Bitcoin Researchers Pitch Quantum Fix Without Sacrificing Block Space

The SHRINCS proposal would enable Bitcoin transactions to use larger quantum-resistant signatures while preserving more block capacity than many existing post-quantum alternatives.

Researchers at Blockstream, a Bitcoin infrastructure company whose engineers have worked on the blockchain’s core software for more than a decade, published the SHRINCS proposal on Thursday. The design aims to protect Bitcoin transactions against future quantum computers without significantly limiting the number of transactions that can be included in each block.

Bitcoin currently relies on digital signatures based on elliptic-curve cryptography to prove ownership. These signatures allow users to demonstrate control of the private key associated with their bitcoin without exposing the key itself.

The concern is that a sufficiently advanced quantum computer running Shor’s algorithm, a method developed in 1994 for efficiently solving certain mathematical problems, could eventually compromise this protection.

A quantum computer capable of doing so could potentially use a public key exposed on the blockchain to derive the corresponding private key. An attacker could then create a fraudulent signature and spend the associated bitcoin.

A significant amount of BTC is already held at addresses where public keys have been exposed, either because of the design of older address types or because funds from those addresses have previously been spent. This includes more than 1.1 million BTC associated with Bitcoin’s pseudonymous creator, Satoshi Nakamoto, as reported by CoinDesk in July.

SHRINCS Addresses the Signature-Size Challenge

Replacing Bitcoin’s current signatures with post-quantum alternatives creates a major capacity issue. Signature schemes standardized by the U.S. National Institute of Standards and Technology (NIST) can be many times larger than Bitcoin’s existing signatures. Because each block has limited space, larger signatures mean fewer transactions can fit into a block.

Blockstream estimates that Bitcoin could handle roughly 6.5 transactions per second if all transactions used today’s compact Schnorr signatures. That figure could fall to around 0.36 transactions per second if transactions instead used SLH-DSA, the hash-based post-quantum scheme standardized by NIST.

SHRINCS improves that figure to approximately three transactions per second. Its signatures begin at about 324 bytes, compared with 64 bytes for Schnorr signatures, and increase by roughly 16 bytes with each additional key use. Under the proposed configuration, transaction throughput remains around three transactions per second with signatures of about 580 bytes.

The increase in signature size does not translate directly into an equivalent increase in block-space consumption because SegWit, Bitcoin’s 2017 upgrade, provides a discount for the portion of a transaction containing signatures.

SHRINCS relies on SHA-256, the same hashing algorithm already widely used throughout Bitcoin, including its mining process. This means the proposal does not require Bitcoin to adopt an entirely new mathematical foundation for its security.

Jonas Nick, who developed SHRINCS alongside fellow Blockstream researcher Mikhail Kudinov, described it as the first concrete post-quantum signature design created specifically for Bitcoin.

However, Nick emphasized that SHRINCS is not necessarily intended to become Bitcoin’s final signature solution and does not outperform every alternative across all criteria.

SHRINCS generates a new one-time key each time a wallet signs a transaction. This requires wallets to track previously used keys and ensure that none are reused accidentally. That information would also need to remain synchronized across smartphones, hardware wallets and backup copies. Losing the key-use record or restoring an outdated wallet backup could make spending funds more complicated.

The technology is still at an early stage. The proposal notes that its formal security proof has yet to be completed, while the reference implementation has not received a formal security audit and is not suitable for production use.

Blockstream previously demonstrated SHRINCS-signed transactions in March on Liquid, its separate blockchain designed to allow Bitcoin and other assets to move between participants with greater speed and privacy.

Deploying SHRINCS directly on Bitcoin would require a soft fork, meaning a backward-compatible modification to the network’s rules. It would also require sufficient support from the Bitcoin ecosystem for the change to be activated.

The proposal arrives as Ethereum researchers are pursuing a similar direction. Earlier this week, they proposed changes to the validator deposit system that could eventually allow the network to support new types of cryptographic keys.

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