El Salvador has announced that the nation will be redistributing its Bitcoin reserves from a single wallet to multiple addresses. This move will ensure added security.
The country’s National Bitcoin Office (ONBTC) made a statement on X that said each new wallet will hold up to 500 BTC, and a public dashboard would make the full balance across these addresses transparent. It also stated that this development would align with the best practices in Bitcoin management, including safeguarding the holding against quantum computing threats.
“Quantum computers have the theoretical capability to break public-private key cryptography using Shor’s algorithm,” the statement said, “This cryptography underpins not only Bitcoin but also many daily systems like banking, email, and communications. When a Bitcoin transaction is signed and broadcast, the public key becomes visible on the blockchain, potentially exposing the address to quantum attacks that could discover private keys and redirect funds before the transaction confirms.”
The current method of reusing one address means that public keys are always being exposed to the public. This, in theory, gives a quantum attacker ample time to find private keys.
Setting a limit on how much money can be in each address makes quantum threats less likely because an unused Bitcoin address with hashed public keys stays safe. When an individual withdraws funds from a wallet, the public keys associated with that address become vulnerable to attack. Dividing up funds into smaller amounts makes the damage from a possible quantum attack less severe.
With El Salvador’s Bitcoin holding going to multiple addresses, individuals can keep an eye on many addresses with the Bitcoin Office’s public dashboard.
The Central American nation has been acquiring Bitcoin since 2021. It also made it a legal tender in 2021, a decision that was later reversed after IMF pressure. As of writing, the country holds 6,284.18 BTC. During the first week of August, the ONBTC announced that it was planning to introduce Bitcoin-only banks, building on President Nayib Bukele’s ongoing Bitcoin strategy.
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