Cryptocurrencies have the potential to change finances, eliminate middlemen, and bring accounts to millions of unbanked people around the world. And quantum computers could change the way drugs and materials are designed, by bringing their extraordinary power to computational processes.
But, there is a problem: The blockchain ledger technology that powers cryptocurrencies could be sophisticatedly vulnerable to forged transactions, if quantum computing matures faster than the above efforts. the future of digital currency.
Part of IBM’s quantum computer system.
Essentially, cryptocurrencies are secured by a technology known as public key cryptography. This is a system that uses key pairs to encrypt and authenticate information, protect your online purchases, and scramble your communications with anyone other than your intended recipient. . The technology works by combining a public key, which is visible to anyone, with a private key that is only available to the owner.
But if the progress of quantum computing continues with the current leaps and bounds, quantum computers will be able to attack public key cryptography. It means potentially posing a serious threat to the crypto market, where some coins have a market value of hundreds of billions of dollars. If the encryption layer is broken, attackers can impersonate the rightful owner of cryptocurrencies, NFTs, or other digital assets.
“Once quantum computing becomes powerful enough, essentially all layers of security will be removed,” he said. Dawn Song, a computer security entrepreneur and professor at the University of California, Berkeley. “When public key cryptography is broken, users can lose money and the whole system will be broken.”
Quantum computers derive their power by manipulating data stored on qubits (or quantum bits), the fundamental object of quantum computing. To crack the encryption, a quantum computer would need to mine thousands of qubits, far more than the tens of qubits that computers use today. These machines will also need persistent qubits that can perform calculations for much longer than the fleeting moments they can currently do.
But, manufacturers of quantum computers are working to address those shortfalls. They are cramming more qubits into machines and working on methods of quantum error correction to help qubits perform more complex calculations and take longer.
Nir Minerbi, CEO of quantum software maker Classiq Technologies said: “We hope that within the next few years, powerful enough computers will be available to crack open blockchains.”
Large corporations like IBM and Google are both participating in the quantum race.
Cryptocurrency’s only way out
The good news for crypto fans is that the quantum computing problem can be overcome by applying the same post-quantum cryptographic technology that the quantum computing industry has begun to develop. The US government’s National Institute of Standards and Technology (NIST), is trying to solve this problem. Over the past few years, they have conducted a careful process of finding quantum proof cryptographic algorithms, involving researchers from around the globe.
Indeed, several crypto and blockchain efforts are actively working on quantum-resistant software.
For example, Ethereum, the project that generates the largest cryptocurrency after Bitcoin in terms of total value, has begun to prepare for a “post-quantum” future. Justin Drake, a researcher at the Ethereum Foundation, detailed the ideas of quantum resistance in Ethereum 3.0 at the StarkWare conference in 2019. However, getting there could be a long way off. . Because the transition of current Ethereum to Ethereum 2.0 will take many years.
Some are building new cryptocurrencies and blockchain technology designed for the era of quantum computing. It includes “Quantum Resistant Ledger” and “Quantum Resistant Bitcoin”. Despite their name, they are not related to the original Bitcoin cryptocurrency. These efforts use post-quantum algorithms to guard against future quantum cracking.
Cambridge Quantum Computing, a startup that has merged with quantum computer maker Honeywell, is working on quantum security technology “can be applied to any blockchain network”. It aims to secure both communications between computers that store blockchain data and the signatures used to encrypt and sign blockchain data.
The Hyperledger Foundation, an open source software project geared towards the business purposes of blockchain, has begun work on post-quantum cryptography through the so-called Ursa. It’s a cryptographic software library that Hyperledger projects can use.
However, one problem with the post-quantum cryptographic algorithms under consideration so far is that they often require longer digital encryption keys and longer processing times. And according to Peter Chapman, CEO of quantum computer maker IonQ, that could dramatically increase the amount of computational horsepower needed to house blockchains.
The problem with decentralized governance
Many cryptocurrencies, like Bitcoin, are decentralized by design, overseen by anyone participating in each cryptocurrency network. To update the inner workings of the cryptocurrency, those trying to upgrade the cryptocurrency have to convince more than half of the participants to “fork” the cryptocurrency into a new version.
Thus Hunter Jensen, chief technology officer of Permission.io, a company that uses cryptocurrency for a targeted advertising system, argues that the real “quantum test” for crypto will be is a matter of governance structure, not technology.
Because in principle it would take a new governance system that allows things to move faster, to apply post-quantum protection systems. But, it also raises a conundrum in the crypto community, which often rejects the idea of authority.
Andersen Cheng, CEO at Post Quantum, a company that sells post-quantum encryption technology based in London, said: “Really decentralized currencies will suffer if their communities act too slow and disorganized.”
Other Quantum Matters with Cryptocurrency
What crypto investors should fear is not a hacker, but a quantum computer.
Another risk facing the crypto market is that blockchains are relying on digital fingerprinting technology – also known as hashing – which quantum computers can disrupt. However, that can be fixed with future technology updates.
The crypto wallets people use today, to keep track of their digital assets, can also be vulnerable to quantum computation. These wallets store the private keys that people need to access their assets recorded on the blockchain. And an attack from a quantum computer can empty a wallet entirely.
“How do you force the user to upgrade the key? It’s not easy to answer that question and it can be the most dangerous part”, shared by Joe Genereux, security engineer at browser maker Brave, a paid advertising system for users. “I think a cryptocurrency with a better governance system or a post-quantum design introduced early could better solve this problem.”
However, according to David Sacco, a lecturer at the University of New Haven, “Ultimately, the organic, self-directed growth of the cryptocurrency market suggests that people will actively update digital asset technology. to overcome the challenges of quantum computing.
‘The beauty of this ecosystem’, he said, “anyone can do it if they understand the technology”.