Zcash developers are aiming to introduce quantum-resistant signature features in January as concerns grow over the potential for AI-assisted attacks to threaten cryptocurrency wallet security. The planned upgrade targets transparent transactions, which account for approximately 70% of ZEC in circulation. A separate wallet feature is also being developed to keep balance checks from exposing links between addresses.
Roman Akhtariev, an engineer working on Zakura, a software implementation used to run the Zcash network and validate transactions, shared the timeline in an engineering update.
The team intends to introduce post-quantum signature opcodes in January, Akhtariev said. These instructions would enable Zcash to verify hash-based signatures, a cryptographic method designed to withstand attacks from quantum computers. However, the target remains tentative, with no confirmed date for activating the upgrade across the network.
The proposed technology is intended to prevent attackers from using exposed public keys to derive private keys, forge spending approvals and steal cryptocurrency.
The new system would rely on cryptographic hashes, which act as digital fingerprints generated from secret information, to verify transaction signatures. Because hash-based signatures use a different authorization mechanism, compromising conventional wallet keys would not automatically compromise the proposed replacement.
Using a new address can help keep a public key hidden until funds are spent. The planned signature upgrade aims to provide additional protection when a transaction reveals 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.” In a worst-case scenario, he warned, AI could help uncover a way to break the mathematical protections securing Bitcoin and Ethereum wallets “in months, not years.”
Ethereum’s broader shift toward quantum-resistant cryptography is currently targeted for December 2029. No practical attack against the cryptographic keys protecting these wallets has been demonstrated so far.
ZEC ended Thursday near $1,185, losing around 11% over the previous seven days. The cryptocurrency recorded one of the sharpest declines among major digital assets after Drake’s warning gained traction on X.
Read more: Bitcoin and ether holders urged to prepare ‘bunker mode’ against possible AI attacks.
Zcash targets public transactions and address privacy
Zcash offers two types of transactions: shielded transfers, which conceal the sender, recipient and amount, and transparent transfers, which publicly display addresses and transaction values, similar to Bitcoin (BTC).
CoinDesk’s calculations based on ZecStats data showed that approximately 11.96 million of the 16.98 million ZEC issued were held in the transparent pool on Thursday. This represents roughly 70% of the total supply and explains why the proposed January upgrade focuses on the network’s public transactions.
Wallets use private keys to authorize transactions and corresponding public keys to verify those approvals. Deriving a private key from its public counterpart is intended to require an impractical amount of computing power. Drake’s concern is that technological advances could eventually make such attacks financially viable.
A standard transparent Zcash address initially hides its public key behind a cryptographic hash designed to be difficult to reverse. When funds are spent, the public key becomes visible. Transferring the remaining balance to a fresh address places the funds behind a new key that has not yet been exposed.
However, checking balances across multiple addresses can create another privacy risk.
A user who distributes funds across 10 addresses still needs to retrieve each balance. A conventional wallet may send those requests to a server, potentially allowing the service to connect addresses that appear unrelated on the blockchain.
Zakura’s balance-lookup tool uses private information retrieval, a technique that allows a database to return requested information without learning which specific record the user wants.
This approach lets a wallet check its balances without revealing a readable list of its addresses to the server. While the transactions themselves remain public, the balance-checking process can disclose less information about which addresses belong to the same person.
An experimental version is already available through the “Private queries” setting in the Vizor Zcash wallet.
Shielded transactions require separate protections. According to Zcash’s quantum-recovery design, an attacker who obtains a recipient’s address could store encrypted payment records now and attempt to decrypt them later if a future mathematical breakthrough makes that possible.
