Will Quantum Computing Bring Blockchain to its Knees?
Quantum computing is a technology that harnesses the laws of quantum mechanics to solve problems too complex for the average computer. While we are still years away from mass adoption, quantum computing could threaten the fabric of cryptocurrencies as we know them today.
The computing power we have today does not pose a threat to encryption methods on major blockchains. However, within the next 10 to 15 years, quantum computing may be strong enough to cause sophisticated storage and transit attacks on major blockchains.
Untapped Potential
To fully understand how quantum computing will affect cryptocurrencies, we need to understand how it differs from modern computing. Current computing is limited to “bits” (Ex: Nintendo 64), where a bit is used to carry out specified computations.
Today, bits cannot exist in two separate locations in two separate states. Meaning, a bit must always have a value of a 0 or 1. These bits can only have four possible configurations when working in pairs, 0-0, 0-1, 1-0, or 1-1. To solve complex problems with multiple variables, it would take more power and effort from a regular computer as it can only support a limited range of configurations.
Quantum Computing differs in that it can create qubits, or bits that can co-exist in states of both 0 and 1 at the same time. An individual qubit can exist in the four variations of 0 and 1 at the same time. With each added qubit, the processing speed of that computer grows exponentially by 4.
The Google-made 54-Qubit sycamore processor is able to complete a complex problem in a matter of 200 seconds, something that would take the most powerful classical computer up to 10,000 years (CoinTelegraph).
Dangers to Crypto
These differences in computing power makes cryptocurrencies particularly vulnerable to malicious attacks by quantum computing. For instance, a storage attack is one way that a Quantum Computer can exploit the encryption and security of crypto wallets. A storage attack is when a hacker breaks the encryption behind a wallet with its private key on a public ledger.
It is estimated that it would take One Billion Qubits to be able to break the encryption behind a bitcoin wallet to uncover its private key (CoinTelegraph). Today, roughly 25% of all Bitcoin Wallets are susceptible to such storage attacks. Luckily, the most powerful quantum computers can only handle 50-100 Qubits.
Transit Attacks are another potential vulnerability for cryptocurrencies, as they remain a problem to date. With our current computing infrastructure, Bridge Attacks remain a source of exploit for hackers. A Bridge Attack is when hackers are able to find vulnerabilities in cross chain bridges and successfully steal funds en route.
One of the most famous examples is when Axie Infinity lost 600 Million Dollars from hackers finding exploits on the Ronin Bridge. For Quantum Computing, the threat lies in the Quantum Computers being able to intercept funds between the start of a transaction and when it is implemented on the next block. It’s estimated that this type of interception would require a billion qubits (Deloitte)
A Quantum Resistant Future?
While these threats to cryptocurrencies via Quantum Computing are definitely concerning, the technology needed to break public key encryption is years away. It is estimated it would take 10 to 15 years for Quantum Computing to be sophisticated enough to challenge cryptocurrency security. However, given the exponential breakthroughs in technology, this time frame may be shorter.
Given this expected outcome, it is commonly accepted that cryptocurrencies will need to become quantum resistant. Most cryptocurrencies run on a decentralized governance, which would require mass consensus from the user bases in order to upgrade protocols to utilize quantum resistant algorithms. Such upgrades will likely cause debates and hard forks within individual ecosystems, similar to hard forks seen in Ethereum and Bitcoin upgrades.
Most cryptocurrencies do not address quantum computing in their roadmaps. The vulnerabilities of storing your money in crypto protocols will be unprecedented as the adoption of quantum computing expands. Despite this truth, defenders have the upper hand in this battle. It is much easier and scalable for a cryptocurrency to add more digits to its encryption than it is for researchers to develop quantum computers capable of decrypting them.
Right now, Advanced Encryption Systems with 128 characters can be decrypted by quantum computing, however, AES with 258 is currently safe (Decrypt.co).
It is anyone’s best guess as to how this emerging technology will disrupt the blockchain industry. Each day, we are inching closer and closer to the age of quantum computing. If a malicious actor were to harness the power of a quantum computer capable of running 1 million qubits, then 25% of all bitcoin wallets could be drained.
Technology that is used to break bitcoin wallet encryption is also capable of breaking almost every user login on your phone. So, while the threat of cryptocurrency chaos is warranted, the rest of the modern financial system is exposed to the same risk. Until then, all we can do is monitor the advancement in Quantum Computing, the defenses against it, and act accordingly with the new information at hand.
FAQ
What exactly is quantum computing?
Quantum Computing is an advancement in computing that allows for computer bits to exist in multiple states, and solve complex problems exponentially faster than current computers.
Will quantum computing negatively affect blockchain security?
Yes, however, it will affect almost every form of encryption.
Are my crypto assets going to stay safe long-term?
Yes, right now Quantum Computers at best run between 50-100 Qubits, it requires over a million Qubits to break a private key encryption.
Should I lose sleep on thinking about quantum computing?
No, while this is an important subject and one that should be followed, living in fear will not keep your assets safe.
Monitoring its progress and keeping a pragmatic approach to your digital security in a level-headed manner will be the best solution. The entire world is in the same boat and billions are poured into Quantum Computing research.
The following video will explain quantum computing a bit further in a visual manner using quantum physics.
Thank you for tuning in and as always...
Keep your fingers on the Pulse!
Related articles
Is Crypto Mining Dead?
Ethereum Merge: Is Your Ether (ETH) Safe?
The Ethereum Merge Happened - So What?
Author: Ken Melendez
✍️ Head of Content @ Cindicator
📊 Certified Bitcoin Professional
🔐 Blockchain Chamber - Chapter President
Who is Cindicator?
Cindicator is a world-wide team of individuals with expertise in math, data science, quant trading, and finances, working together with one collective mind. Founded in 2015, Cindicator builds predictive analytics by merging collective intelligence and machine learning models. Stoic AI is the company’s flagship product that offers automated trading strategies for cryptocurrency investors. Join us on Telegram or Twitter to stay in touch.
Disclaimer
Information in the article does not, nor does it purport to, constitute any form of professional investment advice, recommendation, or independent analysis.
Sources
https://www.weforum.org/agenda/2022/04/could-quantum-computers-steal-the-bitcoins-straight-out-of-your-wallet/
https://www.ibm.com/topics/quantum-computing
https://www2.deloitte.com/nl/nl/pages/risk/articles/quantum-risk-to-the-ethereum-blockchain.htmlhttps://www.cnbc.com/2021/06/10/long-term-crypto-threat-quantum-computers-hacking-bitcoin-wallets.html