Rather than requiring changes to Bitcoin’s core rules, the approach lets users opt into quantum-resistant protection at the contract level.
Blockstream Research has deployed what it says are the first transactions on a live Bitcoin sidechain protected by post-quantum cryptography.
This is in direct response to growing warnings that powerful quantum computers could eventually break the security systems that protect crypto wallets.
What Blockstream Actually Built
Following Google’s recent quantum paper examining risks across several layers of the crypto system, including wallets, block validation, and cross-chain bridges, Blockchain Research revealed that it had already deployed a post-quantum signature scheme, known as SHRINCS, on Bitcoin’s Liquid sidechain.
According to the research firm, users can now lock funds into contracts that require quantum-resistant signatures to spend them. The approach avoids changes to the network’s core rules. Instead, it uses Simplicity, Blockstream’s smart contract language, to add new security conditions at the user level, meaning that anyone who wants added protection can opt in without waiting for a network-wide upgrade.
Their research also broke down four main risks identified for sidechains: forged transaction signatures, forged block signatures, broken confidential transactions, and attacks on bridge mechanisms that move assets between chains.
The team said that work on these areas is at different stages, with transaction signatures already deployed, while block signing and confidential asset protections are still in testing or development. Research into securing bridged Bitcoin is also going on.
According to the Google paper, a sufficiently advanced quantum computer could break the private keys of major crypto wallets in a matter of days. It also raised the possibility of “mempool attacks,” where funds could be intercepted before transactions are confirmed.
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Debate Continues Over Urgency and Path to Upgrades
The wider crypto community is divided on how soon these risks could materialize, with Changpeng Zhao, the former CEO of Binance, saying recently that there is “no need to panic.” According to him, networks can switch to quantum-resistant algorithms when they need to.
He did, however, point out one awkward problem: the estimated one million BTC that belong to Satoshi Nakamoto are stored in an old wallet format that doesn’t protect them from quantum attacks. CZ suggested those coins may eventually need to be locked or effectively removed from circulation if Satoshi never moves them.
Blockstream is also working on a related scheme called SHRIMPS, which produces post-quantum signatures roughly three times smaller than current US government standards, built specifically for Bitcoin’s tight block space limits. A Bitcoin Improvement Proposal for it is in progress. What’s running on Liquid today is the proof that it can work in a real environment, under real conditions, with real funds at stake.
