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Coinbase laid out a detailed technical wish list this week for hardening Bitcoin against quantum computers, arguing the migration is a multi-year job that cannot wait for proof that the threat is real. The exchange, which says it custodies roughly 5% of all Bitcoin, published the paper on Tuesday, a date logged as Oct. 13 by Coincentral and ZyCrypto and as Oct. 14 by Decrypt, which reviewed the post.
Decrypt reported that the company warned Bitcoin consensus changes and ecosystem migrations can take years, meaning a scramble after the arrival of a cryptographically relevant quantum computer would come too late. Coinbase’s paper does not claim such a machine can break Bitcoin today; Coincentral describes the threat as a future possibility that justifies early planning.
Also read: Europol Flags Crypto Wallet Keys as Quantum Computing Risk
Key facts
- Coinbase says it custodies about 5% of all existing Bitcoin and published its post-quantum recommendations in a technical paper dated Tuesday.
- The exchange backs flexible output designs, naming BIP-360 and P2TRv2, so new signature systems can be swapped in over time.
- It proposes a hybrid 1-of-2 spending path that lets funds be signed with either a current key or a separate post-quantum key.
- Coinbase named candidate signature options including ML-DSA, SLH-DSA and FN-DSA, and said developers should test signature size, speed, fees and hardware support.
- The paper set no migration deadline and backed no final algorithm.
Container, hybrid keys and a stateless option
Bitcoin approves transactions with elliptic-curve cryptography, including ECDSA and Schnorr signatures. A powerful enough quantum machine could in theory derive a private key from an exposed public key and drain funds, an event the industry calls Q-Day.
Coinbase’s answer is to separate the container from the signature. Per ZyCrypto, the exchange is exploring flexible output designs such as P2MR under BIP-360 and P2TRv2. Coincentral adds that BIP-360 is a draft that removes a Taproot spending option exposing a public key, and that it does not install a post-quantum signature on its own. In March, BTQ Technologies reported testing experimental BIP-360 transactions on a test network; that work did not activate the proposal on Bitcoin’s main network.
Also read: US government moves 9,261 BTC worth $770M to Coinbase Prime
The hybrid route would let users upgrade protection before rules for older signatures are final. For institutional holders, Coinbase said new schemes must work with multi-party computation, the key-splitting technique custodians rely on to prevent theft. ZyCrypto quoted the researchers on stateless signing: stateful post-quantum schemes may be smaller and faster, but managing state in digital signatures is error-prone and could lead to forgery, so a stateless option should also be available.
Why it matters
The paper reads less like a mandate than a requirements list from one of Bitcoin’s largest stakeholders, and it lands while researchers, exchanges and validators are stepping up quantum work. For ordinary holders, the practical takeaway is that wallet and custody design may change years before any signature policy is settled, since a transition has to fit Bitcoin’s limited block space and keep working for both consumer wallets and institutional custody.
Coinbase’s position builds on earlier moves, including a quantum advisory board in January, a Bitcoin Security Consortium joined in July with BlackRock and Strategy and a combined $15 million pledged toward quantum-proofing Bitcoin, per Decrypt. Coincentral notes the company has begun preparing its own custody systems and has joined discussions with researchers.
Dormant coins left as a separate fight
Lost, dormant and Satoshi-era coins remain the hardest question, and Coinbase wants them handled outside the technical work so they do not slow protection for active wallets. ZyCrypto reports that community researchers proposed multiple solutions in April and that the debate still lingers. Coinbase discussed recovery methods using wallet seed information and cryptographic proofs, cautioning that any rescue mechanism must itself stay secure against an attacker holding only an exposed public key. A separate draft, BIP-361, would gradually restrict older signatures.
What to watch
Coinbase said its next steps run through talks with researchers, developers and open-source contributors, and it asked for a repeatable process to compare signature systems under realistic network conditions, covering transaction verification, hardware wallets, fees and block propagation. Whether BIP-360 or BIP-361 advance beyond draft status, and what that testing process produces, is the concrete signal to track.
None of this is financial advice, and crypto markets are volatile and unpredictable.
Reported by decrypt.co.
Sources: Decrypt, Coincentral, Zycrypto