TLDR
- El Salvador moved 6,286 Bitcoin ($686M) from one wallet to 14 separate addresses
- Move aims to protect against future quantum computing attacks on Bitcoin encryption
- Each new address contains maximum 500 Bitcoin to limit exposure risks
- Country claims daily Bitcoin purchases despite IMF restrictions since February 2024
- Quantum experts say practical threat to Bitcoin remains decades away
El Salvador has divided its national Bitcoin treasury across 14 different wallet addresses in response to potential quantum computing security risks. The move affects the country’s entire 6,286 Bitcoin reserve worth approximately $686 million.
The National Bitcoin Office announced the security upgrade on Friday. Officials cited growing concerns about quantum computers potentially breaking Bitcoin’s cryptographic protection in the future.
“Quantum computers have the theoretical capability to break public-private key cryptography using Shor’s algorithm,” the office explained on social media. The technology could expose Bitcoin addresses to attacks that reveal private keys and steal funds.
New Multi-Address Security Strategy
Under the updated system, no single address holds more than 500 Bitcoin. This distribution method reduces potential losses if quantum attackers compromise any individual wallet.
The previous setup kept all government Bitcoin in one address for transparency. Privacy experts have long recommended spreading cryptocurrency across multiple addresses for better security.
El Salvador’s approach follows established best practices in Bitcoin management. The country believes this preparation will help defend against future quantum computing developments.
President Nayib Bukele launched the national Bitcoin program in 2022. His administration announced plans to purchase one Bitcoin daily for the strategic reserve.
Conflicting Purchase Reports
Recent blockchain data shows El Salvador bought Bitcoin as recently as Sunday. However, this contradicts statements made to the International Monetary Fund in July 2024.
El Salvador’s finance minister and central bank president told the IMF that government Bitcoin purchases stopped in February 2024. This commitment was part of a loan agreement requiring the country to scale back cryptocurrency activities.
The Bitcoin Office continues announcing daily purchases on social media despite the IMF deal. Neither President Bukele nor his officials have directly addressed this contradiction.
Current quantum computers remain far from threatening Bitcoin security. Bernstein Research analysts estimate any practical quantum threat to cryptocurrency remains decades away.
The address migration represents El Salvador’s latest Bitcoin strategy development as the country maintains its position as the world’s first Bitcoin legal tender adopter.
