Coinbase urges Bitcoin transition to quantum-resistant security

Coinbase, a major cryptocurrency custodian holding approximately 5% of the total Bitcoin supply, has released a technical proposal urging the Bitcoin ecosystem to begin preparing for quantum computing threats. The company warns that transitioning to quantum-resistant security could take several years, necessitating immediate planning before cryptographically relevant quantum computers (CRQC) become a reality.

Coinbase recommends an adaptable architectural approach rather than a single cryptographic fix. Key technical suggestions include utilizing flexible output designs like BIP-360 (P2MR) or P2TRv2 to allow for the integration or replacement of signature schemes without requiring a complete network overhaul. The company also proposed a hybrid '1-of-2' configuration, which would allow users to utilize both classical and post-quantum signatures during a phased migration.

The proposal highlights that the transition involves complex challenges beyond just new algorithms, including managing transaction fees, network capacity, and wallet compatibility. Coinbase also noted that the issue of dormant or lost Bitcoin, including funds potentially belonging to Satoshi Nakamoto, should be treated as a separate governance and engineering matter to avoid delaying the broader security upgrade.