The SHRINCS proposal would allow Bitcoin transactions to use larger, quantum-resistant signatures while preserving more network capacity than current post-quantum signature schemes.
Researchers at Blockstream, a Bitcoin infrastructure firm whose engineers have contributed to the blockchain’s core software for more than a decade, published a proposal Thursday for SHRINCS, a transaction-signing method designed to withstand quantum computers without significantly reducing the number of transactions that can fit into a block.
Bitcoin establishes ownership through digital signatures based on a mathematical field known as elliptic-curve cryptography. These signatures let users prove they possess the private key controlling their bitcoin without exposing the key itself.
However, researchers theorize that a sufficiently powerful quantum computer running Shor’s algorithm — the 1994 method that enables quantum machines to solve mathematical problems that could take conventional computers millions of years — could eventually break that protection.
Such a system could work backward from a public key visible on the blockchain to derive the corresponding private key, potentially allowing an attacker to forge signatures and spend the associated coins.
A significant amount of bitcoin already remains at addresses with exposed public keys, either due to the design of older addresses or because coins from those addresses have previously been spent. This includes more than 1.1 million bitcoin associated with the network’s pseudonymous creator, Satoshi Nakamoto, as reported in July.
A Potential Solution to the Size Problem
Replacing those signatures creates a significant size challenge. Post-quantum signatures standardized by the U.S. National Institute of Standards and Technology (NIST) can be dozens of times larger than Bitcoin’s current signatures, while blocks have limited capacity, meaning larger signatures leave less space for transactions.
Blockstream estimated that Bitcoin could handle roughly 6.5 transactions per second if every transaction used today’s compact Schnorr signatures, but throughput would drop to about 0.36 transactions per second with SLH-DSA, the hash-based scheme standardized by NIST.
SHRINCS brings that throughput back to roughly three transactions per second. Its signatures begin at around 324 bytes, compared with 64 bytes for Schnorr, and grow by about 16 bytes with each key use, with the configuration reaching three transactions per second at 580-byte signatures.
As a result, a signature that is five times larger does not consume five times as much block space because SegWit, introduced in 2017, provides a discount for the transaction data containing signatures.
SHRINCS relies on SHA-256, the same hash function already used across Bitcoin, including its mining system. This means its security does not require the introduction of an entirely new underlying mathematical assumption.
Jonas Nick, who developed SHRINCS alongside fellow Blockstream researcher Mikhail Kudinov, described it as the first concrete post-quantum signature proposal specifically designed for Bitcoin.
He added that SHRINCS is not meant to serve as Bitcoin’s final signature system and does not represent the best choice across every metric.
SHRINCS generates a new one-time key whenever a wallet signs a transaction. The wallet must therefore track previously used keys and ensure none are reused accidentally, with that record remaining accurate across phones, hardware wallets and backups. Restoring an older wallet copy or losing the key history could make spending more difficult.
The system remains in an early stage, however. The proposal notes that its formal security proof is still pending, while the reference software has yet to undergo a formal security audit and is not designed for production use.
Blockstream demonstrated SHRINCS-signed transactions on Liquid in March, a separate blockchain it operates that enables bitcoin and other assets to move between participants faster and with greater privacy.
Introducing SHRINCS to Bitcoin itself would require a soft fork, a backward-compatible change to the network’s rules, along with sufficient support across the network for activation.
The proposal comes as Ethereum researchers took a similar approach earlier this week, suggesting changes to the validator deposit system so it can eventually support new types of cryptographic keys.
