Zcash Targets January for Quantum-Resistant Payments Amid Security Concerns

Zcash developers are planning to introduce quantum-resistant signature technology by January as concerns about AI-powered attacks raise questions about the security of cryptocurrency wallets. The proposed upgrade targets transparent transactions, which account for roughly 70% of ZEC in circulation. Developers are also working on a wallet feature that would allow users to check balances without revealing connections between their addresses.

Roman Akhtariev, an engineer contributing to Zakura, a software implementation used to operate the Zcash network and validate transactions, outlined the plan in an engineering update.

The team aims to introduce post-quantum signature opcodes in January, Akhtariev said. These instructions would enable the network to verify hash-based signatures, a cryptographic method designed to withstand attacks from quantum computers. However, January remains a target rather than a confirmed activation date.

The proposed upgrade is intended to stop attackers from using exposed public keys to derive private keys, forge spending authorizations and steal funds.

The system would rely on cryptographic hashes, which serve as digital fingerprints, to verify transaction signatures. This alternative approach is designed to provide protection even if advances in quantum computing undermine the security of conventional wallet keys.

Generating fresh addresses can help keep public keys hidden until funds are spent. The planned signature technology would add another layer of protection when transactions expose the keys used to authorize payments.

The announcement comes after Ethereum researcher Justin Drake urged cryptocurrency holders to prepare for a potential “bunker mode.” In a warning issued Thursday, he said AI could, in a worst-case scenario, help uncover a way to break the mathematical safeguards protecting Bitcoin and Ethereum wallets “in months, not years.”

Ethereum’s broader transition to quantum-resistant cryptography is targeting December 2029. So far, researchers have not demonstrated a practical attack capable of breaking the cryptographic keys used by these wallets.

ZEC ended Thursday at around $1,185, recording a decline of approximately 11% over the previous week. The token was among the weakest-performing major cryptocurrencies after Drake’s warning circulated widely on X.

Read more: Bitcoin and ether holders urged to prepare ‘bunker mode’ against possible AI attacks.

Zcash upgrade targets public transactions

Zcash supports two transaction types. Shielded payments conceal the sender, recipient and amount, while transparent transactions publicly reveal addresses and values, similar to Bitcoin (BTC).

CoinDesk’s calculations based on ZecStats data showed that approximately 11.96 million of the 16.98 million ZEC issued were held in the transparent pool on Thursday. That represents about 70% of the total supply, making transparent transactions the main focus of the planned January upgrade.

Wallets use private keys to approve transactions and corresponding public keys to verify those approvals. Deriving a private key from a public key is designed to require an impractical amount of computational power. Drake’s warning centers on the possibility that future technological advances could make such attacks viable.

A typical transparent Zcash address initially hides its public key behind a cryptographic hash. When funds are spent, the public key becomes visible. Moving any remaining funds to a newly generated address places them behind another key that has not yet been disclosed.

However, checking balances across multiple addresses can create a different privacy risk.

A user who spreads funds across 10 addresses still needs to retrieve each balance. Traditional wallet software may send these requests to a server, potentially allowing the service to link addresses that appear unrelated on the blockchain.

Zakura’s balance-lookup tool uses private information retrieval, a technique that allows a database to return requested information without learning which specific record the user wants.

With this approach, wallets can retrieve balances without sending the server a readable list of their addresses. Transactions remain publicly visible, but the balance-checking process can reveal less information about which addresses belong to the same user.

An experimental version is already available through the “Private queries” setting in the Vizor Zcash wallet.

Shielded transactions require a separate set of protections. Zcash’s quantum-recovery design warns that an attacker who obtains a recipient’s address could save encrypted payment records now and attempt to decrypt them in the future if a breakthrough makes that possible.