Bitcoin Researchers Design Quantum Shield While Keeping Transaction Space Intact

The SHRINCS proposal aims to give Bitcoin a quantum-resistant signing option while preserving more transaction capacity than several other post-quantum alternatives.

Blockstream researchers introduced SHRINCS on Thursday as a Bitcoin-specific method for signing transactions. The system is designed to defend against future quantum computing threats without causing a major decline in the number of transactions that can fit into each block.

Bitcoin currently uses elliptic-curve cryptography to secure transaction signatures. This allows users to prove ownership of BTC by demonstrating control of a private key without revealing the key itself.

However, sufficiently advanced quantum computers could eventually threaten this system. Shor’s algorithm could enable a quantum computer to solve the mathematical problems behind Bitcoin’s current cryptography much more efficiently than conventional machines.

If that becomes technically feasible, an attacker could potentially use a public key exposed on the blockchain to calculate its corresponding private key. The attacker could then create a valid signature and transfer the associated coins.

Some Bitcoin holdings are already stored at addresses where public keys have been exposed, either through older address formats or previous spending activity. This includes more than 1.1 million BTC attributed to Bitcoin’s pseudonymous creator, Satoshi Nakamoto.

SHRINCS Addresses the Post-Quantum Size Challenge

Moving Bitcoin to quantum-resistant signatures creates a block-space problem. Post-quantum signature schemes standardized by the U.S. National Institute of Standards and Technology are significantly larger than the signatures Bitcoin currently uses.

Because Bitcoin blocks have limited capacity, larger signatures would leave room for fewer transactions.

Blockstream estimates that Bitcoin could process around 6.5 transactions per second if every transaction used existing Schnorr signatures. Using NIST’s hash-based SLH-DSA scheme could reduce throughput to approximately 0.36 transactions per second.

SHRINCS aims to raise that capacity to around three transactions per second. Its signatures begin at roughly 324 bytes, compared with 64 bytes for Schnorr signatures, and increase by about 16 bytes each time another key is used. The proposed configuration can maintain approximately three transactions per second with signatures reaching about 580 bytes.

SegWit helps reduce the effect of larger signatures because Bitcoin’s 2017 upgrade assigns a lower effective weight to signature data. Therefore, a signature several times larger does not necessarily consume several times as much block capacity.

SHRINCS is also based on SHA-256, the same hashing function already used throughout Bitcoin, including its mining process. This means the proposal can rely on an established cryptographic primitive rather than introducing an entirely new mathematical foundation.

Blockstream researchers Jonas Nick and Mikhail Kudinov developed SHRINCS. Nick described the system as the first concrete post-quantum signature proposal designed specifically around Bitcoin.

The researchers do not claim it is the ultimate solution. SHRINCS involves trade-offs, and alternative schemes may offer advantages in certain areas.

The design also creates additional responsibilities for wallet software. Every transaction requires a fresh one-time key, meaning wallets must accurately track previously used keys and prevent them from being reused.

That information would need to remain synchronized across devices, hardware wallets and backups. Losing the record or restoring an outdated wallet backup could make spending the associated funds more complicated.

SHRINCS remains in the experimental stage. Its formal security proof is still pending, and the reference implementation has not undergone a formal security audit. It is therefore not intended for production use at this point.

Blockstream demonstrated SHRINCS-signed transactions on Liquid in March. Liquid is a separate blockchain operated by Blockstream that enables faster and more private transfers of bitcoin and other assets.

For SHRINCS to be implemented on Bitcoin’s main network, a soft fork would be required to introduce the necessary rule changes. The upgrade would also need sufficient support from the broader Bitcoin ecosystem to be activated.

The proposal comes as researchers working on Ethereum explore a related direction, with proposed changes to the validator deposit system that could eventually allow the network to support additional cryptographic key types.