Recently, news of the BIP 360 update and the introduction of P2MR (Pay-to-Merkle-Root) was announced on the official Bitcoin GitHub repository. Is this a sign that Bitcoin is yielding to the massive threat of quantum computing? Or is it a significant milestone showing how it has begun to prepare for future threats? Today, we will take a deep dive into BIP 360, the new emerging security standard for Bitcoin.
1. A 'Quantum Alarm' for the Bitcoin Network
1) The Official GitHub Merge of BIP 360 and Its Significance
A BIP (Bitcoin Improvement Proposal) is an 'official proposal' that determines the direction of the massive ship that is Bitcoin, covering protocols, network rules, and wallet standards.
The fact that BIP 360 has been merged into the official repository means that the core Bitcoin developer community has officially defined the threat of quantum computing as a practical issue and formalized technical discussions to resolve it.
This means it has moved beyond a mere community idea to become an official candidate for a 'standard' for Bitcoin improvement. Furthermore, BIP 360 proposes a new output type called P2MR (Pay-to-Merkle-Root), which is the first protocol-layer change in Bitcoin's history designed with 'quantum resistance' as its top priority. While this merge doesn't mean Bitcoin will change overnight, it suggests that the foundation for the upcoming 'Post-Quantum Cryptography' era has begun.
2) Why Discuss 'Quantum Resistance' Now?
Looking at the NASDAQ or listening to so-called experts, it might seem like the world is already dominated by quantum computers, but only a fraction has actually been realized. In this context, one might think, "Isn't quantum computing still a distant story?" However, the reason we need to discuss it now is because of 'time asymmetry.'
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Expiration Date of Encryption: The Elliptic Curve Digital Signature Algorithm ($ECDSA$) used today could be neutralized once quantum computers are sufficiently developed. It may take several years to upgrade the Bitcoin network and for all users to move their assets to secure addresses.
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Protecting Long-term Holders (HODLers): For investors holding for 10 years or more, the quantum threat is a real-time risk. It will be too late to fix it after the threat has arrived.
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Proactive Market Trust: Global Big Tech companies like Google and IBM, along with the U.S. NIST (National Institute of Standards and Technology), are already building quantum-resistant standards targeting the 2030s. Bitcoin must not lag behind these security standards to maintain its value as 'digital gold.'
3) Key Keyword of BIP 360: A Taste of P2MR
P2MR (Pay-to-Merkle-Root) is essentially a "technology that hides the core of the lock (the public key) inside a vault." The current Taproot (P2TR) method has a path (Key-path spend) where the 'public key' can be exposed during a transaction. Quantum computers can reverse-track this exposed public key to find the private key; P2MR perfectly complements this vulnerability.
P2MR completely removes this vulnerable path. Instead, it hides all information behind a hash value called the Merkle Root. Since hash functions are extremely difficult for even quantum computers to crack, it is a strategy to hide the public key itself so that an attacker cannot even find the 'target' (the public key) to attack. A major advantage is that it maintains existing Tapscript functionality while adding a much thicker layer of security.
2. How Quantum Computers Threaten Bitcoin
1) The Public Key Trap: The Fear of Shor's Algorithm
Bitcoin's security is based on a mathematical challenge: 'It is easy to create a public key (account number) from a private key (password), but the reverse is impossible.' This is called Elliptic Curve Cryptography ($ECDSA$).
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Supercomputers vs. Quantum Computers: To reverse-track a Bitcoin private key ($256$ bits = $2^{256} \approx 10^{77}$) with a modern supercomputer would take longer than the age of the universe.
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The Rise of Shor's Algorithm: However, a quantum computer with sufficient Qubits ($Qubit$) running Shor's Algorithm could solve this complex mathematical problem in an instant. In other words, if the public key is exposed, anyone could calculate your private key.
2) The Most Vulnerable Addresses: Who is the First Target?
Not all Bitcoin addresses are equally at risk. The targets for quantum computers are 'addresses where the public key is clearly revealed on-chain.'
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P2PK (Pay-to-Public-Key): Used in the early days of Bitcoin (Satoshi Nakamoto's era). The address itself contains the public key, making it the easiest prey for quantum computers. Most of the coins presumably held by Satoshi are in this format.
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Address Reuse: Modern addresses (like P2PKH) only expose a 'hash' value, which is a twisted version of the public key. However, once you send coins from that address, your public key is revealed to the network. If you keep the remaining balance in the same address, it becomes defenseless against quantum attacks.
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Taproot (P2TR): Taproot, the latest major update, has a path (Key-path) that directly exposes the public key for efficiency. Ironically, this most advanced address type has become more vulnerable to quantum threats.
3) "Your Bitcoin Becomes a Target the Moment You Transfer It"
Many think, "I'm safe because I use modern addresses and don't reuse them." However, a fatal vulnerability occurs 'at the very moment you hit the send button.'
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Exposure of the Public Key: When you send Bitcoin, the network requires your public key to verify that the transaction is legitimate.
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Mempool Waiting Time: Before a transaction is included in a block (usually around 10 minutes), the public key stays in a waiting area called the Mempool.
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Quantum Interception: An attacker with a high-speed quantum computer could snatch your public key from the mempool and instantly calculate the private key. They could then create a transaction that diverts the coins to their own wallet by setting a higher fee than yours, ensuring their transaction is recorded in the block first.
This is exactly why the Bitcoin network must proactively equip itself with quantum resistance.
3. What is P2MR (Pay-to-Merkle-Root)?
P2MR, proposed in BIP 360, is essentially a "technology that erases the 'target' itself that a quantum computer would attack."
1) Evolution of Taproot: The Achilles' Heel of 'Key-path'
Taproot (P2TR), the latest Bitcoin standard, is highly efficient. It uses the Key-path method to "send simply without complex conditions," saving data and reducing fees. However, this Key-path method has the fatal flaw of exposing the user's public key on-chain when proving the transaction. As explained earlier, a quantum computer can reverse-calculate the private key from this exposed public key. Security was partially traded for efficiency.
2) Core Mechanism of P2MR: "You Cannot Attack What You Cannot See"
P2MR inherits the structure of Taproot but boldly modifies the parts exposed to quantum threats.
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Removal of Key-path: P2MR disables the 'Key-path' payment method where the public key is directly revealed.
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Focus on Script Path: All payment conditions are hidden within a data structure called a Merkle Tree, and only the resulting 'Merkle Root' hash value is stored in the address.
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Reduction of Attack Surface: It is practically impossible for even a quantum computer to find the original (public key) from a hash value. From an attacker's perspective, they won't even know where the 'lock' is to break it, making the attack itself impossible.
3) Coexistence with Existing Infrastructure: Smooth Transition Without a 'Hard Fork'
What makes P2MR brilliant is that it doesn't require a dangerous 'hard fork'—a total overhaul of the Bitcoin network.
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It allows the use of Tapscript, the smart contract language used in existing Taproot, so developers don't need to learn a new language.
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It is a clever strategy that prepares for future threats without harming the stability of the Bitcoin ecosystem by adding new functions while respecting existing rules.
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P2MR doesn't complete perfect quantum resistance on its own; it acts as the foundation to easily port 'Post-Quantum Cryptography (PQC)' algorithms like ML-DSA (Dilithium) or SLH-DSA (SPHINCS+) to Bitcoin in the future.
4. The Future of Bitcoin: Toward the Post-Quantum Cryptography (PQC) Era
1) Next Steps: Introduction of Next-Generation Signature Algorithms
Once the foundation is laid, powerful locks that quantum computers cannot break will be installed on top of it.
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ML-DSA (Dilithium): A Lattice-based encryption algorithm and the strongest candidate to replace $ECDSA$. It is fast, proven secure, and has been adopted as a NIST standard.
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SLH-DSA (SPHINCS+): A Hash-based signature method that serves as an excellent backup plan in case lattice-based encryption is ever cracked.
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Hybrid Strategy: Bitcoin is considering a method that uses both existing encryption and new PQC algorithms simultaneously, creating a double-locking system where the assets remain safe even if one is compromised.
2) The Fate of 'Dormant Coins': What Happens to Satoshi's Coins?
One of the most heated debates concerns the treatment of Dormant Coins. Early Bitcoins, including those potentially held by Satoshi Nakamoto, often have their public keys exposed on-chain.
If the owners do not appear to upgrade them, they are at high risk of theft once quantum computers become active. Developers are exploring proposals like 'Hourglass,' which could forcibly isolate dormant coins into quantum-resistant addresses or limit transfer speeds (Rate-limiting) to prevent attackers from taking large amounts of coins all at once.
3) Aligning with Global Security Standards: The 2030 Guidelines
Bitcoin's move is not an isolated journey but aligns with global security trends.
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CNSA 2.0 (U.S. NSA): The National Security Agency recommends transitioning major systems to quantum-resistant cryptography by 2030.
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NIST Standardization: With PQC standards being finalized by late 2024, Bitcoin aims to accept these standards before the 2030s to maintain its credibility as 'digital gold.'
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2035 Deadline: As the U.S. government plans to completely phase out existing $ECDSA$ by 2035, Bitcoin's BIP 360 is a very timely preparation.
BIP 360 Merge is Not a Declaration of Defeat, But the Start of Preparation
Seeing the news that BIP 360 has been 'merged' into the GitHub repository, one should not misunderstand that Bitcoin rules are changing immediately. According to Firemarkets, there is no need for excessive fear regarding wallet hacking yet.
This merge simply means that the proposal is worth technical review and has been recorded as one of Bitcoin's official improvement roadmaps. Actual activation will require the consensus of node operators and miners worldwide, along with extensive testing. However, without this first step, there is no future. BIP 360 is a significant declaration that the Bitcoin community has accepted the future threat as an 'official task.'
💡 One-line Review
Quantum computing will not be the end of Bitcoin, but a catalyst for its next level of evolution. BIP 360 and P2MR are the prologue to that great evolution.