MicroCloud Hologram Inc. (NASDAQ: HOLO) announced the launch of a quantum key distribution technology solution designed to support Bitcoin's transition to post-quantum cryptography protocols, according to a company press release.

The Shenzhen-based technology service provider said its quantum key distribution system uses quantum mechanics principles rather than mathematical algorithms to secure communications. The technology detects eavesdropping attempts through quantum state disturbances and terminates communication when bit error rates exceed predetermined thresholds.

The company's solution implements a script-layer extension that works alongside Bitcoin's existing ECDSA signature system without requiring modifications to the underlying protocol. This approach allows upgraded nodes to support both quantum key verification and traditional signatures while maintaining compatibility with non-upgraded nodes.

MicroCloud Hologram optimized the technology for Bitcoin's UTXO transaction model by creating quantum key associations with unspent transaction outputs. The system uses distributed quantum storage across multiple nodes, with complete key reconstruction requiring quantum entanglement exchange.

The solution addresses computing power disparities among Bitcoin nodes through edge computing architecture that migrates complex key computations to edge nodes while core nodes handle verification and transaction confirmation. This design reduces computational requirements for lower-powered nodes without requiring hardware upgrades.

For existing Bitcoin assets, the company developed a quantum encryption migration mechanism for approximately 6.9 million bitcoins stored in addresses with exposed public keys. The system allows users to migrate assets through existing wallet terminals without exposing private keys during the process.

MicroCloud Hologram reported cash reserves exceeding $390 million and plans to invest more than $400 million in Bitcoin blockchain quantum security development, quantum computing research, and quantum holography technology development.