Rapid progress in quantum computing could pose risks not only to the cryptocurrency market, but also to encrypted systems more broadly, including those used in banking. According to experts cited in the report, however, crypto markets may be among the first areas affected by this technological shift.

As forecasts around so-called “Q-Day” move closer, experts say the biggest obstacle to defending cryptocurrencies against quantum attacks may not be their cryptography itself, but the slow governance processes used to approve and implement major network changes. For public blockchains, cryptographic changes typically require broad agreement among developers, node operators, miners or validators, exchanges and wallet providers before users can safely migrate to new standards.

Speaking to CoinDesk, Quantum Xchange CEO Eddy Zervigon compared cryptocurrencies to “canaries in a mine.” He said the first successful cyberattack powered by quantum computing would most likely appear on decentralized blockchain networks.

Zervigon emphasized that quantum-based attacks are expected to target financial networks, and said cryptocurrencies could become the first target in that process.

According to Zervigon, a cryptographically meaningful quantum computer capable of breaking the elliptic curve cryptography that underpins Bitcoin blockchain signatures, as well as the encryption protecting banking infrastructure, does not yet exist. In Bitcoin and similar networks, digital signatures are used to prove control of funds, which is why any future ability to break those signature schemes would be treated as a protocol-level security issue rather than a routine software bug.

Even so, work by major technology companies such as Microsoft, IBM and Google suggests the quantum threat may be closer than previously assumed.

Zervigon said the general expectation in the industry is that a cryptographically meaningful quantum computer could be developed around 2029.

“Companies like Microsoft, IBM, and others investing billions of dollars in quantum computing generally believe that a commercially viable and cryptographically significant quantum computer will exist around 2029.”

A recent study published by Google researchers was cited as one report supporting that view. According to the research shared by Google, the number of physical qubits required to break the cryptographic systems protecting Bitcoin and Ethereum has fallen to roughly 20 times below previous estimates. The estimate highlights the scale of the potential risk and suggests the ability to compromise such systems may be closer than earlier projections indicated.

Zervigon’s conclusion is that Bitcoin’s largest risk is not its current cryptographic design, but the network’s slow pace in implementing major upgrades. The issue to watch is whether major crypto networks can coordinate post-quantum security planning before quantum hardware reaches the threshold described by researchers and industry executives.