Bitcoin Vs. Quantum Shockwave – Microsoft’s Discovery Puts Crypto At Risk

Microsoft has presented a ground-breaking quantum computing technology that has the potential to transform the future of Bitcoin and cryptography.

The tech behemoth unveiled the Majorana 1 chip, a game-changing step towards creating a utility-scale quantum computer. While this innovation has great potential, it raises questions about Bitcoin’s long-term security.

Experts are currently debating the potential risks and whether the crypto sector is ready for a quantum-driven future.

A New State Of Matter In Quantum Computing

Microsoft’s research team claims to have discovered a novel state of matter known as a “topological superconductor”. This unusual phenomenon, which is crucial to the Majorana 1 semiconductor, allows for more stable and error-free qubits.

Qubits, the fundamental units of quantum computing, have previously suffered from error rates that hampered large-scale applications.

Microsoft aims to reduce error rates by a factor of 1,000 by effectively proving their topological qubit, compared to past quantum approaches. The company believes this will bring utility-scale quantum computing closer, potentially within the next decade. New frontiers in artificial intelligence, material science, and—above all— cryptography could be opened by this technology.

Microsoft’s new state of matter is a quantum threat to bitcoin https://t.co/ozDkACBnHi

— Protos (@Protos) February 20, 2025

The Threat To Bitcoin Encryption

Bitcoin mines rely on SHA-256 and employs the Elliptic Curve Digital Signature Algorithm (ECDSA) to secure transactions. These systems are meant to be almost impervious to access with conventional computers. Quantum computers could, however, reverse that.

If Microsoft’s quantum leap continues, experts fear that algorithms such as Shor’s and Grover’s will someday crack Bitcoin’s encryption. Shor’s method, in particular, may solve the mathematical challenges that underpin ECDSA, thus exposing Bitcoin wallets to theft.

While today’s quantum devices are still a long way from this potential, fast improvements suggest that the risk could become a reality within the next decade.

Microsoft has indicated that it intends to construct a fully operational quantum computing system by 2030. The Majorana 1 chip represents an important milestone, but considerable hurdles remain. The company’s roadmap involves improving qubit technology, scaling hardware, and developing effective quantum error correction.

Cryptocurrency experts are now looking at quantum-resistant encryption methods as a solution. Some blockchain projects are already working on post-quantum encryption to keep digital assets safe from hacks in the future. However, transitioning Bitcoin to a quantum-secure framework would require global consensus and careful execution to maintain network integrity.

While Microsoft’s breakthrough does not constitute an immediate threat, it has fuelled debate over Bitcoin’s long-term security. Quantum computing is still in its early phases, but the rapid pace of research suggests that the crypto sector cannot afford complacency.

The crypto community has a crucial question: when should preparations for a quantum-resistant future begin? If projections prove correct, the next five to 10 years will be critical in determining whether the world’s largest cryptocurrency remains secure in the face of enormous technological progress.

Featured image from Gemini Imagen, chart from TradingView