In its amended Bitcoin ETF filing, BlackRock expands disclosures about quantum computing risks, warning it could compromise Bitcoin’s cryptographic security. Despite ongoing community efforts to develop quantum-resistant measures, no guarantees exist regarding timely deployment. The filing coincides with BlackRock’s amendments to its Ethereum Trust, as fears grow over quantum computing advancements by tech giants like Google and Microsoft. Nevertheless, many in the industry are exploring quantum-resistant technologies, while research suggests quantum computing might also bolster blockchain security.
In a notable update, BlackRock has amended its iShares Bitcoin Trust (IBIT) filing, introducing a detailed assessment of risks stemming from advancements in quantum computing. This revised prospectus, submitted on May 9, expands on earlier concerns by elaborating how emerging quantum technologies could pose serious threats to Bitcoin’s cryptographic backbone.
The new language highlights that improvements in quantum computing may undermine several cryptographic algorithms used globally—which includes those securing digital assets like Bitcoin. Specifically, if quantum computing technology progresses substantially, it could render Bitcoin’s underlying cryptography ineffective. According to BlackRock’s filing, this could result in compromised security for the Bitcoin network and could expose wallets holding Bitcoin to risks of theft or loss for shareholders.
Bloomberg ETF analyst James Seyffart remarked on the normalcy of such disclosures in SEC filings, citing them as routine risk highlights for any products or assets in the financial landscape. He conveyed that all potentials for failure must be addressed, an established practice for firms like BlackRock.
Despite ongoing efforts within the Bitcoin community to create quantum-resistant solutions, the filing does warn that there are no guarantees these new security architectures will be constructed and deployed across the network promptly. This adds a layer of uncertainty concerning how quickly the ecosystem can adapt.
On the same day, BlackRock also made amendments to its iShares Ethereum Trust, focusing on the mechanisms for in-kind creation and redemption. These filings follow a meeting with SEC representatives to discuss strategies for staking and options trading for crypto ETFs.
The discourse on the intersection of quantum computing and Bitcoin security has intensified recently, particularly after Google’s introduction of its revolutionary quantum chip, Willow. This chip is designed to perform in minutes tasks that would take classical supercomputers an unfathomable amount of time—around 10 septillion years. Not long after that, Microsoft unveiled its own breakthrough, the Majorana 1 quantum chip, signalling substantial advancements in quantum technology.
These updates have caused alarm within the cryptocurrency community, with individuals expressing concerns about the potential for quantum computers to eventually break the encryption securing not just wallets but entire exchanges as well. Yet, despite these advancements, experts largely agree that practical, large-scale threats to Bitcoin remain theoretical at this point, with current quantum machines lacking the necessary power and stability to breach public-key cryptography.
Nevertheless, anticipation for a “quantum-safe” future is inevitable, and numerous blockchain projects are proactively pursuing or even implementing quantum-resistant technologies. This isn’t just about defence, however; there’s a flip side. Research from institutions like JPMorgan and Quantinuum unveiled that quantum computers could improve blockchain security by generating certifiably random numbers—offering major benefits to encryption and digital signatures.
