In short
- Companies are building quantum-resistant wallets ahead of blockchain upgrades.
- Approaches range from MPC upgrades to layer 2 overlays.
- Experts say user behavior and coordination remain weaknesses in the rollout of quantum upgrades.
Crypto companies are working to secure their wallet and custody offerings against a future quantum computing threat, aiming to upgrade user-facing infrastructure faster than blockchains can change their core protocols.
The shift reflects a growing view that network-level upgrades to blockchains like Bitcoin and Ethereum can take years, leaving wallets exposed in the meantime. And the timeline for the alleged ‘Q-Day’ threat to crypto could come sooner than expected, with one recent estimate putting it as early as 2030.
One company working to bring post-quantum security to crypto wallets is Silence Laboratories, which said it has added support for distributed (or multi-party computation (MPC)) signatures using ML-DSA, a cryptographic algorithm selected by the National Institute of Standards and Technology (NIST).
Jay Prakash, CEO and co-founder of Silence Laboratories, said the company’s work follows recent developments in post-quantum cryptography, including NIST’s approval of three algorithms: SPHINCS+, Falcon and CRYSTALS-Dilithium.
Prakash said the company has spent the past six months evaluating algorithms for distributed signing systems used by custodians and institutional wallets.
“Not all SPHINCS+, Falcon and CRYSTALS-Dilithium will meet the criteria of multi-party computation (MPC) friendliness – whether they support efficient distributed transaction signing – and a potential fragmentation must also be taken into account, as each chain chooses a different scheme with its own optimization criteria, signature size or computational efficiency,” Prakash said.
The key, he added, is generated as shares across isolated nodes, and a signature is collectively produced without the key ever being reconstructed. That helps protect against the threat of quantum computers, which are estimated to be able to break current cryptography within a few years. And companies understand the need, Prakash added.
“Institutions are now connected to distributed signing,” he said. “Whether it’s a partner like BitGo or a bank building a digital assets practice, they all understand that keys can’t be in one place.”
MPC systems distribute private keys across multiple devices: a standard configuration for custodians and institutional wallets. Silence Laboratories said its approach is designed to work within that existing structure, allowing companies to upgrade without changing the way their systems work.
“Any bank or custodian with an existing MPC infrastructure can now migrate to a post-quantum MPC-based wallet, without changing their infrastructure,” said Prakash. “It’s a code upgrade. Then they have a post-quantum secure signing layer.”
The upgrade takes place at the wallet level, meaning users don’t need to take any action.
“A post-quantum wallet SDK gives institutions a clean upgrade path on the infrastructure they already use,” said Prakash. “No heavy architectural migration; they’re already using MPC. The developer could upgrade the algorithm in the library, and the end user – whether using a wallet like MetaMask or something else – would have the same experience, now post-quantum secure.”
The split reflects a wider divide in the industry’s approach to quantum risk. Some developers focus on wallet-level upgrades, while others argue that only protocol-level changes to the crypto networks themselves can fully protect users.
Other companies are tackling the problem in different ways. Developers behind a Postquant Labs wallet are building a system that adds quantum-resistant signatures to Bitcoin by using a separate smart contract layer, avoiding changes to the base protocol.
Similar ideas have been proposed, including work by StarkWare researcher Avihu Mordechai Levy, which replaces Bitcoin’s elliptic curve cryptography with hash-based signatures that work within the network’s existing rules. The design is described as a ‘last resort’ approach rather than a scalable solution, and can be very costly.
The challenge, however, is timing, and while quantum computers capable of breaking current cryptography do not yet exist, recent developments have experts focused on the timescale. That uncertainty drives companies to take early action, but wallet-level solutions have their limits.
“If wallets are upgraded to post-quantum and chains are not,” Prakash added, “it won’t work.”