- VanEck may pull out of Bitcoin if quantum computing cracks its encryption safeguards.
- Zcash’s rising value has drawn interest from Bitcoin users seeking stronger security against future quantum threats.
In an interview at CNBC, the CEO of VanEck Investments, Jan VanEck, revealed that the company will withdraw from Bitcoin if quantum computing breaks its encryption. VanEck currently oversees more than $1.2 billion in BTC through its spot exchange-traded fund, which began trading in early 2024.
He has also admitted that many in the Bitcoin community are questioning whether existing encryption can withstand the effects of quantum computing. Experts speculate that the speed at which it solves complex equations could pose a direct threat to Bitcoin and other digital assets soon.
These concerns have propelled many long-term investors to turn to privacy coins. One of the coins that falls under this category is Zcash. It uses encryption to ensure the confidentiality of the transactions. In recent times, the value of Zcash has risen by over 1300% due to its ability to secure transactions.
Zcash Readies for Quantum Impact
Zcash’s unique privacy design has made it a point of interest for users who no longer see BTC as the safest option in the face of advancing quantum threats. The network uses a cryptographic method distinct from Bitcoin.
Engineer Sean Bowe noted that if quantum computers reach the point where they can break current encryption, the impact could be dramatic. Attackers might release information about previous transactions or create fake coins on privacy-oriented blockchain platforms. In the case of Bitcoin, the main risk is theft of funds.
To prepare, Zcash has built what it calls a quantum recoverability system. This allows the network to pause and implement changes without losing user funds. Bowe expects the remaining wallet changes to complete the upgrade to quantum resistance to be ready next year.
Faster Protocol Shifts Set Zcash Apart from Bitcoin
As noted by Bowe, Zcash’s governance structure allows for faster upgrades than Bitcoin’s. Bowe pointed out that major updates on Zcash can be coordinated across the ecosystem in about one to two years. This involves independent groups and stakeholders. Bitcoin, due to its decentralized nature, faces greater difficulty reaching consensus on broad protocol changes.
Although Zcash is not yet safe from quantum attacks, Bow stressed that achieving that level is straightforward and within reach. He added that implementing the planned updates would not be a heavy burden for the team or the network.
Not all experts agree on when quantum computing will become a real threat. Cryptographer Adam Back says Bitcoin may still have twenty to forty years before quantum advances create real problems for it. That projection, if correct, allows sufficient time to upgrade.