Google Recently Warned That Quantum Computers Could Crack Bitcoin. Now It's Selling Protection.

One day, it's technically possible that a hacker equipped with a quantum computer could crack the encryption that underpins Bitcoin (CRYPTO: BTC). That day may be drawing nearer; in March 2026, security researchers at Alphabet (NASDAQ: GOOGL) estimated that a future quantum machine could break Bitcoin's wallet cryptography in less than 10 minutes, and that a quantum computer of sufficient power could be far easier to create than what had previously been believed. And now, on Oct. 28, Google Cloud previewed its new crypto custody system targeting banks that offer crypto products to their clients, positioning the quantum threat to Bitcoin as one of the risks that justify buying its services.

So what does this mean for Alphabet's stock, and what does this mean for Bitcoin and other cryptocurrencies?

Image source: The Motley Fool.

This move is aimed at cutting down on the biggest type of crypto theft

Google's new custody system is designed to protect crypto assets from one particular threat: theft of users' private keys.

In case you aren't familiar, a private key is the secret password that enables the control of a crypto wallet. According to Chainalysis data, hacked or otherwise illegally obtained private keys accounted for 43.8% of the crypto stolen in 2024.

Google's new service is called Multi-Party Compute (MPC), and it's useful for preventing that because it splits each private key into fragments which are then stored on separate systems, making it much more difficult to gain access to the keys by hacking individual networks or computers. Commercial launch of MPC is planned for early 2027.

But as of now, there's little reason to expect MPC to be very beneficial for Alphabet shareholders.

Per Alphabet's third-quarter earnings, Google Cloud revenue climbed 103% year over year to $30.7 billion, accounting for 24% of the company's total revenue. As there's no information available on the service's pricing yet, and plenty of other crypto custody options and cybersecurity services that appeal to institutional investors, it's unclear how the new initiative will capture much market share or generate much revenue at all.

And the entire endeavor's connection to quantum cybersecurity is, to some degree, a long shot; most timelines don't expect quantum computers that are powerful enough to be relevant to cryptocurrency encryption to even exist until five years from now at the earliest, and some estimates only see that happening after a decade or two.

Does Google's product make Bitcoin safer from quantum computers?

Aside from the above, it's also important for investors to temper their concerns (and expectations) for Google's involvement in the quickly evolving field of quantum cybersecurity.

In theory, sufficiently sophisticated quantum computers could crack Bitcoin's encryption and steal funds by working backward from a public key, which is a wallet's cryptographic identifier that is visible to everyone on the blockchain, to get to the private key behind it. An attack like that wouldn't need to steal any key fragments, so it isn't helpful to split the keys across systems like Google's approach does.

More than 6 million bitcoins, a substantial portion of the 21 million coins that can ever exist (almost 29%), are held in wallets with exposed public keys, and those are the coins that are most at risk as quantum computing companies improve the technology over the coming years. A successful attack would likely mean that Bitcoin would lose a dramatic amount of value overnight as holders fled to safer assets.

Furthermore, Google has given no timetable for when post-quantum cryptography, encryption built to resist quantum attacks, will be implemented in its service, though it's clearly on the agenda to develop at some point. So for now, the quantum security pitch is ahead of what the product can actually do as it's presently known and envisioned.

Alphabet investors can thus treat MPC as a small bonus for now, although it probably isn't worth loading up on the stock due to this new offering.

On the other hand, if quantum computers continue developing faster than anticipated, there could be a growing demand (and perhaps even a market panic causing a clamor) for a quantum-safe custody option, which Google would in turn be well positioned to deliver on, especially if its service gains some early traction in advance of that.

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Alphabet and Bitcoin. The Motley Fool has a disclosure policy.