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Willy Woo Warns Quantum Risk Threatens Bitcoin's Gold Advantage

On-chain analyst Willy Woo says markets are starting to price in the #quantum threat, putting 4 million lost $BTC and a 12-year valuation uptrend versus gold into question. The warning comes as quantum computing advances from a niche concern to a mainstream risk factor in institutional portfolios.

Woo argued in a Monday X post that markets had begun pricing in the risk of a future Q Day breakthrough, shorthand for the moment when a powerful enough quantum computer exists to break today's public key #cryptography. Roughly 4 million lost $BTC could be dragged back into play if a powerful quantum computer could derive private keys from exposed public keys, undermining part of Bitcoin's core scarcity narrative.

He estimated there was about a 25% chance that the network would agree to #freeze those coins via a hard fork, one of the most contentious issues in #Bitcoin governance today. According to blockchain researchers, the 4 million exposed coins represent around 25% to 30% of the $BTC supply and are held in addresses whose public keys are already visible on-chain.

Any move to freeze these coins would upend long-standing norms concerning fungibility, immutability, and property rights. Freezing the coins could provoke deep splits between those prioritizing backward-compatible fixes and those willing to rewrite rules to protect early balances.

With a 75% likelihood of the coins remaining untouched, investors should assume a non-trivial probability that an amount of $BTC equivalent to about eight years of enterprise accumulation would become spendable again, Woo said. It's a prospect already being priced in as a structural discount on Bitcoin's valuation versus gold for the next five to 15 years.

Woo's analysis suggests that Bitcoin's long-term tendency to gain purchasing power when measured in ounces of #gold is no longer in play.