TLDR
- El Salvador moved 6,274 BTC into 14 wallets, each capped at 500 BTC.m
- The move protects Bitcoin from future quantum computing decryption threats.
- Wallet diversification aligns with multi-sig and hardware wallet practices.
- Public dashboard shows wallet transfers to maintain full transparency.
The country, which holds over $678 million worth of Bitcoin, has made the move to defend against possible quantum computing threats. By splitting its holdings into smaller amounts across multiple wallets, officials say the goal is to lower security risks without losing transparency.
El Salvador Government Moves 6,274 BTC Into 14 Separate Wallets
El Salvador’s Bitcoin Office confirmed that the country has moved all of its 6,274 BTC, valued at around $678 million, into 14 different wallets. Each wallet holds no more than 500 BTC. This is a shift from the country’s earlier practice of keeping the entire reserve in a single wallet.
The transfers were completed as part of a new digital asset management strategy. Officials stated that reducing the amount held in each address makes it harder for future technologies, such as quantum computers, to compromise national reserves.
BTC Office shared that the strategy is based on the way Bitcoin addresses reveal their public keys. “The reserve is being redistributed into multiple addresses, each holding up to 500 BTC. Limiting funds in each address reduces exposure to quantum threats because an unused Bitcoin address with hashed public keys remains protected,” officials said in a public dashboard post.
When Bitcoin is sent from an address, the public key is made visible, increasing exposure to potential cryptographic attacks. By spreading funds, El Salvador aims to limit this exposure and reduce the risks that come when public keys are revealed.
Security Experts Say Strategy Follows Industry Best Practices
According to security experts, splitting the Bitcoin into separate wallets helps prevent a single point of failure. This practice, they say, matches widely used protections like multi-signature authentication, hardware wallet usage, and access controls.
Multi-signature (multi-sig) setups require more than one key to approve a transaction. This prevents one compromised device or person from accessing all the funds. In addition, segregating the keys across devices and locations helps protect reserves even in the event of a breach or failure.
Experts also pointed out that a public display of wallet activity, like El Salvador’s dashboard, adds transparency. However, the actual control over each wallet remains secured by government-held private keys and operational policies.
Quantum computing remains a theoretical risk, but one that some countries are preparing for. Algorithms such as Shor’s could, if developed further, break encryption methods like those used in Bitcoin’s security layers. El Salvador’s approach reduces the time frame attackers would have to act if they ever gain that level of computational power.
Part of a Larger Bitcoin Strategy Linked to Infrastructure and Partnerships
This step comes as part of El Salvador wider digital finance policy. The country recently announced a $1.6 billion port development deal with Turkish firm Yilport Holdings. The ports will be near the proposed Bitcoin City, which is central to the government’s long-term crypto plans.
El Salvador also partnered with Pakistan last month to explore new public-sector applications for blockchain and cryptocurrency. The government continues to pursue these projects despite ongoing scrutiny from the International Monetary Fund.
Earlier this year, President Nayib Bukele confirmed that while Bitcoin purchases had paused, the portfolio had grown. At one point, El Salvador recorded a 124% gain, with total Bitcoin holdings reaching a value of $644 million.
Officials say that other countries may consider similar steps as they begin exploring Bitcoin reserves. Clear wallet management and risk controls may help build trust in national digital asset strategies.
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