The SHRINCS proposal is designed to give Bitcoin access to larger quantum-resistant signatures while using block space more efficiently than several existing post-quantum signature schemes.
Blockstream researchers published the proposal on Thursday, outlining a transaction-signing system intended to protect Bitcoin from future quantum attacks without dramatically reducing the number of transactions that can be processed per block.
Bitcoin currently uses digital signatures based on elliptic-curve cryptography to establish ownership. These signatures let users prove they control the private key for their bitcoin without exposing the key itself.
The long-term concern is that a powerful enough quantum computer could use Shor’s algorithm to defeat this cryptographic protection. The algorithm, introduced in 1994, could allow quantum machines to solve certain mathematical problems far more efficiently than conventional computers.
If that capability becomes practical, an attacker could potentially derive a private key from a publicly visible Bitcoin public key. That could enable the attacker to produce a valid signature and move the associated funds.
Some bitcoin is already stored at addresses with exposed public keys, either because of the structure of older address types or because those addresses have previously been used to spend funds. This includes more than 1.1 million BTC associated with Bitcoin creator Satoshi Nakamoto, according to CoinDesk reporting in July.
SHRINCS Tackles the Post-Quantum Size Problem
Moving Bitcoin to post-quantum signatures presents a significant scalability challenge. NIST-standardized post-quantum signatures can be substantially larger than the signatures Bitcoin uses today. Since blocks have a fixed capacity, larger signatures reduce the number of transactions that can be included.
Blockstream estimates that Bitcoin could process roughly 6.5 transactions per second if every transaction used compact Schnorr signatures. Using NIST’s hash-based SLH-DSA instead could reduce throughput to about 0.36 transactions per second.
The SHRINCS design raises that estimated capacity to around three transactions per second. Its signatures begin at approximately 324 bytes, compared with 64 bytes for Schnorr signatures, and increase by about 16 bytes with each additional key use. At a configuration using signatures of roughly 580 bytes, the system could still support around three transactions per second.
SegWit helps limit the impact of larger signatures because Bitcoin’s 2017 upgrade applies a discount to the portion of a transaction containing signature data. As a result, a signature that is several times larger does not consume an equivalent multiple of block space.
Another feature of SHRINCS is its use of SHA-256, the hashing function already embedded throughout Bitcoin and used in the mining process. The proposal therefore relies on a cryptographic primitive that Bitcoin already uses rather than introducing an entirely new mathematical assumption.
Jonas Nick and fellow Blockstream researcher Mikhail Kudinov developed SHRINCS. Nick described the proposal as the first concrete post-quantum signature scheme specifically designed around Bitcoin’s requirements.
He also cautioned that SHRINCS should not necessarily be viewed as Bitcoin’s eventual final signature technology, as it does not offer the best performance across every metric.
The system uses a new one-time key each time a wallet signs a transaction. Wallet software would therefore need to maintain an accurate record of which keys have already been used and prevent accidental reuse. That information would have to remain consistent across devices, hardware wallets and backups. Losing the record or restoring an outdated wallet could make it more difficult to spend funds.
SHRINCS remains experimental. Its formal security proof has not yet been completed, and its reference implementation has not undergone a formal security audit. The software is therefore not intended for production use.
Blockstream demonstrated SHRINCS transactions in March on Liquid, a separate blockchain operated by the company that supports faster and more private transfers of bitcoin and other assets.
Using SHRINCS on Bitcoin itself would require a soft fork, or a backward-compatible change to the network’s rules. Activation would also depend on sufficient support throughout the Bitcoin ecosystem.
The proposal comes shortly after Ethereum researchers explored a related approach, proposing changes to the network’s validator deposit mechanism that could eventually enable support for additional cryptographic key types.
