The SHRINCS proposal offers Bitcoin a potential way to adopt quantum-resistant signatures without sacrificing as much transaction capacity as other post-quantum cryptographic options.
Researchers at Blockstream published the proposal on Thursday, presenting SHRINCS as a Bitcoin-specific signing method designed to withstand future quantum attacks while keeping block-space usage relatively manageable.
Bitcoin currently relies on elliptic-curve cryptography for digital signatures. This system allows users to demonstrate ownership of BTC by proving control of a private key without revealing the key itself.
The concern is that sufficiently advanced quantum computers could eventually undermine this security. Using Shor’s algorithm, a quantum machine could potentially solve the mathematical problems underlying Bitcoin’s current signatures much faster than traditional computers.
If such machines become powerful enough, an attacker could theoretically derive a private key from a public key that is visible on the blockchain. That could allow the attacker to create a legitimate-looking signature and transfer the funds.
The risk already applies to some existing bitcoin holdings because their public keys have been exposed through older address structures or previous spending activity. More than 1.1 million BTC linked to Bitcoin’s pseudonymous creator, Satoshi Nakamoto, is among the holdings reportedly affected by this exposure.
SHRINCS Targets the Quantum Signature Size Problem
One of the biggest challenges with moving Bitcoin to post-quantum cryptography is signature size. Many post-quantum schemes standardized by the U.S. National Institute of Standards and Technology (NIST) produce signatures considerably larger than Bitcoin’s current signatures.
Because Bitcoin blocks have limited capacity, replacing compact signatures with much larger ones could significantly reduce transaction throughput.
Blockstream estimates that Bitcoin could process approximately 6.5 transactions per second if all transactions relied on today’s Schnorr signatures. Under NIST’s hash-based SLH-DSA scheme, that capacity could drop to roughly 0.36 transactions per second.
SHRINCS is designed to improve that figure to about three transactions per second. Its signatures initially measure around 324 bytes, compared with 64 bytes for Schnorr signatures, and grow by approximately 16 bytes each time another key is used. With signatures reaching about 580 bytes, the proposed setup still targets throughput of roughly three transactions per second.
SegWit, Bitcoin’s 2017 scaling upgrade, reduces the impact of the larger signatures by applying a discount to signature-related transaction data. As a result, increasing signature size does not translate directly into the same proportional increase in block-space consumption.
SHRINCS also uses SHA-256, a hashing algorithm that Bitcoin already depends on for several functions, including mining. The approach therefore avoids introducing an entirely new cryptographic foundation into the network.
Jonas Nick and Blockstream researcher Mikhail Kudinov developed SHRINCS. Nick described the system as the first concrete post-quantum signature proposal built specifically with Bitcoin in mind.
However, the researchers do not present SHRINCS as a definitive long-term solution. The design involves trade-offs and may not be the strongest option across every performance or security metric.
A key operational requirement is that SHRINCS uses a fresh one-time key for every transaction signature. Wallets would have to carefully track which keys have already been used and ensure that they are never reused. Maintaining that information across smartphones, hardware wallets and backup files could introduce additional complexity.
An outdated wallet backup or lost key-use information could potentially make spending funds more difficult.
SHRINCS is also still in the research phase. Its formal security proof remains incomplete, while the reference implementation has not received a formal security audit and is not ready for production deployment.
Blockstream previously tested SHRINCS-signed transactions on Liquid in March. Liquid is a separate blockchain operated by Blockstream that supports faster and more private transfers of bitcoin and other assets.
For SHRINCS to operate directly on Bitcoin, the network would need a soft fork to introduce the necessary rule changes. Successful activation would also require broad agreement and support from Bitcoin participants.
The proposal arrives as Ethereum researchers are exploring similar cryptographic upgrades. Earlier this week, they proposed changes to the validator deposit system that could eventually allow Ethereum to accommodate additional types of cryptographic keys.
