What to Know

  • Blockstream researchers published a proposal on Thursday for SHRINCS, a Bitcoin transaction signing method designed to withstand quantum computers.
  • The proposal addresses a future risk in which a sufficiently powerful quantum computer could derive a private key from a public key visible on the blockchain.
  • Quantum-safe signatures approved by NIST could reduce Bitcoin throughput from roughly 6.5 transactions per second to under one because larger signatures consume more block space.
  • SHRINCS is designed to keep Bitcoin capacity near roughly three transactions per second, with signatures starting at about 324 bytes compared with 64 bytes for Schnorr.
  • The design uses SHA-256, the same hash function already used throughout Bitcoin, including in mining.
  • The draft does not yet include a completed formal security proof, and its reference software is not intended for production use.
  • Bringing SHRINCS to Bitcoin would require a soft fork and enough network-wide agreement to activate the change.
  • The proposal warns that moving certain keys between incompatible wallets can lead to loss of funds.

Bitcoin Researchers Target Quantum Risk Without Overloading Blocks

Bitcoin researchers at Blockstream have proposed SHRINCS, a new way to sign Bitcoin transactions that aims to prepare the network for a future in which quantum computers could threaten today’s cryptographic protections. The proposal is notable because it tries to solve two problems at once: making signatures resistant to quantum attacks while avoiding a severe reduction in the number of transactions that can fit into Bitcoin blocks.

Bitcoin ownership depends on digital signatures. In ordinary use, a spender proves control over coins by producing a valid signature tied to a private key, while the private key itself remains hidden. The system rests on elliptic-curve cryptography, a branch of mathematics that ordinary computers cannot feasibly reverse at the scale needed to steal coins. That assumption could be challenged if a sufficiently powerful quantum computer were able to run Shor’s algorithm, a method introduced in 1994 that is theorized to let quantum machines solve certain mathematical problems far faster than classical computers.

The risk is specific and serious. If a public key is visible on the blockchain, a future quantum attacker with enough capability could potentially work backwards to calculate the corresponding private key. With that private key, the attacker could forge a valid signature and spend the coins. This does not mean such an attack is happening today, and the proposal itself is framed around preparation for a future threat. But Bitcoin’s long settlement horizon makes the issue important for holders, developers, wallet makers, miners, and infrastructure firms.

Why Public Key Exposure Matters

A large amount of Bitcoin already sits at addresses where public keys have been exposed. That can happen because of how older address formats were constructed or because coins at certain addresses have already been spent from, placing the public key on-chain. The issue has drawn special attention because more than 1.1 million bitcoin associated with the network’s pseudonymous creator, Satoshi Nakamoto, are among the coins considered exposed in this sense.

For most Bitcoin users, the immediate takeaway is not that funds are suddenly unsafe, but that the network has to think carefully about any future migration to quantum-resistant signing. The challenge is not simply picking a cryptographic tool that is believed to withstand quantum attacks. Bitcoin has tight block-space limits, strong compatibility concerns, conservative upgrade norms, and a global user base that must avoid mistakes during any transition.

That is where SHRINCS enters the debate. The proposal was designed by Blockstream researchers Jonas Nick and Mikhail Kudinov. Nick described it as the first concrete post-quantum signature proposal built specifically for Bitcoin, while also emphasizing that it is not intended to be Bitcoin’s final signature system and does not outperform every alternative on every measure. That framing matters: SHRINCS is being presented as a practical Bitcoin-oriented design for discussion, testing, and review, not as a finished upgrade ready for immediate activation.

The Block-Space Problem Behind Quantum-Safe Signatures

The biggest obstacle to replacing Bitcoin’s current signatures is size. Post-quantum signatures standardized by the U.S. National Institute of Standards and Technology, known as NIST, can be dozens of times larger than the compact signatures Bitcoin uses today. Because Bitcoin blocks have limited space, larger signatures mean fewer transactions can be included. In an environment where block space is already economically valuable, a major increase in signature size would carry network-wide consequences.

Blockstream estimated that if every Bitcoin transaction used today’s compact Schnorr signatures, the network could process around 6.5 transactions per second. By contrast, using SLH-DSA, a hash-based scheme standardized by NIST, would reduce that figure to about 0.36 transactions per second. That drop highlights the trade-off facing developers: quantum-resistant cryptography may offer stronger long-term protection, but if implemented inefficiently, it could sharply reduce Bitcoin’s practical throughput.

SHRINCS seeks a middle path. Its signatures start at about 324 bytes, compared with 64 bytes for Schnorr. The signatures grow by around 16 bytes each time a key is used, and the configuration discussed by the researchers reaches roughly three transactions per second using 580-byte signatures. In other words, SHRINCS signatures are substantially larger than current Schnorr signatures, but they are designed to preserve much more network capacity than bulkier post-quantum alternatives.

The size impact is also softened by SegWit, the Bitcoin upgrade activated in 2017. SegWit gives a discount to the part of a transaction that holds signatures, meaning a signature that is five times larger does not necessarily consume five times as much effective block capacity. That detail is central to why SHRINCS can be larger than Schnorr while still maintaining throughput far above some standardized post-quantum options.

Why SHA-256 Is Central to the Design

SHRINCS is built using SHA-256, the same hash function used throughout Bitcoin, including in the network’s mining system. That choice is important because it avoids relying on an entirely new underlying mathematical assumption. In Bitcoin, where changes are often scrutinized for long-term safety and simplicity, building on a primitive already deeply embedded in the protocol can make a proposal easier for technical reviewers to evaluate.

Hash-based approaches are often discussed in post-quantum cryptography because their security assumptions are different from the elliptic-curve systems threatened by Shor’s algorithm. The use of SHA-256 does not remove every implementation risk, and it does not by itself make the proposal ready for deployment. But it does place SHRINCS within a familiar Bitcoin design philosophy: prefer well-understood primitives, minimize unnecessary complexity, and avoid introducing avoidable trust in new mathematical structures.

Wallets Would Face New Operational Demands

SHRINCS would not be invisible to wallet infrastructure. The design uses a fresh one-time key whenever a wallet signs a transaction. That means wallets must carefully track which keys have already been used and prevent accidental reuse. The record of used keys would need to remain correct across phones, hardware wallets, backups, and recovery workflows.

This requirement introduces practical challenges. Restoring an old wallet copy, losing key-use information, or moving certain keys between incompatible wallets could make spending more difficult or, in some warned cases, lead to loss of funds. For a system like Bitcoin, where self-custody and backup reliability are core features, these operational details are not secondary. A quantum-safe signature scheme must not only be cryptographically sound; it also has to be usable safely by ordinary participants and wallet providers.

Market participants and technical traders tend to focus on price, but protocol-level work like SHRINCS speaks to Bitcoin’s deeper infrastructure cycle. The network’s value proposition depends on the durability of its settlement layer, and any path toward quantum resistance would likely require years of discussion, testing, wallet coordination, and education before users could confidently move funds under new rules.

Still Early and Not Production Ready

The SHRINCS proposal remains early. Its formal security proof has not been completed, and the reference software has not undergone a formal security audit. The software is not intended for production use. Those caveats are significant because cryptographic systems demand unusually high assurance before real funds are placed at risk.

Blockstream has already demonstrated SHRINCS-signed transactions on Liquid in March. Liquid is a separate blockchain operated by Blockstream that allows bitcoin and other assets to move between participants more quickly and privately. A demonstration on Liquid is useful for experimentation, but it is not the same as activating a change on Bitcoin itself.

For SHRINCS to reach Bitcoin, the network would need a soft fork, meaning a backwards-compatible change to Bitcoin’s rules. Even with that technical path, activation would require enough support across the network. Bitcoin upgrades typically move slowly because miners, node operators, developers, businesses, wallet providers, and users all have incentives to avoid rushed changes. That conservatism is especially relevant for a change that touches transaction validity and long-term coin security.

Part of a Broader Post-Quantum Push

The proposal arrives as other major blockchain communities are also exploring post-quantum readiness. Ethereum researchers moved in a similar direction earlier this week, proposing changes to the system validators use to deposit funds so it can eventually accept new types of cryptographic keys. The details differ, but the broader theme is the same: public blockchains are beginning to plan for a future in which existing signature systems may need to evolve.

For Bitcoin, the debate is likely to remain cautious and technical. SHRINCS offers a concrete design focused on Bitcoin’s constraints, especially block-space efficiency, but it also highlights the difficulty of any quantum-safe migration. The network must weigh security assumptions, transaction capacity, wallet complexity, user safety, and activation politics. FXCOINZ will continue monitoring how developers, researchers, and market participants evaluate the proposal as the post-quantum conversation moves from theory toward engineering.

Frequently Asked Questions (FAQs)

What is SHRINCS?

SHRINCS is a proposed Bitcoin transaction signature method designed to resist future quantum-computer attacks while preserving more block capacity than some larger post-quantum signature alternatives.

Who proposed SHRINCS?

SHRINCS was proposed by Blockstream researchers Jonas Nick and Mikhail Kudinov. Blockstream is a Bitcoin infrastructure firm whose engineers have contributed to Bitcoin core software for more than a decade.

Why would Bitcoin need quantum-resistant signatures?

Bitcoin’s current signature system relies on elliptic-curve cryptography. A sufficiently powerful quantum computer running Shor’s algorithm could theoretically derive a private key from a public key visible on the blockchain, allowing forged signatures.

How does SHRINCS compare with Schnorr signatures?

SHRINCS signatures start at about 324 bytes, while Schnorr signatures are 64 bytes. The proposal says SHRINCS can still preserve roughly three transactions per second under the discussed configuration because of its design and the signature discount introduced by SegWit.

How much could some post-quantum signatures reduce Bitcoin capacity?

Blockstream estimated that Bitcoin could process around 6.5 transactions per second with today’s compact Schnorr signatures, but about 0.36 transactions per second with SLH-DSA, a hash-based scheme standardized by NIST.

Is SHRINCS ready for use on Bitcoin today?

No. The proposal does not yet have a completed formal security proof, its reference software has not undergone a formal security audit, and the software is not intended for production use.

What would be required to activate SHRINCS on Bitcoin?

SHRINCS would require a soft fork, which is a backwards-compatible change to Bitcoin’s rules. It would also need enough support across the network before activation could occur.

What risks would wallets need to manage under SHRINCS?

Wallets would need to track one-time keys carefully and ensure they are not reused. The proposal also warns that moving certain keys between incompatible wallets can lead to loss of funds.

Does SHRINCS solve every post-quantum issue for Bitcoin?

No. Jonas Nick has described SHRINCS as a concrete proposal built specifically for Bitcoin, but not as the final signature system or the best option on every measure. It remains an early design for review and discussion.

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