New Development in Quantum Protection for Bitcoin: Implications of BIP-360, 2026/03/31 10:00:34

The Bitcoin Improvement Proposal (BIP) 360 introduces a new type of transaction output: P2MR (Pay-to-Merkle-Root). This is aimed at reducing risks associated with quantum computing. Let’s examine what this approach entails and how it might impact the ecosystem.

The Quantum Threat to Bitcoin

Bitcoin is considered one of the most reliable systems for storing and transferring value. Its security is based on cryptographic algorithms that are resistant to classical computing. However, the advancement of quantum technology creates potential threats to this model.

The primary threat lies in the ability to recover the private key from the public key. Cryptographically Relevant Quantum Computers (CRQC) could theoretically solve this problem within a reasonable timeframe.

The vulnerability is not distributed evenly. The greatest risk applies to addresses where the public key has already been exposed—either initially or during transaction execution. Analysts estimate that this could affect millions of BTC, including early coins stored on outdated address types.

The issue has not only a technical but also an institutional aspect: it is necessary to preserve the core principles of the protocol while simultaneously mitigating risks associated with new technologies.

Problems to be Solved

The quantum threat can be reduced to specific types of attacks related to the use of keys and digital signatures. Two main scenarios are identified:

• Long exposure attacks, where the public key is already available on the blockchain;

• Short exposure attacks, where the key is available for a limited time, for example, in the mempool.

The first type is considered more likely in the early stages of quantum technology development, as it does not require instantaneous computation.

Consequently, the key task is to reduce the risks of such attacks while maintaining compatibility with the current network architecture.

The Essence of BIP-360

A BIP (Bitcoin Improvement Proposal) is a format for proposing changes to the protocol. BIP-360 aims to reduce risks associated with the long-term exposure of public keys.

The proposal introduces a new type of output that preserves the functionality of existing mechanisms but reduces the likelihood of key exposure when spending funds.

It is important to note that BIP-360 does not imply full quantum resistance. It does not implement post-quantum signature algorithms; rather, it addresses a narrower task—mitigating the most obvious risks.

Pay-to-Merkle-Root (P2MR)

The key element of BIP-360 is the new P2MR output type. Architecturally, it is similar to P2TR (Taproot) but excludes the scenario where the public key is exposed by default.

Taproot provides two ways to spend funds: via the key path or the script path. The first option is more efficient in terms of transaction size but leads to key exposure when spending funds.

P2MR completely excludes the key path. Instead, a Merkle tree root is used, and all logic is implemented via scripts. This allows:

• avoiding automatic key exposure;

• maintaining flexibility—multi-signatures, timelocks, and other scenarios remain available;

• limiting the time and conditions of key exposure.

Practical Changes

The implementation of BIP-360 could impact the ecosystem in several directions simultaneously.

First, a new type of address (presumably with the bc1z prefix) will appear, which users can choose for long-term storage.

Second, transactions will become larger. Using the script path requires transmitting the script and the Merkle proof, which increases data size and fees.

Third, infrastructure updates will be required. Wallets, exchanges, and services will need to add support for the new format.

The migration factor is also important: BIP-360 does not imply an automatic transition. Users must manually transfer funds to new addresses. This process will likely be gradual and take years, similar to what happened with SegWit and Taproot.

What BIP-360 Will Not Protect Against

BIP-360 has limitations. It does not protect against short-term key exposure attacks. Post-quantum signature algorithms would be required for that.

Additionally, the proposal does not affect existing UTXOs (unspent transaction outputs). This means that a significant portion of BTC located on old addresses remains vulnerable.

According to some estimates, this could involve approximately 1.1 million BTC from the Patoshi mining era. If such coins return to circulation, it could significantly impact the market.

Finally, the effectiveness of the solution depends on the coordination of network participants—developers, miners, services, and users.

Conclusion

BIP-360 represents a compromise approach to enhancing Bitcoin’s resilience against quantum threats. It does not require a radical restructuring of the protocol and is aimed at reducing specific vulnerabilities.

At the same time, the proposal does not solve the problem completely and can be viewed as one of the stages in the broader process of the crypto industry adapting to the development of quantum technologies.