El Salvador announced via The Bitcoin Office on X the country has moved its bitcoin into multiply wallets holding up to 500 BTC each. The move comes from concerns on quantum computers’ potential ability to crack SHA-256 encryption, the encryption standard bitcoin uses to secure wallets.

El Salvador believes breaking up their bitcoin reserve into multiple addresses reduces exposure due to public keys being broadcast on the bitcoin blockchain during transactions. However, the public keys will already be discovered when the bitcoin is sent to the new addresses. Perhaps their real strategy is having more time to mitigate quantum attacks when a single private key is compromised, allowing time to move the bitcoin from other addresses.

The Bitcoin Office states, “Quantum computers have the theoretical capability to break public-private key cryptography using Shor’s algorithm. This cryptography underpins not only Bitcoin but also many daily systems like banking, email, and communications. When a Bitcoin transaction is signed and broadcast, the public key becomes visible on the blockchain, potentially exposing the address to quantum attacks that could discover private keys and redirect funds before the transaction confirms.”

Many believe quantum computer threats are still far from a possibility, likely not being a concern until 2030. There is still time to mitigate the threat by upgrading the bitcoin code to use stronger encryption techniques, perhaps relying on the SHA-3 family of encryption. If quantum computing becomes a real threat, then all other basic financial systems will need to be made stronger along with the bitcoin code. This will involve a global effort on a scale that would make quantum computing threats less likely.