El Salvador’s Bitcoin Reserve Redistribution
El Salvador has redistributed its Bitcoin reserve holdings into 14 new wallet addresses as a precaution against possible quantum computing threats.
“By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized,” El Salvador’s Bitcoin Office stated in an X post on Friday, noting that each Bitcoin (BTC) address contains up to 500 BTC.
The Bitcoin Office elaborated that once funds are spent from a Bitcoin address, its public keys become exposed and susceptible — rendering it a target for quantum computers to crack, should this technology advance into a significant threat in the future.
According to quantum research firm Project Eleven, more than 6 million Bitcoin — valued at approximately $650 billion — could be at risk if quantum computers develop the capability to crack elliptic curve cryptography (ECC) keys.
Previously, El Salvador had maintained its 6,274 Bitcoin holdings (worth $678 million) in a single address; however, blockchain data indicates that these funds were moved to 14 new addresses on Friday.
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While this action has received praise from industry experts, Project Eleven emphasized that quantum computing is still far from possessing the ability to hack Bitcoin. A Bitcoin private key consists of 256-bits, and no quantum computer utilizing Shor’s algorithm has been able to successfully crack even a 3-bit key thus far.
Michael Saylor, the strategist behind Strategy’s Bitcoin playbook, remarked in June that the threat posed by quantum computing to Bitcoin is largely exaggerated, adding that if it ever becomes a significant concern, core developers and hardware manufacturers would implement necessary solutions.
El Salvador’s Bitcoin acquisitions have stirred scrutiny following an International Monetary Fund report in July, which indicated that the Central American nation had not made any new Bitcoin purchases since February.
The country’s Bitcoin Office has not directly responded to these claims and continues to share updates about its Bitcoin purchases on X.
In December 2024, El Salvador secured a $1.4 billion funding deal from the IMF in exchange for reducing its Bitcoin initiatives, among other stipulations — though the agreement’s terms seem to be contested by both parties.
