Quantum Use Case #70: Quantum-secure crypto wallets

Short answer: This use case involves migrating digital asset custody from classical elliptic curve signatures to post-quantum cryptographic standards to withstand future quantum attacks. It is an active area of development, and several companies say they are building or launching products, but those claims come from the vendors and are not independently verified here.

The Quantum Threat to Current Wallets

Current cryptocurrency wallets predominantly rely on elliptic curve digital signature algorithms (ECDSA) or Ed25519 for securing funds. Researchers and industry participants have noted that a sufficiently large quantum computer could break these classical signature schemes. The risk is not limited to active transactions; attackers can copy public keys from the blockchain now and break them later. Consequently, funds do not need to move for the risk to begin, creating a "harvest now, decrypt later" vulnerability for assets secured by classical keys.

Post-Quantum Cryptographic Standards

To address this threat, developers are turning to post-quantum cryptography (PQC), specifically NIST's standards. Two signature schemes are cited in recent wallet developments: SPHINCS+, standardised by NIST as SLH-DSA in FIPS 205, and Falcon, which NIST selected for standardization as FN-DSA. FIPS 206, the standard for Falcon, is still in development, so check NIST for its current status. These algorithms are designed to remain secure against attacks from quantum computers. By building on these schemes, developers aim to ensure that self-custody remains viable in a post-quantum world.

Hardware Wallet Implementations

Trezor has introduced the Safe 7, which it describes as the world's first quantum-ready hardware wallet. This is the vendor's own description. This device protects its critical internal functions against quantum threats today. However, it is explicitly noted that the device is not "quantum-proof" because full protection requires that the blockchains themselves also upgrade to post-quantum systems. The hardware wallet serves as a step toward ensuring that physical key storage is not the weak link in digital asset security as the industry transitions to post-quantum systems.

Software and Smart Contract Wallets

qLABS, which describes itself as a quantum-native crypto foundation, has announced an upcoming smart contract wallet called Quantum-Sig, which it says is designed to protect smart-contract-based assets from future quantum attacks. This launch is associated with a strategic alliance between qLABS and 01 Quantum. Additionally, Claak operates as a self-custodial crypto wallet where funds are controlled by a post-quantum key, checked on-chain. Claak is built on SPHINCS+ and Falcon, emphasizing that other wallets depend on keys a future quantum computer could break.

Research-Stage and Operational Considerations

While these wallets are being developed and some are announced for launch, the broader ecosystem remains in transition. The effectiveness of a quantum-secure wallet is contingent on the underlying blockchain infrastructure. If the blockchain protocol does not upgrade to support post-quantum signatures, the wallet's protection is partial. Therefore, these implementations represent a necessary but not sufficient condition for full quantum security. Users should view current quantum-ready wallets as preparatory measures that mitigate specific risks associated with key management, while the full realization of quantum-secure crypto requires coordinated upgrades across the entire stack, from hardware to protocol.

FAQ

What specific cryptographic standards are being used?

Developers are using SPHINCS+ (standardised as SLH-DSA in FIPS 205) and Falcon (selected by NIST as FN-DSA; FIPS 206 is still in development). These are chosen because they are designed to resist attacks from quantum computers, unlike the ECDSA or Ed25519 standards currently used by most wallets.

Is a quantum-ready wallet fully secure against quantum attacks?

No. Hardware wallets like the Trezor Safe 7 protect internal functions against quantum threats but are not considered "quantum-proof" in isolation. Full protection requires that the blockchains also upgrade to post-quantum systems. Without protocol-level upgrades, the wallet addresses key management risks but does not eliminate all quantum vulnerabilities in the transaction lifecycle.

Which assets are targeted by these new wallets?

qLABS says its Quantum-Sig wallet is designed to protect smart-contract-based assets across several blockchains. Claak focuses on self-custodial crypto wallets generally, ensuring that funds controlled by post-quantum keys are checked on-chain. The goal is to secure any smart-contract-based value against future quantum attacks.

Why is the "harvest now, decrypt later" attack relevant?

This attack vector is relevant because attackers can copy public keys from the blockchain immediately and break them later once a sufficiently large quantum computer is available. Since funds do not need to move for the risk to begin, classical wallets are vulnerable even if no transaction is currently taking place. Post-quantum wallets mitigate this by using keys that cannot be broken by quantum algorithms.

What is the role of hardware in this transition?

Hardware wallets, such as the Trezor Safe 7, play a critical role by ensuring that the physical storage of keys is not the weak link in digital asset security. By protecting critical internal functions against quantum threats, these devices take the first step into a future where self-custody lasts into a post-quantum world, aligning with the principle that users should hold their own keys.