It’s been several years since I first asked whether the “battle for quantum supremacy” had already been lost. Since then, the quantum landscape has shifted from speculative arms race to high-stakes contest with immediate national security, economic, and geopolitical consequences. If you thought the stakes were high in 2017, buckle up — the quantum endgame is here, and the risks are more real than ever.
tl;dr: offensive quantum systems that break Bitcoin might already be out there.
The quantum arms race: no longer theoretical
Back then, the debate was whether quantum computers could ever break encryption or deliver practical advantage. Today, the question is how soon — and who gets there first. China’s massive $138 billion government-backed quantum fund, announced in 2025, is just the latest escalation in a global investment surge. U.S. quantum funding has exploded in response, with over $1.25 billion invested in Q1 2025 alone. The market is projected to hit $5.3 billion by 2029, but the real story is in the speed and scale of technical breakthroughs.
Technical milestones: from hype to reality
- Google’s Willow chip smashed previous records, using error correction to make quantum computing more reliable and completing calculations in minutes that would take classical supercomputers eons.
- Harvard’s logical quantum processor encoded 48 logical qubits, a leap toward practical, fault-tolerant quantum machines.
- IBM’s roadmap: 4,000 qubits by 2025, with fault-tolerant systems running 100 million gates by 2029.
Quantum attacks on encryption are no longer science fiction. Chinese researchers have already demonstrated quantum attacks on 50-bit RSA keys. While this is far from breaking modern encryption, it’s a proof-of-concept that the “harvest now, decrypt later” threat is real — and growing.
The quantum threat window: the encryption ticking clock
Here’s the uncomfortable reality: we have officially entered the window where quantum technologies — both those publicly acknowledged and those still classified — are in a position to break widely used encryption standards like RSA and ECDSA (the cryptographic backbone of Bitcoin and much of the world’s secure communications).
- Quantum computers have reached a threshold where, in theory, they can factor large integers and compute discrete logarithms — core operations underpinning RSA and ECDSA.
- Recent breakthroughs in quantum error correction and scaling have accelerated timelines far beyond what most experts predicted even a few years ago. The demonstration of quantum attacks on smaller-scale RSA keys is no longer academic; it’s a warning shot.
- “Harvest now, decrypt later” is no longer a hypothetical threat. State actors and sophisticated cybercriminals are actively collecting encrypted data with the expectation that it will be decrypted once quantum capabilities are sufficient.
Known vs. unknown capabilities
- Public quantum milestones — such as Google’s Willow chip and China’s quantum communication satellites — are only part of the story. The most advanced quantum technologies are likely classified, particularly those developed for military and intelligence use.
- It’s plausible that nation-states already possess quantum systems capable of breaking cryptographic standards, but are keeping these capabilities secret for strategic advantage.
How far into the window are we?
- No one can say with certainty how deep we are into this quantum threat window. The only consensus is that we are in it now.
- Indicators that the window is open:
- Successful quantum attacks on smaller encryption keys have been demonstrated in academic and government labs.
- Major governments have set aggressive deadlines (e.g., NSA’s 2035 mandate) for transitioning to quantum-resistant cryptography, signaling that they believe the threat is imminent.
- The pace of investment and secrecy around quantum programs has sharply increased, especially in China and the U.S.
Will we know if it happens?
If a quantum attack breaks RSA or ECDSA at scale, we may not know immediately. The first successful exploitations are likely to be covert, targeting high-value intelligence or financial systems. The public may only learn of these breaches long after the fact, if at all. The prudent move is to assume the window is open and act accordingly: accelerate the transition to quantum-resistant cryptography, monitor for signs of compromise, and prepare for a world where cryptographic trust can no longer be taken for granted.
Geopolitics: the quantum cold war
China’s quantum ambitions
China isn’t just competing — it’s integrating quantum into every lever of state power:
- Military-civil fusion: Quantum research is embedded in China’s military modernization. The PLA is developing quantum sensors for submarine detection, quantum navigation for GPS-denied environments, and quantum-secure communications.
- Quantum communications leadership: China’s national QKD network and quantum satellites make it the world leader in secure communications, with over 2,000 kilometers of quantum-encrypted fiber and the world’s first quantum satellite.
- Indigenous innovation: Facing Western export controls, China is building a self-reliant quantum ecosystem, from hardware to software, reducing dependency on foreign suppliers.
U.S. risks: the quantum threat matrix
- Encryption at risk: Quantum computers threaten to render today’s encryption obsolete. The U.S. faces the risk that adversaries are already stockpiling encrypted data, waiting to decrypt it once quantum is ready.
- Military edge eroding: Quantum sensing could make U.S. stealth technology vulnerable. Quantum navigation could enable Chinese forces to operate undetected in GPS-denied environments.
- Supply chain and talent shortages: The U.S. struggles to secure quantum supply chains and fill talent gaps, risking both innovation and security.
- Global technology divide: The race risks a world where a handful of nations — especially China and the U.S. — control the most powerful computation and communication tools, deepening global inequality and increasing the risk of technological surprise in future conflicts.
U.S. response: scrambling to catch up
- Export controls: The U.S. has imposed strict controls on quantum hardware and software, and banned investments in Chinese quantum firms.
- Post-quantum cryptography: The NSA has set a 2035 deadline for government-wide adoption of quantum-resistant encryption.
- Allied coordination: The U.S. is working with allies to keep quantum advances out of adversarial hands, while investing in domestic research and workforce development.
Commercialization: quantum goes mainstream
Quantum computing is no longer confined to research labs. Commercial sales hit $854 million in 2024, up 70% from the previous year. Real-world applications are emerging:
- Financial services: Quantum optimization for trading and risk modeling.
- Drug discovery: Quantum simulation for pharmaceutical breakthroughs.
- Materials science: Designing new materials for batteries and energy storage.
- Cybersecurity: Quantum key distribution for “unbreakable” communications.
The talent crunch
A new bottleneck has emerged: talent. There’s only one qualified candidate for every three quantum jobs. The skills gap threatens to slow progress, regardless of funding. The good news? More than half of industry jobs don’t require a PhD — upskilling from adjacent fields is working.
The ethical and strategic dilemma
Quantum’s rise brings new ethical and strategic risks:
- Resource inequality: Quantum capabilities are concentrating among a few nations and corporations.
- Transparency: Quantum algorithms are often black boxes, complicating accountability.
- Privacy: The ability to break encryption threatens fundamental privacy rights.
- Job displacement: Automation potential could disrupt entire industries.
The path forward: collaboration or confrontation?
Despite tensions, international collaboration continues — Europe’s Quantum Internet Alliance, U.S.-Singapore partnerships, and more. But the trend is toward militarization and restricted cooperation, especially as quantum becomes a pillar of national security.
Conclusion: the battle isn’t over — but the window is open
The “battle for quantum supremacy” hasn’t been won or lost. Instead, it’s evolved into a more complex, urgent, and consequential contest. China leads in government investment and quantum communications; the U.S. leads in private innovation and hardware (caveat — we think). The next five years will decide who turns quantum promise into quantum power.
But here’s the new reality: we are now living in the quantum threat window. The only question is how far in we are — and whether we’ll recognize the moment when the world’s encryption is truly broken. The future of national security, economic competitiveness, and even global privacy hangs in the balance. The only certainty? The battle is far from over — and the stakes have never been higher.
Originally published on Sultan Meghji’s Substack (July 22, 2025). Sultan Meghji is the founder of Virtova, Co-Founder and CEO of Frontier Foundry, and the inaugural Chief Innovation Officer of the U.S. FDIC.