-bit RSA integers using fewer than a million imperfect qubits.
Adding fuel to the fire, financial heavyweight Blackrock—manager of the largest spot bitcoin ( BTC) exchange-traded fund—revised its IBIT prospectus to include a cautionary note on quantum computing. The IBIT prospectus, as mandated by law, must disclose potential risks tied to investing in bitcoin. It outlines, for example, the asset’s pronounced price volatility and describes scenarios in which a 51% attack might unfold. Notably, all of these disclosures were already present prior to May.
The newest addition to IBIT’s prospectus introduces a cautionary note: “In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.” The document then elaborates, warning that advancements in quantum computing could compromise the cryptographic foundation underpinning Bitcoin.
“The cryptography underlying Bitcoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry, and quantum computing, could result in such cryptography becoming ineffective,” Blackrock’s IBIT prospectus states.
The prospectus adds:
In any of these circumstances, a malicious actor may be able to compromise the security of the Bitcoin network or take the Trust’s bitcoin, which would adversely affect the value of the Shares.
Blackrock’s disclosure continues by suggesting that the Bitcoin network’s functionality could deteriorate to a point where it loses its appeal to users, potentially diminishing overall demand for bitcoin. “Even if another digital asset other than bitcoin were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares,” the prospectus notes.
With quantum computing progressing, the crypto community faces the pressing challenge of its potential to destabilize Bitcoin’s security infrastructure. Blackrock’s revised caution draws attention to the inherent vulnerability of cryptographic protocols amid swift technological shifts. Though the threat is still quite speculative, its recognition by major institutional actors marks a critical juncture—prompting the sector to balance forward-thinking innovation with the necessity of safeguarding Bitcoin’s durability in a fast-evolving digital epoch.
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