From ECDSA to ML-DSA: BTQ Technologies’ Quantum-Safe Bitcoin Testnet is a Game-Changer

Dr. Shahid Masood
3 days ago
6 min read

The rapid evolution of quantum computing presents both an unprecedented opportunity and a serious challenge for the global financial ecosystem. Among the most vulnerable targets is the $2 trillion Bitcoin network, whose cryptographic foundations—while robust against classical computing—face potential compromise from cryptographically relevant quantum computers (CRQCs). BTQ Technologies, a pioneer in post-quantum cryptography, has launched the Bitcoin Quantum testnet, a fully permissionless, production-grade fork of Bitcoin designed to explore quantum-safe transactions. This initiative represents a major milestone in securing the digital economy against emerging quantum threats.

The Quantum Threat to Bitcoin

Bitcoin’s security model relies on two cryptographic components: the Elliptic Curve Digital Signature Algorithm (ECDSA) and its proof-of-work (PoW) consensus mechanism. Classical computers ensure the feasibility of generating private keys remains computationally impractical; however, CRQCs could undermine this assumption in two primary ways:

Private Key Derivation from Public Keys: Quantum computers executing Shor’s algorithm can efficiently solve the discrete logarithm problem, enabling the derivation of private keys from publicly exposed keys on-chain.
Proof-of-Work Attacks: While less immediate, quantum acceleration in hash calculations could potentially disrupt mining and network consensus.

Chris Tam, Head of Quantum Innovation at BTQ Technologies, emphasized,

“Given a public key, a quantum computer could quickly calculate the private key and use it to steal funds, so the whole concept of security goes down the drain.”

These vulnerabilities are particularly acute in what is now called the “old BTC risk”, where legacy addresses, public-key reuse, and exposed elliptic-curve outputs create long-range exposure. For example:

Output Type	Share of UTXOs	Share of BTC Value	Notes
P2PK	0.025%	8.68% (~1.72M BTC)	Mostly dormant Satoshi-era coins
P2MS	1.037%	~57 BTC	Low value, multi-sig use
P2TR	32.5%	0.74% (~146k BTC)	Taproot key-path exposure

BTQ Technologies estimates 6.26 million BTC are at risk due to exposed public keys, underlining the urgency of post-quantum interventions.

Bitcoin Quantum Testnet: Technical Overview

Launched on January 12, 2026, BTQ’s Bitcoin Quantum testnet replaces ECDSA with Module-Lattice Digital Signature Algorithm (ML-DSA), the post-quantum cryptographic standard formalized by the U.S. National Institute of Standards and Technology (NIST) as FIPS 204. ML-DSA ensures that signatures remain resistant to quantum attacks while retaining familiar digital signature interfaces.

Key specifications and trade-offs of Bitcoin Quantum include:

ML-DSA Integration: Complete replacement of ECDSA for post-quantum security.
Increased Block Size: Raised to 64 MiB to accommodate ML-DSA’s larger signatures, which are 38–72 times the size of ECDSA.
Full Transaction Lifecycle Support: Wallet creation, transaction signing and verification, and mining functionality.
Accessible Infrastructure: Includes a block explorer at explorer.bitcoinquantum.com and a mining pool at pool.bitcoinquantum.com.

Olivier Roussy Newton, CEO of BTQ Technologies, stated,

“We’re providing a live, open environment where the industry can test, validate, and refine quantum-resistant solutions before the threat arrives.”

The Post-Quantum Cryptography Landscape

Post-quantum cryptography (PQC) represents a paradigm shift in securing digital assets against CRQCs. Unlike ECDSA, which relies on the assumed difficulty of the discrete logarithm problem, PQC algorithms such as ML-DSA leverage lattice-based mathematics, which currently show resilience against quantum attacks.

Advantages of ML-DSA for Bitcoin include:

Quantum Resistance: Preserves security against Shor’s algorithm.
FIPS 204 Standardization: Compliant with U.S. government mandates for national security systems.
Compatibility with Existing Protocols: Maintains a familiar interface while increasing computational robustness.

However, these benefits are accompanied by operational trade-offs:

Signature Size: Larger signatures require increased block space and higher bandwidth.
Performance Overhead: Transaction verification and mining may incur greater computational load.
Coordination Complexity: Deployment on mainnet requires community consensus and potential hard forks, which historically have faced resistance.

Old BTC Risk and Public-Key Exposure

The Bitcoin network’s immutable ledger presents a unique post-quantum challenge: once public keys are exposed, past transactions remain permanently vulnerable. Exposed keys occur through legacy address types, address reuse, and Taproot’s key-path design.

Long-Range Exposure: Existing public keys from historical outputs, particularly Satoshi-era coins, are susceptible to CRQCs.
Short-Range Exposure: Public keys revealed during transaction broadcast create a temporary vulnerability window.

As noted by BTQ, most quantum-threat models focus on transaction signatures rather than coin supply, emphasizing that the majority of risk is concentrated in already exposed public keys rather than randomly generated wallets.

Institutional and Governmental Imperatives

The urgency of post-quantum migration is reinforced by government mandates and investor concerns:

U.S. Department of Defense (Nov 2025): Required all DoD components to migrate to NIST-approved PQC by 2030, with legacy cryptography fully phased out by 2035.
NIST ML-DSA Standardization (Aug 2024): Establishes ML-DSA as the primary post-quantum digital signature standard.
NSA CNSA 2.0: Mandates ML-DSA for National Security Systems.
Institutional Investor Awareness: BlackRock, VanEck, and JPMorgan are actively disclosing quantum risk and investing in quantum-resilient solutions.

Delphi Digital’s December 2025 report positioned Bitcoin Quantum as a “quantum canary”, providing a production-grade environment for testing post-quantum security without compromising the mainnet.

Operational Considerations and Engineering Trade-Offs

Implementing ML-DSA introduces significant technical and operational challenges:

Block Space Management: ML-DSA signatures increase data requirements, necessitating a larger block size to prevent network congestion.
Transaction Throughput: Verification latency rises due to more complex mathematical computations.
Mining Economics: Larger blocks affect mining efficiency and fee structures.
Coordination Complexity: Achieving mainnet consensus for a post-quantum upgrade requires multi-year community alignment.

The BTQ testnet provides a controlled sandbox to measure these factors, allowing developers, miners, and researchers to identify performance and coordination challenges.

Comparative Analysis: ECDSA vs ML-DSA

Feature	ECDSA (Current Bitcoin)	ML-DSA (Bitcoin Quantum)
Security Against Quantum	Vulnerable	Post-quantum secure
Signature Size	64–72 bytes	2.5–5 KB
Block Space Requirement	Standard (~1 MB)	Increased (64 MiB limit)
Verification Complexity	Low	Moderate–High
Standardization	Industry Standard	NIST FIPS 204

This table underscores that transitioning to quantum-resistant cryptography is less a technical impossibility than an engineering coordination problem.

Future Outlook: Toward a Quantum-Safe Blockchain Ecosystem

BTQ’s Bitcoin Quantum testnet demonstrates that post-quantum adaptation is both technically feasible and strategically urgent. Looking ahead, several trends are likely to shape the industry:

Incremental Post-Quantum Migration: Gradual implementation through new address types and layered upgrades (e.g., BIP 360 Pay-to-Quantum-Resistant-Hash).
Institutional Adoption: Financial entities will demand quantum-safe transactions for high-value on-chain assets.
Hybrid Security Models: Integration of centralized PQC services alongside decentralized testnets ensures broad coverage for both enterprise and public blockchain users.
Operational Best Practices: Testing ML-DSA at scale informs wallet design, block propagation strategies, and transaction throughput optimization.

Chris Tam emphasizes, “We still have what is called a digital signature algorithm, but the mathematical problems underpinning this are moving from a discrete logarithm to a mathematical problem that is assumed to be difficult by a quantum computer.”

Economic Implications

Quantum risk introduces not only security concerns but also monetization opportunities:

Mining Pool Economics: BTQ operates a Bitcoin Quantum mining pool, capturing early block rewards and positioning the company to accumulate strategic BTQ tokens.
Security-as-a-Service: Institutions may pay for post-quantum verification, certification, and compliance layers.
Tokenized Asset Protection: With projected tokenized asset value exceeding $16 trillion by 2030, post-quantum infrastructure will become a critical enabler for secure digital finance.

Conclusion

The convergence of quantum computing and cryptocurrency security represents one of the most consequential technological challenges of the coming decade. BTQ Technologies’ Bitcoin Quantum testnet provides a vital sandbox for evaluating post-quantum cryptography in a Bitcoin-like environment, addressing public-key exposure, old BTC risk, and signature-size trade-offs. By leveraging ML-DSA and creating a fully permissionless, production-grade testnet, BTQ sets the stage for a future where digital assets remain secure even against quantum adversaries.

For stakeholders in digital finance, blockchain development, and cryptographic research, the lessons from Bitcoin Quantum are clear: quantum preparedness is both a technical and governance challenge. Strategic adoption of post-quantum algorithms, coupled with phased infrastructure upgrades, will define the resilience of cryptocurrency networks in the quantum era.

The expert team at 1950.ai, together with thought leaders like Dr. Shahid Masood, emphasizes that proactive adoption and rigorous testing of quantum-resistant solutions are imperative to maintaining trust, security, and continuity in global blockchain ecosystems.