Coinbase says Bitcoin should start its quantum upgrade now. What that means for your coins

Coinbase, one of the world's largest bitcoin custodians, published a technical paper on October 13, 2026, urging the Bitcoin community to start getting ready for quantum computers now, even though nobody knows when a machine able to threaten it might arrive. Here is what Coinbase proposed, what it means for ordinary holders (very little, for now), and the scam that tends to follow headlines like this.

What happened

The paper, posted on Coinbase's blog and written by Shashank Agrawal, sets out what Coinbase would like to see as Bitcoin moves to quantum-resistant security. Coinbase says roughly 12% of every bitcoin ever issued sits in its custody for customers, which gives it a large stake in how this plays out. CoinDesk later noted that an earlier version of the post had wrongly put the figure at 5%.

Coinbase is careful about what the paper is and isn't. It calls it "an input to an open discussion, not a set of instructions or a final Coinbase position." It doesn't set a deadline or announce an agreed upgrade.

The threat, in plain English

Each bitcoin wallet has a private key, which signs transactions, and a public key, which the network uses to check those signatures. Today's computers can't work backward from the public key to the private one. A large enough quantum computer, which researchers call a cryptographically relevant quantum computer (CRQC), could in theory do exactly that.

No such machine exists today. In a June 2026 report, Coinbase's independent quantum advisory council concluded that current quantum machines are not capable of cracking blockchain cryptography. It added that timelines are uncertain, which is why it argues for preparing early.

What Coinbase proposed

Coinbase's argument is that a new signature scheme alone isn't enough. In its view, an ideal transition would protect funds that are already exposed as well as new ones, fit Bitcoin's limited block space, let ordinary computers keep running full nodes, and work for both everyday wallets and big custodians. Its main points:

• Start before there's certainty. In Coinbase's words, "Bitcoin consensus changes and ecosystem migrations can take years," so the work should begin well before anyone announces a CRQC.
• A flexible "container." Coinbase wants a new output (address) type that can add, swap or combine quantum-resistant signature schemes later without a full redesign. It names P2MR, proposed in BIP-360 (opens in a new tab), and a design called P2TRv2 as candidates.
• Staged protection. Active wallets could opt in early. One option Coinbase describes is a 1-of-2 setup in which the same coins can be spent with either a classic key or a quantum-resistant key.
• Caution with "stateful" signatures. Some compact quantum-resistant schemes require the wallet to keep track of which one-time keys it has already used. Coinbase warns that losing that record, for example by restoring an old backup, could let an attacker forge a signature, so it wants a stateless option available too.
• Solid implementations and custody support. Coinbase asks for code that checks signatures the same way on every platform, doesn't leak secrets through timing, and stays safe if a random-number generator fails. It also wants at least one scheme that works with multi-party computation (MPC), a key-splitting technique, which large custodians use.

The hard part: coins that never move

The most contentious question isn't technical. Some bitcoin sits in old address types whose public keys are already visible on the blockchain, and some belongs to people who have lost their keys. Coinbase's advisory council estimated that roughly 1.7 million BTC sit in the oldest P2PK addresses, and about 7 million BTC in total are currently considered quantum-vulnerable once key reuse is counted.

What should happen to those coins if they're never moved? The council's report sets out the options without picking one. Supporters of freezing them say the coins could otherwise be stolen and dumped on the market. Opponents say freezing would override owners' property rights. In between are ideas such as capping the number of exposed coins allowed to move in each block.

Coinbase's new paper also doesn't pick a side. It argues that this debate should run alongside the technical work instead of holding it up, and it flags a worrying possibility: someone quietly using a CRQC to steal coins before anyone outside knows such a machine has been built. It also says any "rescue" route for old coins must itself be quantum-safe, or attackers could exploit it.

What it means for you

• Nothing to do today. Bitcoin hasn't adopted a post-quantum address type. BIP-360 is still marked as a draft, and the other designs are also just proposals, and any change would need broad agreement and new node and wallet software.
• Avoid reusing addresses. The advisory council's estimate counts reused keys as part of the exposed supply. Most modern wallets already give you a fresh receiving address each time, so use that feature.
• Keep your wallet software current. If an upgrade path is adopted, it will arrive as an ordinary update from your wallet maker or exchange. Our wallets guide explains how custodial and self-custody wallets differ in who handles that.
• Be wary of hype in both directions. Quantum risk is a real engineering problem being worked on in the open. It isn't a reason to panic-sell, and it isn't a selling point for a coin that claims to be "quantum-proof." We don't make price predictions.

What to watch

• Developer discussion of BIP-360 and its rivals: whether one output type gains enough support to move toward being turned on.
• Signature-scheme evaluations: which quantum-resistant algorithms Bitcoin developers prefer, and how they handle block space and fees.
• The dormant-coin debate: any concrete proposal to freeze, rate-limit or rescue exposed coins would be one of the most contested changes in Bitcoin's history.
• Wallet support: announcements from hardware and software wallet makers once a design is settled.

The takeaway

A major custodian has publicly called for Bitcoin's quantum migration to begin now and has set out what it needs, while leaving the hardest governance question open. For everyday holders, the practical steps are dull but effective: keep your software updated, don't reuse addresses, and never hand your seed phrase to anyone promising a "quantum upgrade." New to Bitcoin? Start with what Bitcoin is and how it works. This is education, not financial advice, current as of October 20, 2026.

Published October 20, 2026 by Dave McNaught. Educational content, not financial, legal or tax advice. Spot an error? Request a correction.

About the author

Dave McNaught

Dave McNaught has worked in IT since 1999 and founded All Business Technologies (ABT) in 2003, a Boston-area firm providing Managed IT, Cybersecurity, Managed AI, Web Design and App Development. He publishes The Crypto Guide.

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