Will 2029 be a life-and-death test for BTC?

Author: Murphy; Source: X, @Murphychen888

A Google article has caused a strong stir in the BTC community. He broke the illusion that the “quantum threat is still far off,” bringing the quantum threat—previously thought to be 10–20 years away—forward into a specific window: 2029 (after the 2028 BTC halving).

Google points out that a sufficiently powerful quantum computer could derive a private key from a public key within 9 minutes. Since the average BTC block time is 10 minutes, this means that attackers can directly intercept and counterfeit transactions during the window after the transaction is broadcast but before it is confirmed.

In addition, another fatal issue is addresses on-chain that exposed early public keys. Based on on-chain data, there are currently a total of 3.379 million BTC that have not moved for 10 years (including 1.08 million coins in Satoshi’s addresses). In theory, these coins could all be “lambs waiting for slaughter.”

Because most of these are early holdings from when it was mostly a matter of “the coins are gone” or “the people are gone,” they cannot proactively complete “post-quantum migration.” And once they fall into the hands of the hacker who cracks the first system, it means that in the world of BTC, there’s a “madman” holding a huge stash of illegal wealth worth 2.6x an ETF and 4.4x MSTR.

At present, what I see in the community’s reactions mainly splits into two camps:

• Optimists believe that as long as, through a single soft fork, an anti-quantum signature scheme is introduced (BIP-360 and P2MR), and BTC wallet migration is completed before the quantum threat arrives, safety can be ensured.

• Pessimists believe that even if it’s technically feasible, a decentralized governance model will be very hard to reach consensus within just 3–4 years—especially on how to handle so many BTC with exposed public keys. If it’s mishandled, it could trigger another round of a hard-fork backlash.

By then, the “conservatives” who support protecting private assets and the “aggressives” who support network security will once again clash fiercely. Just like the severe disagreements between the Core development team and major miners over block sizes in 17–18, which ultimately led to a hard fork—when it almost tore Bitcoin apart.

Also, even if the community reaches consensus in the end, there’s one thing that might still be impossible to avoid.

That is: the passive creation of a large amount of BTC migrations for security upgrades. These non-economic on-chain activities would seriously pollute BTC’s on-chain data. As a “global public ledger,” when facing an existential crisis, it has to sacrifice transparency premiums.

The trading models based on “on-chain data analysis” that we built over the past decade or more may face structural failure. For example, any valuation models whose underlying logic is entirely based on “holding time” would be thoroughly distorted—causing the breakdown of the foundational logic behind profit/loss estimation models, and so on.

Future on-chain analysis tools may have to split BTC history into a “pre-quantum era” and a “post-quantum era.” Perhaps only institutions with top-tier data-cleaning capabilities (not sure if Glassnode can do it) will be able to strip real trading intentions out of massive noise.

When trading decisions return to traditional ways, and people start relying again on the news cycle, sentiment, or technicals, retail investors will lose a transparent and effective technical tool—one of the only chances for them to stand on the same starting line as institutions.

That’s truly a huge regret…