BitGo introduces quantum protection for institutional Bitcoin wallets

BitGo plans to introduce new quantum-protection security tools for Bitcoin wallets, the company said Thursday.

The technological development is specifically aimed at helping institutions "assess, manage, and reduce quantum-related exposure" across UTXO-based Bitcoin wallets, according to a statement.

"The launch expands BitGo's long-standing multi-signature security architecture with new operational tools for managing wallet-key exposure, improving UTXO handling, and strengthening institutional wallet operations as the industry prepares for a post-quantum future," BitGo also said.

While the future potential risks posed to Bitcoin by quantum computing are worth taking seriously, some experts argue that the cryptographic tools needed to protect digital assets against quantum threats already exist. They contend that the greater risk may be a failure to implement them in time rather than a lack of technical solutions.

"BitGo is investing in the foundation required for a post-quantum future for our clients," BitGo co-founder and CEO Mike Belshe said. "We believe the safest key is one whose public key has never been revealed onchain. These capabilities give institutions a practical way to understand and reduce quantum exposure while continuing to rely on the proven security of multi-signature."

As far as Unspent Transaction Outputs, or UTXOs, are concerned, they are individual pieces of bitcoin that exist in a wallet. While almost all Bitcoin wallets are UTXO-based, managing quantum risk is more complicated in these wallets.

BitGo said the new tools it expects to introduce in the coming weeks include a new method — which the company has a provisional patent application for — that "groups and prioritizes UTXOs by address" to reduce security risks caused by partially spent funds. The new patent does not cover funds held in address types that expose a public key from the outset, such as Taproot or Pay-to-Public-Key, which require separate security measures, the company also said.

Last month, Coinbase's Independent Advisory Board on Quantum Computing and Blockchain pointed out in a report that around 7 million bitcoin sit in addresses exposed to a future quantum attack.

"We believe institutions do not need to wait for a quantum event to begin managing quantum risk," Belshe also said. "The right approach is to reduce exposure now, harden wallet operations, and prepare for the migration from today's security models to future post-quantum standards."