The ‘Glass Vault’ Dilemma: 30% of Bitcoin Vulnerable to Quantum Theft

 A convergence of new data and accelerated hardware timelines is forcing the industry to confront a grim reality: roughly one-third of the total Bitcoin supply is already exposed, and saving it may require breaking the most sacred rules of the protocol.

David Duong, Global Head of Investment Research at Coinbase, has cautioned that advancements in quantum error correction have moved the threat from theoretical to structural.

The warning echoes a risk that the largest asset manager in the world quietly priced in months ago.

The "Glass Vault" problem

The vulnerability centers on legacy addresses used extensively in the early years of Bitcoin. 

Modern addresses use a hash to shield the user's identity. These older formats, specifically Pay-to-Public-Key (P2PK), expose the raw public key directly on the blockchain.

A quantum computer running Shor’s algorithm, a quantum algorithm that efficiently factors large integers using methods unfeasible in classical computing, could theoretically derive the private key from this exposed public key and unlock the wallet without permission.

Data from Deloitte and Chaincode Labs corroborates the assessment from Duong. Their analysis indicates that between 25% and 33% of the circulating supply resides in these vulnerable formats. This tranche includes the "Satoshi coins" mined by the creator that have remained untouched since 2010.

BlackRock’s quiet warning

Institutional players have already moved to protect themselves legally. 

BlackRock updated the prospectus for its iShares Bitcoin Trust (IBIT) in May 2025 to list quantum computing as a material risk factor.

The filing warned that future advances in quantum computing could compromise Bitcoin cryptography. It noted the network might need a broad consensus upgrade to remain secure. It was a bureaucratic admission that the asset class faces a technical expiry date that gold does not.

The technical fix is a soft fork to migrate the network to quantum-resistant signatures. The governance implications are explosive. Owners of the old wallets are dormant, so they cannot actively migrate their coins. The network faces two stark choices.

The protocol could set a deadline by which any legacy coins become unspendable. This saves the currency from hyperinflation yet destroys the property rights of the early adopters. 

Alternatively, the protocol does nothing, a powerful quantum computer eventually comes online, and the attacker loots the old wallets. This preserves code immutability while handing 30% of the supply to whoever builds the machine first.

The timeline shrinks

Security researchers are no longer comfortable with the 2040 timeline. A Human Rights Foundation report highlighted late last year that the transition window is closing.

One researcher noted the worst case is that the industry fails to migrate fast enough, rather than computers suddenly leaping forward. Trillions of dollars now sit in a glass vault. 

The question for the next decade is whether Bitcoin will sacrifice its history to save its future.