Crypto News
How Should Bitcoiners View Quantum Computing?

In the early 2020s, quantum computing hit the public spotlight as a potential threat to Bitcoin. Relying on SHA-256 cryptographic hash function for its proof-of-work network consensus, Bitcoin’s value is predicated on computational power.
If there is a technology that can circumvent the traditional binary system of 0s and 1s for units of information, there is potential to upend cryptography as we know it. But is that danger over exaggerated?
Could quantum computing one day turn Bitcoin into a valueless piece of code? Let’s start by understanding why Bitcoin relies on cryptography.
Bitcoin’s Bits and Hashing
When we say that an image is 1 MB in size, we say that it contains 1,000,000 Bytes. As each Byte contains 8 bits, this means that an image contains 8,388,608 bits. As the binary digit (bit), this is the tiniest unit of information, either 0 or 1, that builds up the entire edifice of our digital age.
In the case of an image, bits in a 1MB file would assign a color to each pixel, making it readable to the human eye. In the case of a cryptographic function like SHA-256 (Secure Hash Algorithm 256-bit), developed by the NSA, it would produce 256 bits (32 Bytes) as the fixed length of a hash from an input of arbitrary size.
The primary purpose of a hash function is to convert any string of letters or numbers into an output of fixed length. This obfuscation blending makes it ideal for compact storage and anonymized signatures. And because the hashing process is a one-way street, hashed data is effectively irreversible.
Therefore, when we say that SHA-256 provides a 256-bit security, we mean to say that there are 2256 possible hashes to consider for reversal. When Bitcoin payments are conducted, each Bitcoin block has its own unique transaction hash generated by SHA-256. Each transaction within the block contributes to this unique hash as they form the Merkle root, plus the timestamp, nonce value and other metadata.
A would-be blockchain attacker would have to recalculate hashes and extract the necessary data not only for that block containing the transactions, but for all subsequent blocks chained to it. Suffice to say, the 2256 possibility load poses a virtually impractical computational endeavor, requiring immense expenditure of energy and time, both of which are exceedingly costly.
But could this no longer be the case with quantum computing?
New Quantum Paradigm for Computing
Moving away from bits as 0s and 1s, quantum computing introduces qubits. Leveraging the observed property of superposition, these units of information can not only be either 0 or 1 but both simultaneously. In other words, we are moving away from deterministic computing to indeterministic computing.
Because qubits can exist in an entangled and superimposed state, until observed, computations become probabilistic. And because there are more states than always 0 or 1, a quantum computer has the ability for parallel computing as it can simultaneously process 2n states.
A classic binary computer would have to run a function for each possible 2n state, which the quantum computer could assess simultaneously. In 1994, mathematician Peter Shor developed an algorithm with this in mind.
Shor’s algorithm combines Quantum Fourier Transform (QFT) and Quantum Phase Estimation (QPE) techniques to speedup pattern-finding and theoretically break all cryptography systems, not just Bitcoin.
However, there is one huge problem. If quantum computing is probabilistic, how reliable is it?
Stabilizing Coherence in Quantum Computing
When it is said that qubits are superimposed, this is akin to visualizing a coin flip. While in the air, one can imagine the coin having both states – heads or tails. But once it lands, the state is resolved into one outcome.
Equally so, when qubits are resolved, their state collapses into the classical state. The problem is that a ground-breaking algorithm like Shor’s needs many qubits to maintain their superposition for a long period of time to interact with each other. Otherwise, the necessary, useful calculations fail to actually complete.
In quantum computing, this refers to quantum decoherence (QD) and quantum error correction (QEC). Moreover, these problems need to be solved across many qubits for complex calculations.
According to the Millisecond Coherence in a Superconducting Qubit paper published in June 2023, the longest coherence time of a qubit is 1.48 ms at average gate fidelity of 99.991%. The latter percentage refers to the overall reliability of a QPU (quantum processing unit).
At present, the most usable and powerful quantum computer appears to be from IBM, dubbed Quantum System Two. A modular system ready for scaling, Quantum System Two should perform 5,000 operations with three Heron QPUs in a single circuit by the end of 2024. By the end of 2033, this should increase to 100 million operations.
The question is, would this be enough to materialize Shar’s algorithm and break Bitcoin?
QC Threat Viability
Due to decoherence problems and fault-tolerance, quantum computers have yet to pose a serious risk to cryptography. It is unclear if it is even possible to achieve a fault-tolerant quantum system at scale when such a high level of environmental purity is needed.
This includes electron-phonon scattering, photon emissions and even electron to electron interactivity. Moreover, the greater the number of qubits, which are necessary for Shor’s algorithm, the greater the decoherence.
Yet, although these may appear to be intractable problems inherent with quantum computing, there has been great progress in QEC methods. Case in point, Riverlane’s Deltaflow 2 method performs real-time QEC on up to 250 qubits. By 2026, this method should result in the first viable quantum application with million real-time quantum operations (MegaQuOp).
To break SHA-256 within one day, 13 million qubits would be needed, according to the AVS Quantum Science article published in January 2022. Although this would threaten Bitcoin wallets, many more qubits, at around 1 billion, would be needed to actually execute a 51% attack on Bitcoin mainnet.
When it comes to implementing the Grover algorithm, designed to leverage QC to search unstructured databases (unique hashes), a research paper published in 2018 suggested that no quantum computer would be able to implement it until 2028.
Image credit: Ledger Journal
Of course, Bitcoin network’s hashrate has greatly increased since then, and QC has to tackle decoherence as a major obstacle. But if QEC roadmaps eventually materialize into reliable quantum systems, what can be done to counteract the QC threat to Bitcoin?
Quantum Computing Resistance
There are multiple proposals to safeguard Bitcoin holders from quantum computers. Because a 51% QC attack is extremely improbable, the focus is mainly on hardening wallets. After all, if people cannot rely on their BTC holdings to be secure, this would cause an exodus from Bitcoin.
In turn, BTC price would plummet and the network’s hashrate would drastically decrease, making it far more vulnerable to QC than previously estimated. One such hardening is implementing Lamport signatures.
With Lamport signatures, a private key would be generated into pairs, 512 bitstrings from a 256-bit output. A public key would be generated with a cryptographic function to each of the 512 bitstrings. Each BTC transaction would need a one-time Lamport signature.
Because Lamport signatures do not rely on elliptic curves over finite fields in Elliptic Curve Digital Signature Algorithm (ECDSA), which is used by Bitcoin and can be exploited by Shar’s algorithm, but on hash functions, this makes them a viable quantum-resistant alternative.
The downside of Lamport signatures is their increased size, upward of 16KB, and one-time use. Of course, just by shifting addresses and keeping BTC in cold storage, thus avoiding private key exposure, can also prevent QC from being effective.
Another approach to confound potential QC attacks would be to implement lattice-based cryptography (LBC). Unlike in ECDSA, LBC avoids finite patterns by relying on discrete points in n-dimensional lattice (grid) space that extends infinitely in all directions. Because of this feature, there has yet been developed a quantum algorithm that could break LBC.
However, to implement a new type of cryptography, Bitcoin would have to undergo a hard fork. In that scenario, there would likely need to be many signals indicating that major breakthroughs in quantum computing, particularly in qubit count and fault tolerance, are imminent.
Bottom Line
It is safe to say that the Bitcoin mainnet itself is not in danger from quantum computing, in either the near or distant future. Yet, if QC were to compromise Bitcoin’s encryption—rendering SHA-256 and ECDSA obsolete—it would deeply impact confidence in the cryptocurrency.
This confidence is crucial, as demonstrated by major companies like Microsoft and PayPal, which have adopted Bitcoin payments, drawn by up to 80% savings compared to card transactions, zero chargebacks, and complete control over funds. With over 300 million holders globally, Bitcoin’s appeal as both a secure asset and a cost-effective payment option remains strong.
Ultimately, Bitcoin’s value is sustained by the capital and confidence behind it. Its historical volatility shows how events—ranging from Elon Musk’s tweets and PayPal’s integration to ETF launches and the FTX collapse—have impacted market sentiment. A fundamental threat to Bitcoin’s encryption could lead to panicked sell-offs, miner withdrawals, and a reduced mining difficulty, potentially opening the door to a 51% QC attack with fewer qubits.
To prevent such a scenario, Bitcoin holders and developers would do well to keep up with QC developments.
This is a guest post by Shane Neagle. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
A breakdown of what type of risks quantum computing poses to Bitcoin, and how worried users of the network should be.
Crypto News
Proton Wallet — Now Available To Everyone — Is A Great Starter Self-Custodial Bitcoin Wallet

In July of last year, Swiss privacy tech company Proton (makers of Proton Mail) announced it would be launching its own bitcoin wallet — Proton Wallet.
I (along with about 100,000 other users) was given early access to the wallet to test it out and was impressed with the wallet’s user interface. I particularly liked that it allows you to link a user’s email address to their bitcoin address so that you only need to input the email address when sending bitcoin.
You can read my review of the wallet here.
Now that the wallet is available to the general public, I will recommend it to anyone I know who’s finally ready to move their bitcoin out of the hands of an exchange and into their own custody. I’ll also recommend it to anyone looking to make semi-regular bitcoin payments on-chain with a relatively small amount of bitcoin.
My reasons for recommending the wallet are as follows:
- It’s free to use (users can create up to three wallets and have up to three accounts in each wallet, which is sufficient for most users — more on that here; to create more wallets or accounts, Proton charges a fee)
- It’s easy to set up (you aren’t required to write down the 12-word seed phrase when you set up the wallet; however, it’s good practice to do so!)
- Like Proton Mail, Proton has no access to Proton Wallet user data, nor does it have access to its users’ private bitcoin keys
- Using an email address (which doesn’t have to be a Proton Mail address) to send bitcoin reduces the likelihood of inputting the wrong bitcoin address into the recipient field of a transaction
- You can select the priority speed of a transaction when sending bitcoin
- You can purchase bitcoin via Ramp or Banxa using Proton Wallet, enabling the bitcoin you purchase to be transferred directly into your custody
The only downsides to the wallet is that it doesn’t support Lightning transactions (consider the Breez SDK, Proton team!), and it doesn’t let you manage your UTXOs (loose change from bitcoin transactions, in layperson’s terms).
The latter isn’t super important, though, as, again, I’d recommend this wallet to those new to bitcoin self custody. UTXO management is more of a practice for moderate to advanced Bitcoin users.
All in all, Proton has created yet another fine product here for its 100 million users and counting, and it’s one that I’ll be recommending to Bitcoin newbies moving forward.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Proton Wallet is well-suited for anyone looking to begin their bitcoin self custody journey and/or anyone looking to make semi-frequent payments on-chain while managing a relatively small bitcoin stack.
Crypto News
El Salvador Is Still Bitcoin Country

El Salvador is still Bitcoin country, despite the fact that bitcoin is no longer legal tender in the country — at least from where I’m sitting.
Let’s start with some background on the matter.
On January 29, 2025, the Legislative Assembly in El Salvador voted to remove bitcoin’s status as legal tender.
This means that businesses in the country no longer have to accept bitcoin (not that this rule was ever strictly enforced while bitcoin was classified as legal currency, as far as I know; however, I have been told that big businesses that operate in the country (e.g., McDonalds, Walmart) may stop accepting bitcoin as payment now, which could have a detrimental effect on adoption).
This change occurred approximately one month after the International Monetary Fund (IMF) struck a deal with authorities in El Salvador that stipulated the following:
- El Salvador would receive a $1.4 billion loan to support the government’s “reform agenda”
- Bitcoin-related risks be mitigated; bitcoin acceptance in the private sector must be voluntary, while the public sector’s participation in Bitcoin-related activities would be “confined” (bitcoin can no longer be used to settle government debts or pay taxes)
- Operations for the government-created Bitcoin wallet, Chivo, would be “unwound”
While the news of the Salvadoran government’s reversing its policy on bitcoin as legal tender as a result of influence from the IMF feels like a gut punch even to me, someone who isn’t Salvadoran and doesn’t live in the country, I can’t help but believe that El Salvador is still Bitcoin country.
And this feeling has only grown stronger based on what I’ve seen Bitcoiners in El Salvador posting on X.
Evelyn Lemus, co-founder and Director of Education at Bitcoin Berlin, a Bitcoin circular economy within the country, doesn’t plan to stop teaching everyday Salvadorans about Bitcoin.
Just saying it out loud.
Bitcoiners will not stop teaching about Bitcoin and making the adoption happen just because Bitcoin is not legal tender anymore. This means we need to keep pushing harder and keep doing what we do 🇸🇻
LFG🙌
Bitcoin in the hands of people 🫡 pic.twitter.com/hnMpJmL5c7— Evelyn Lemus (@Evelynlemus2906) February 2, 2025
The team at Bit Driver don’t plan to change their business model — accepting bitcoin as taxi fare — any time soon.
We’re still a Bitcoin a company.
— Bitdriver (@bitdriver_sv) February 2, 2025
While John Dennehy, founder of Mi Primer Bitcoin, expressed concern about the government of El Salvador’s rolling back its policy on bitcoin as legal currency, he and the ever-growing team at Mi Primer Bitcoin plan to double down on the work they’re doing.
Good morning from El Salvador!
We are now in DAY NINE since the government rescinded Bitcoin as legal tender, at the request of the IMF (effective after 90 days)
This means grassroots, independent Bitcoin education is now MORE important than ever
In response, at… pic.twitter.com/iTXdf0gAoL
— John Dennehy (@jdennehy_writes) February 7, 2025
The legendary Max and Stacy haven’t publicly voiced any plans to give up on El Salvador anytime soon.
And El Salvador’s Bitcoin Office, run by Stacy, is still stacking bitcoin and helping to run Bitcoin education programs in the country.
🇸🇻EL SALVADOR STACKS ANOTHER 1 BTC TO STRATEGIC RESERVE
El Salvador is still stacking.
Every day.
➡️Total SBR Holdings: 6,071.18 BTC
➡️Total Added Today: +1 BTC
➡️Total Added Past 7 Days: +22 BTC
➡️Total Added Past 30 Days: +60 BTC… pic.twitter.com/y4kv2693BX— The Bitcoin Office (@bitcoinofficesv) February 7, 2025
The lesson here is that while the law around Bitcoin may have changed in El Salvador, the Bitcoiners on the ground in the country have hardly flinched.
Because we are Bitcoin, what matters most is that everyday Salvadorans and everyone else involved in the Bitcoin movement in El Salvador continues to push forward with the Bitcoin mission.
The IMF may have landed a blow, but Bitcoiners in El Salvador remain steadfast in their efforts to foster broader Bitcoin adoption.
El Salvador is still Bitcoin country.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Bitcoin may no longer be legal tender in El Salvador, but Bitcoiners in the country haven’t given up on the mission.
Crypto News
Introducing the Bitcoin Everything Indicator

Wouldn’t it be great if we had one all-encompassing metric to guide our Bitcoin investing decisions? That’s precisely what has been created, the Bitcoin Everything Indicator. Recently added to Bitcoin Magazine Pro, this indicator aims to consolidate multiple metrics into a single framework, making Bitcoin analysis and investment decision-making more streamlined.
For a more in-depth look into this topic, check out a recent YouTube video here: The Official Bitcoin EVERYTHING Indicator
Why We Need a Comprehensive Indicator
Investors and analysts typically rely on various metrics, such as on-chain data, technical analysis, and derivative charts. However, focusing too much on one aspect can lead to an incomplete understanding of Bitcoin’s price movements. The Bitcoin Everything Indicator attempts to solve this by integrating key components into one clear metric.
The Core Components of the Bitcoin Everything Indicator
Bitcoin’s price action is deeply influenced by global liquidity cycles, making macroeconomic conditions a fundamental pillar of this indicator. The correlation between Bitcoin and broader financial markets, especially in terms of Global M2 money supply, is clear. When liquidity expands, Bitcoin typically appreciates.
Fundamental factors like Bitcoin’s halving cycles and miner strength play an essential role in its valuation. While halvings decrease new Bitcoin supply, their impact on price appreciation has diminished as over 94% of Bitcoin’s total supply is already in circulation. However, miner profitability remains crucial. The Puell Multiple, which measures miner revenue relative to historical averages, provides insights into market cycles. Historically, when miner profitability is strong, Bitcoin tends to be in a favorable position.
On-chain indicators help assess Bitcoin’s supply and demand dynamics. The MVRV Z-Score, for example, compares Bitcoin’s market cap to its realized cap (average purchase price of all coins). This metric identifies accumulation and distribution zones, highlighting when Bitcoin is overvalued or undervalued.
Another critical on-chain metric is the Spent Output Profit Ratio (SOPR), which examines the profitability of coins being spent. When Bitcoin holders realize massive profits, it often signals a market peak, whereas high losses indicate a market bottom.
The Bitcoin Crosby Ratio is a technical metric that assesses Bitcoin’s overextended or discounted conditions purely based on price action. This ensures that market sentiment and momentum are also accounted for in the Bitcoin Everything Indicator.
Network usage can offer vital clues about Bitcoin’s strength. The Active Address Sentiment Indicator measures the percentage change in active addresses over 28 days. A rise in active addresses generally confirms a bullish trend, while stagnation or decline may signal price weakness.
How the Bitcoin Everything Indicator Works
By blending these various metrics, the Bitcoin Everything Indicator ensures that no single factor is given undue weight. Unlike models that rely too heavily on specific signals, such as the MVRV Z-Score or the Pi Cycle Top, this indicator distributes influence equally across multiple categories. This prevents overfitting and allows the model to adapt to changing market conditions.
Historical Performance vs. Buy-and-Hold Strategy
One of the most striking findings is that the Bitcoin Everything Indicator has outperformed a simple buy-and-hold strategy since Bitcoin was valued at under $6. Using a strategy of accumulating Bitcoin during oversold conditions and gradually selling in overbought zones, investors using this model would have significantly increased their portfolio’s performance with lower drawdowns.
For instance, this model maintains a 20% drawdown compared to the 60-90% declines typically seen in Bitcoin’s history. This suggests that a well-balanced, data-driven approach can help investors make more informed decisions with reduced downside risk.
Conclusion
The Bitcoin Everything Indicator simplifies investing by merging the most critical aspects influencing Bitcoin’s price action into a single metric. It has historically outperformed buy-and-hold strategies while mitigating risk, making it a valuable tool for both retail and institutional investors.
For more detailed Bitcoin analysis and to access advanced features like live charts, personalized indicator alerts, and in-depth industry reports, check out Bitcoin Magazine Pro.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
A Single Metric to Rule Them All – The Bitcoin Everything Indicator combines multiple key metrics into one comprehensive tool for better investment decisions.
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