Bitcoin Faces Potential Quantum Challenge: Project 11 Offers 1 BTC Bounty to Test Blockchain Encryption

On April 16, 2025, quantum computing research group Project 11 announced a groundbreaking initiative: a 1 BTC bounty—valued at approximately $85,000 at current prices—for the first team to break a simplified version of Bitcoin's elliptic curve cryptography (ECC) using a quantum computer. Dubbed the "Q-Day Prize," this challenge aims to assess the urgency of quantum computing threats to Bitcoin's security, a concern that has loomed over the cryptocurrency industry as quantum technology advances.

The potential for quantum computers to undermine blockchain security has been a topic of intense debate. Bitcoin's security relies heavily on ECC, specifically the Elliptic Curve Digital Signature Algorithm (ECDSA), which ensures that only the owner of a private key can authorize transactions. This cryptographic method is considered robust against classical computers, which would take billions of years to crack it. However, quantum computers, leveraging algorithms like Shor's algorithm, could theoretically break ECC in minutes by solving the discrete logarithm problem that underpins its security. A sufficiently powerful quantum computer could derive a private key from a public key, potentially allowing attackers to forge signatures and steal funds from exposed Bitcoin addresses.

The urgency of this threat is amplified by the "harvest now, decrypt later" scenario, where malicious actors could collect encrypted data today and decrypt it once quantum computers become powerful enough. This makes proactive measures critical, even if quantum computers capable of breaking 256-bit keys are still years away.

The crypto industry is not standing still. Bitcoin developers are already exploring quantum-resistant measures. In April 2025, Chilean technologist Agustin Cruz proposed a Bitcoin Improvement Proposal (BIP) for a Quantum-Resistant Address Migration Protocol (QRAMP). This protocol would require users to migrate funds from legacy ECDSA addresses to new, quantum-resistant ones before a set deadline, minimizing exposure to quantum attacks. QRAMP hides public keys until coins are spent, reducing the window of vulnerability.

Other blockchains are also preparing. In January 2025, Solana introduced the Winternitz Vault, a quantum-resistant solution that generates new keys for each transaction using hash-based signatures. Ethereum co-founder Vitalik Buterin has also proposed a hard fork to protect Ethereum from quantum threats, emphasizing the need for proactive planning.

Project 11's challenge focuses on a "toy version" of Bitcoin's cryptography—a scaled-down 5-bit key, far smaller than the 256-bit keys used in real-world Bitcoin transactions. While breaking this simplified version won’t directly compromise Bitcoin, it would signal a significant step toward quantum computers posing a real threat. "If somebody breaks a 5-bit key, it will be a breakthrough. That's much smaller than BTC's 256-bit keys, but quantum computers will get there too," Project 11 stated on X. "When that happens, we need to know."

The deadline for the Q-Day Prize is April 5, 2026, giving researchers less than a year to demonstrate a quantum breakthrough. If successful, the winning team would claim not only the 1 BTC prize but also a milestone in quantum computing history—one that could send shockwaves through the crypto industry.

"When it comes to the risk of quantum computing, a lot people are 'hoping' the problem is far enough away to ignore," Alex Pruden, the co-founder of Project 11 stated on his X post,"But 'hope' is not a plan. And understanding the timeline for which we plan requires an accurate threat model. "