‘We are in a 2-5 year shot clock’ to crack Bitcoin, warns billionaire C. Palihapitiya

Chamath Palihapitiya, the founder and CEO of venture capital firm Social Capital, has offered a possible timeline for when the Bitcoin (BTC) encryption might finally be cracked, given the ongoing advancements in quantum computing.

This projection follows Alphabet (NASDAQ: GOOGL), Google’s parent company, announcing the introduction of Willow, a quantum computing chip with 105 qubits.

Palihapitiya believes that the encryption framework underpinning Bitcoin—SHA-256—could be cracked in the next two to five years due to progress in quantum computing, he said during the All-In Podcast, published on December 13.

“I had to figure out how long it will take us to crack the encryption standards we use for Bitcoin. We need about 8000 chips to break SHA-256. We’re in the 2-5 year shot clock for chains reimplementing new hashing algorithms,” Palihapitiya said.

Willow, which Palihapitiya claims could accelerate the timeline for breaking the cryptographic standards that secure Bitcoin and other digital currencies, is a key development in this area.

While the technology to achieve this quantum computing level is still in its early stages, Palihapitiya suggested that the chip is a significant step toward achieving this capability. However, Palihapitiya acknowledged substantial challenges, particularly in scaling the technology, are still ahead.

The investor noted that Bitcoin and other blockchain networks must adapt rapidly, potentially reimplementing core cryptographic frameworks at a foundational level.

At the same time, Palihapitiya expressed optimism about the future of the cryptocurrency space, noting that advances in quantum computing could lead to the development of new encryption methods resistant to quantum attacks.

Debate on cracking Bitcoin

Interestingly, not all crypto sector players believe that quantum computing threatens Bitcoin. In an X post on December 14, Ki Young Ju, founder of onchain cryptocurrency analysis platform CryptoQuant, stated that Bitcoin is unlikely to be compromised within this decade.

On the other hand, some players view Satoshi’s early-mined Bitcoin as a possible vulnerability. To this end, computer scientist and Avalanche founder Emin Gün Sirer warned that Satoshi’s early-mined coins used the outdated Pay-To-Public-Key (P2PK) format, exposing the public key and giving attackers time to exploit it.

“As quantum computing becomes a threat, the Bitcoin community may need to consider freezing Satoshi’s coins or setting a sunset date to freeze all P2PK UTXOs,” Sirer warned.

Bitcoin’s reaction to quantum computing advancements

The Google development briefly spooked the market, with fear, uncertainty, and doubt (FUD) hitting the cryptocurrency community. This led to the liquidation of about $1.6 billion within 24 hours.

Meanwhile, Bitcoin has since recovered, reclaiming the $100,000 resistance level. As of press time, Bitcoin was trading at $102,203, gaining almost 0.7% in the last 24 hours. On the weekly timeframe, BTC is up over 4.6%.

In conclusion, while quantum computing poses a real threat to Bitcoin’s security, the community has time to adapt and implement the necessary resistance measures.

Featured image via Shutterstock

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