Zcash developers are targeting January for the introduction of quantum-resistant signature technology as concerns mount over the possibility of AI-assisted attacks compromising cryptocurrency wallets. The planned upgrade focuses on transparent transactions, which hold roughly 70% of ZEC’s circulating supply. Developers are also building a privacy tool that would allow wallets to check balances without revealing which addresses are connected.

Roman Akhtariev, an engineer working on Zakura, a software implementation used to run the Zcash network and validate transactions, outlined the timeline in an engineering post.

Akhtariev said the team intends to introduce post-quantum signature opcodes in January. These instructions would enable Zcash to verify hash-based signatures, which are designed to resist attacks from quantum computers. However, the timeline remains a target, and developers have not confirmed a network activation date.

The initiative aims to prevent attackers from deriving private keys from exposed public keys, forging transaction approvals and spending other users’ funds.

The proposed system would verify signatures through cryptographic hashes, which function as digital fingerprints generated from secret data. This approach offers an alternative to conventional signature mechanisms, potentially protecting transactions even if future advances undermine existing wallet-key security.

Fresh addresses can help keep public keys hidden until funds are spent. The planned signature protections are intended to secure transaction authorization even after spending reveals the relevant key.

The announcement follows a warning from Ethereum researcher Justin Drake, who urged cryptocurrency holders on Thursday to prepare for a possible “bunker mode.” He cautioned that, in a worst-case scenario, AI could help discover a way to break the mathematical safeguards protecting Bitcoin and Ethereum wallets “in months, not years.”

Ethereum’s broader transition to quantum-resistant cryptography is targeting December 2029. So far, no practical attack capable of breaking the cryptographic keys used by these wallets has been demonstrated.

ZEC ended Thursday at approximately $1,185, down around 11% over the previous week. The token experienced one of the largest declines among major cryptocurrencies after Drake’s warning spread widely on X.

Read more: Bitcoin and ether holders urged to prepare ‘bunker mode’ against possible AI attacks.

Quantum protection focuses on Zcash’s transparent transactions

Zcash supports shielded and transparent payments. Shielded transactions conceal the sender, recipient and amount, while transparent transactions display addresses and transaction values publicly, similar to Bitcoin (BTC).

CoinDesk’s calculations using ZecStats data showed that around 11.96 million of the 16.98 million ZEC issued were held in the transparent pool on Thursday. That amounts to approximately seven out of every 10 coins, making this part of the network the main focus of the January proposal.

Cryptocurrency wallets use private keys to authorize transactions and corresponding public keys to verify them. The security model assumes that calculating a private key from its public counterpart requires an impractical amount of computing power. Drake’s concern is that future technological breakthroughs could make such attacks feasible.

A standard transparent Zcash address initially conceals its public key behind a cryptographic hash designed to be difficult to reverse. Spending funds reveals the public key, while transferring remaining funds to a new address places them behind another key that has not yet been disclosed.

However, checking balances across multiple addresses can create a separate privacy concern.

Someone who divides their holdings among 10 addresses still needs to retrieve the balance of each one. A conventional wallet may send these requests to a server, potentially allowing the service to identify connections between addresses that otherwise appear unrelated on the blockchain.

Zakura’s lookup tool uses private information retrieval, a method that enables a database to return a requested record without learning which record the user selected.

This allows wallets to check balances without providing the server with a readable list of their addresses. Although transaction details remain publicly accessible, the lookup process can reveal less information about which addresses belong to the same user.

An experimental version is already available through the “Private queries” option in the Vizor Zcash wallet.

Shielded payments require additional safeguards. Zcash’s quantum-recovery design warns that an attacker who obtains a recipient’s address could store encrypted payment records today and attempt to decrypt them later if advances in mathematics or computing make that possible.