Zcash (ZEC) developers are targeting January to introduce quantum-resistant signature technology, as growing concerns about AI-powered attacks raise questions about the future security of cryptocurrency wallets. The planned protections focus on transparent transactions, which hold approximately 70% of ZEC in circulation. Developers are also working on a wallet feature designed to prevent balance checks from revealing connections between different addresses.
Roman Akhtariev, an engineer working on Zakura, a software implementation used to operate and validate transactions on the Zcash network, outlined the timeline in an engineering update.
“Our team plans for post-quantum signature opcodes to land in Zcash in January,” Akhtariev wrote.
The proposed instructions would allow the network to verify hash-based signatures, a cryptographic method intended to remain secure against quantum computing attacks. January is the development team’s target, but an official network activation date has not yet been confirmed.
The upgrade aims to stop attackers from using exposed public keys to derive private keys, forge transaction authorizations and gain access to users’ funds.
Under the proposed system, transactions would be authorized through signatures verified using cryptographic hashes, which act as digital fingerprints derived from secret information. This approach offers an alternative to conventional signature systems that could eventually become vulnerable to sufficiently powerful quantum computers.
An attacker would need to compromise the underlying hash functions to forge an authorization. Consequently, a breakthrough against existing wallet-key systems would not automatically undermine the proposed replacement.
Generating fresh addresses can also help protect public keys before funds are spent. The new signature mechanism is intended to strengthen security when a transaction exposes the key used to authorize it.
The announcement follows a warning from Ethereum researcher Justin Drake, who urged cryptocurrency holders on Thursday to prepare for a potential “bunker mode.” He cautioned that, in a worst-case scenario, AI could help uncover a way to break the mathematical protections securing Bitcoin and Ethereum wallets “in months, not years.”
Ethereum’s wider transition to quantum-resistant cryptography has a target date of December 2029. So far, however, no practical attack has been demonstrated against the cryptographic keys securing these wallets.
ZEC finished Thursday trading near $1,185, down roughly 11% over the previous week. The token recorded one of the steepest declines among major cryptocurrencies after Drake’s warning spread across X.
Read more: Bitcoin and ether holders urged to prepare ‘bunker mode’ against possible AI attacks.
Protecting public addresses and wallet privacy
Zcash supports two transaction types. Shielded transfers hide the sender, recipient and amount, while transparent transactions disclose addresses and transaction values on the blockchain, much like Bitcoin (BTC).
CoinDesk’s calculations using ZecStats data showed that approximately 11.96 million of the 16.98 million ZEC issued were held in the transparent pool on Thursday. That represents around seven out of every 10 coins, making transparent transactions the main focus of the January upgrade plan.
A cryptocurrency wallet uses a private key to authorize spending and a corresponding public key to verify the authorization. Deriving the private key from the public key is designed to be computationally impractical. Drake’s warning centers on the possibility that future technological advances could make such attacks more affordable.
In a standard transparent Zcash address, a cryptographic hash initially conceals the public key. When the address spends funds, the public key becomes visible. Moving any remaining balance to a newly generated address places the funds behind another key that has not yet been revealed.
However, repeatedly checking balances across newly generated addresses can expose information about the wallet owner.
For example, a user who divides their holdings among 10 addresses still needs to check the balance of each one. Traditional wallet software may request this information from a server, potentially allowing the server to identify addresses that belong to the same user despite appearing unrelated on the blockchain.
Zakura’s proposed lookup tool uses private information retrieval, a technique that enables a database to provide specific information without learning which record the user requested.
This allows wallets to retrieve balances without sharing a readable list of their addresses with the server. Although the transactions remain public, the process of checking balances can reveal less information about the relationship between different addresses.
An experimental version of the feature is already available through the “Private queries” setting in the Vizor Zcash wallet.
Shielded transactions present a separate challenge. Zcash’s quantum-recovery design warns that an attacker who obtains a recipient’s address could save encrypted transaction records today and attempt to decrypt them in the future if advances in computing or mathematics make that possible.
