El Salvador Splits $678M in Bitcoin Across 14 Wallets to Mitigate Quantum Computing Risk

El Salvador Moves Bitcoin Reserves for Added Security

El Salvador has transferred its 6,274 Bitcoin (BTC), worth approximately $678 million, into 14 new wallet addresses in a precautionary effort to safeguard against potential quantum computing threats.

According to the country’s Bitcoin Office, each address now holds a maximum of 500 BTC, significantly reducing the risk of a single point of failure.

“By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized,” the office explained in a post on X.

Source: Nick Neuman

Why Quantum Computing Raises Concerns

Bitcoin transactions remain secure until funds are spent from an address. Once a transaction is made, the public key becomes visible — theoretically making it vulnerable to quantum decryption in the future.

Project Eleven, a quantum research firm, warned in April that more than 6 million BTC (around $650 billion) could be exposed if quantum computers evolve to the point of breaking elliptic curve cryptography (ECC).

However, researchers stress that such capabilities remain far from reality. At present, no quantum computer running Shor’s algorithm has cracked even a 3-bit key, while Bitcoin’s private keys are 256-bit.

Industry Voices: Is the Threat Overblown?

While El Salvador’s move was applauded as a proactive step, some industry leaders believe the fear is overstated.

Michael Saylor, executive chairman of MicroStrategy, dismissed the immediate threat back in June:

“Quantum computing’s risk to Bitcoin is mostly hype. If it ever became serious, developers and hardware makers would upgrade the Bitcoin network — just like Microsoft, Google, or the U.S. government update their systems.”

Read More: El Salvador Continues Bitcoin Accumulation Despite IMF Pressure

This sentiment reflects the broader consensus that while quantum security is a valid long-term concern, the technology is still decades away from challenging Bitcoin’s cryptography.

El Salvador’s Bitcoin transfers into 14 new Bitcoin addresses.Source: Mempool.space

Blockchain Data Confirms Transfers

On-chain activity shows that El Salvador moved its entire Bitcoin reserve from a single wallet into the new set of 14 addresses on Friday. The redistribution marks the first significant restructuring of the nation’s Bitcoin treasury since its adoption of BTC as legal tender in 2021.

IMF Tensions Continue

The decision comes amid ongoing disputes with the International Monetary Fund (IMF) over El Salvador’s Bitcoin strategy.

In July, the IMF reported that the government had not made any new BTC purchases since February, despite continued posts from the Bitcoin Office highlighting acquisitions.

El Salvador previously secured a $1.4 billion deal with the IMF in December 2024, reportedly conditioned on scaling back its Bitcoin initiatives — a stipulation that appears to remain under negotiation.

Outlook: A Future-Proof Move or Overreaction?

El Salvador’s redistribution of its Bitcoin holdings illustrates a forward-looking approach to digital asset security. While experts argue that quantum computers are not yet capable of threatening Bitcoin, the move may serve as a model for other institutional holders considering long-term risk mitigation strategies.

Whether quantum computing becomes a real threat or remains a distant concern, El Salvador is positioning itself as a country willing to prepare early for the future of crypto security.

Read More: Metaplanet Surpasses El Salvador in Bitcoin Holdings With $129M Purchase

FAQs

1. Why did El Salvador split its Bitcoin into 14 wallets?

El Salvador redistributed its $678M Bitcoin holdings across 14 wallets to minimize single-point risk against potential quantum computing threats.

2. How much Bitcoin does El Salvador currently hold?

The country holds 6,274 BTC, valued at around $678 million at the time of the transfer.

3. Is quantum computing a real threat to Bitcoin security?

Experts say quantum computers are still decades away from breaking Bitcoin’s cryptography, but precautionary steps like this add extra security.

4. How does splitting wallets protect against quantum risks?

By limiting each wallet to 500 BTC, the impact of a potential attack is reduced, making funds harder to compromise in bulk.

5. How does this decision affect El Salvador’s relations with the IMF?

The move comes amid IMF tensions, as the organization has pushed El Salvador to scale back its Bitcoin strategy despite its continued adoption.