Bitcoin miners are dealing with this triple-treat. ‘I’m a seven worried,’ says mining CEO

Bitcoin miners find themselves in a dicey situation. Not one, not two, but three threats are looming on the horizon.

By the day, quantum computing is becoming a bigger threat, endangering around 1.7 million Bitcoin that today are exposed to a super computer capable of breaking the protocol’s encryption.

That threat comes just as the undergirders of Bitcoin’s security mechanism, miners, are migrating en masse to artificial intelligence.

To top it all off, network activity is so scant that revenue for miners who remain online isn’t even remotely close to break-even.

“Long story short, it’s not great,” Nick Hansen, CEO of mining outlet Luxor, told DL News. “There isn’t a bullish catalyst for continued investment in new mining right now.”

“I’m a six to seven on the worried scale.”

Indeed, it’s a grim moment for the $1.5 trillion network. Bitcoin miners are the system’s bodyguards, protecting the nearly 20 million circulating coins. If quantum computing becomes reality, and miners are increasingly migrating their infrastructure to AI, it could be kaput — quick.

Quantum computing 

The number one looming threat is quantum computing and its inching closer by the day.

Quantum computers are super powerful devices capable of breaking Bitcoin’s underlying encryption. Up to 60% of the network’s entire supply is at risk of a malicious actor that, if they get their hands on a quantum computer, could drain wallets and get hold of about $800 billion in Bitcoin, according to Chaincode Labs.

Consensus among cybersecurity experts had the appearance of a quantum computer capable of breaking Bitcoin’s encryption anywhere between two and eight years. That was until March, when a research team at Google said quantum will be here by 2029.

Bitcoin investors, developers, and enthusiasts are now taking the threat seriously. Some of the newer proposals even include freezing quantum-exposed Bitcoin — including assets held by Bitcoin founder Satoshi Nakamoto — as a way to quell the threat.

AI pivot

In and of itself, quantum computing is a threat.

But if you tack on that a majority of Bitcoin miners are pivoting to AI, things have the potential of spiralling out of control.

For Bitcoin to be secure, especially long-term, it needs to have a robust security system. That means having as many miners as possible online, offering up as much computational power as possible to render an attack futile.

The opposite is happening. Every major US miner has already started their migration to AI as mining became deeply unprofitable following the last halving event which took place in 2024, Bernstein analysts said.

The halving is an event that occurs every four years and chops block rewards in half. The last one cut mining payouts to 3.125 Bitcoin per block.

In December 2024, Hansen told DL News that “resisting the urge to transition to AI” will be Bitcoin miners’ biggest challenge in 2026.

Scant activity

The last slap is network activity.

Since the arrival of Bitcoin exchange-traded funds, most of the activity that previously took place on Bitcoin — offering up miners a much-needed revenue stream in the form of transaction fees — has gone elsewhere.

Mostly, they’ve gone into the big institutions like BlackRock and its ilk whose arrival, ironically, was craved most by enthusiasts. Now they are placing an existential pressure on miners.

Hourglass

Hansen offered up a way out called Hourglass.

Right now, there’s around 1.7 million Bitcoin that are at risk, today, of a quantum computer, said Hansen. Hourglass proposes that instead of letting hackers dump all those coins on the open market at once, and crash Bitcoin’s price, create a limit that allows them to only steal 1 Bitcoin per block.

That’s around 144 Bitcoin per day.

Here’s the kicker: If multiple hackers are competing to steal the same coins, they’ll keep outbidding each other on transaction fees to get their loot confirmed first. And those fees go to Bitcoin miners.

By the time a hacker “wins” the auction, they’ve paid almost the entire value of the stolen Bitcoin in fees — meaning miners get the money instead of the hackers.

It would take roughly 32 years to drain all 1.7 million coins this way. During that time, miners get extra income, which helps keep Bitcoin’s network secure long-term.

“The coins are going to get stolen anyway,” Hansen said at the OPNEXT conference on April 16. “If they’re going to flow somewhere, maybe we let them flow to miners, who are the most incentive-aligned holders of Bitcoin.”

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.

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