Is quantum computing a threat to crypto? Blockchain technology has evolved over the years notably but quantum computing has also been making waves simultaneously.
Both these are complex technological aspects and it needs careful and proper understanding of the two to deduce whether or not quantum computing is really a threat to crypto.
It is true that the quantum clouds are forming fast and heavily in the horizon of the crypto sector due to the major advances in the field of quantum computing.
But whether or not there is any need to panic right now is the question.
It is quite natural for an average investor and even the experts to think that quantum computing may derail the whole crypto sector.
Well, theoretically, it is possible but practically it will take a long, long time from now for it to happen, if it does at all.
Since blockchain technology is also advancing at a pretty fast rate and continually, it may be possible for it to outdo the threats imposed by quantum computing on its existence.
However, both blockchain and quantum computing are hot topics for discussion right now.
If you want to be knowledgeable and participate in such discussions, you are in the right place.
This article will enlighten you about quantum-proof coding which is already in its developing stage, data encryption protection, revelation of public keys, and other aspects that you should know as a crypto investor.
You will also know about the different issues with the blockchain accounting systems and the related threats of forgery and how to make the digital currencies future-proof.
Therefore, read on.
Is Quantum Computing a Threat to Crypto?
Blockchain is a digital technology or tool that stores information and data and prevents them from being modified by anyone who is not authorized.
It uses cryptography techniques for that, which also happens to be the foundation of Bitcoin and other crypto coins.
It is the same for all other products related to blockchain which may be associated with everything from finance to manufacturing, and from health care to supply chain management.
When it comes to information stored on a blockchain, it is all about several important aspects such as:
- Data security
- Accountability and lots more.
All these are crucial attributes of a blockchain network to store digital records safely.
This ensures that this distributed ledger can be accessed and used easily by the authorized participants of the network who may add up to thousands or more and spread all over the world.
These users all over the globe are the ones who maintain the security of the network and authenticity of the records stored in it with their collective effort instead of any one central authority.
Therefore, personal trust does not come into play in the blockchain technology and hence it is called a trustless and permissionless distributed ledger.
The decision on whether or not a particular entry is to be added to the block in the ledger is typically based on Proof of Work consensus protocol.
Anyone from within or outside the network can verify the integrity of the entry as well as the ledger with a few simple calculations.
With all these special characteristics of blockchain technology it has attained a lot of significance over the years so much that it is expected that by the end of 2025 more than 10% of the global GDP or Gross Domestic Product will be stored on blockchain networks.
As it is, blockchain technology is quite difficult to understand and it is even more difficult to grasp quantum computing because it is a completely different subject matter which is based on the complex principle of quantum physics.
To put it in simple words, quantum can transform everything and is easy to propose but it is not totally accurate.
However, quantum computing can solve mathematical problems a lot more quickly than the current traditional computers, often million times faster.
Practically, quantum computers are considered to be exceptionally good at breaking cryptographic passwords.
This particular ability of these computers poses a new and significant challenge to cryptocurrencies.
This is because cryptocurrencies, as you may know, are secured by public key cryptography.
This is a specific technology that encrypts your online transactions and messages so that it can be viewed by only those who are authorized or meant to.
This system operates on the combination of the public key which can be viewed by anyone with the private key that is stored and can be viewed by the owner only.
The public key encryption can be deciphered by the quantum computers if it develops at the current rate.
This is the most significant threat that they pose to crypto.
It will affect the functionality of the coins, their trading, the data stored, and more.
It is all due to the Qubits of the quantum computers which are like altered atoms that are based on traditional principles of physics.
This can govern the smallest elements.
A quantum computer will however need millions of these Qubits that contain 0s, 1s and their superposition states to crack crypto encryption.
This requirement is a long, long way from what these computers come with as of now.
Apart from that, the quantum computers will need permanent Qubits as well for computing for a significantly longer time than it can do now.
Though the makers of these computers are trying hard to do away with these issues by stuffing more Qubits in them, it will take a long time for them to design a really powerful quantum computer.
Then, it is also required to develop quantum error correction techniques that will help the Qubits to carry out lengthier and more complex operations.
This, once again, will take some time.
Therefore, there is no immediate threat to crypto from quantum computers.
But then, nothing can be said for sure about how things will change in a decade from now.
Therefore, it is good to be ready with some measures that will protect the cryptographic codes of the blockchain networks from the probable threats imposed by the quantum computers.
Significance to Crypto Investors
As a Bitcoin or crypto investor, you may wonder what would be the significance of this looming threat on crypto by the quantum computers.
Well, the good news regarding this issue is that it is quite well-documented and there is no chance of anything drastic to happen overnight or over a couple of years.
It will take a long time for quantum computers to crack crypto encryption effectively and quickly, according to several computer specialists.
One more interesting fact is that blockchain technology is also evolving side by side as quantum computing.
A lot of developers and programmers have already started working on post-quantum cryptography that will fortify Bitcoin and crypto encryption that the quantum computers will not be able to crack.
However, as a crypto investor you should keep a close watch on the quantum advances and update on an individual basis to post-quantum cryptography techniques at the most opportune moment.
It is required to see which particular digital coin manages to stay ahead of the curve.
Also, it is highly likely that you will have to move your digital assets to a more secure digital wallet at some point of time in order to make them less vulnerable to the threats from quantum computers.
It will be much easier for you to move your crypto assets if you store them with a crypto exchange but if you wish to store them in a decentralized wallet, you will have to be extra vigilant.
In general, the regulators are supposed to be the greatest threat to crypto but the ominous shadow of quantum computing and other technologies also pose some significant threats.
Just like Bitcoin blockchain rendered other technologies obsolete a decade ago, quantum computing now can cause the same thing to happen to cryptography protocols.
There are also slew of other major issues right from viability in the long term to scalability of the current crypto initiatives.
The crypto industry needs to react strongly and pretty quickly given the fact that the magnitude of the threat posed by quantum computing is increasing with each passing day.
This will guarantee that the perils of quantum computing do not put the security in danger.
Otherwise, as a few crypto experts and scientists believe, quantum computing may crack and jeopardize Bitcoin security by the 2030s.
As of now, the security of the Bitcoin network is based on the traditional cryptographic algorithm known as SHA 256.
It is believed that no traditional computer can crack it. But, in the next decade, quantum computers can change everything.
If the keys are revealed and cracked while making a Bitcoin transaction, it will change the ownership of the coin.
This is quite a possibility, as scientists point out, since there is a cryptographic key assigned to every Bitcoin transaction and it is quite susceptible for a specific period of time.
This time may vary anywhere from 10 minutes to one hour, or even a day.
A few researchers have estimated that a quantum computer can crack the encryption of Bitcoin in as little as 10 minutes if there are about 2 billion Qubits, and to do so within an hour, it will need 317 million Qubits.
And, it will take just a day for these computers powered with as many as 13 million Qubits to break the protective encryption of Bitcoin.
It all depends on the prospects of the quantum computers that are based on trapped ions.
However, there is no need to panic because it will take some time for quantum computers to achieve such feats.
According to a few technological and statistical reports, as of now, the most potent quantum computer is considered to be the one that is developed by IBM.
This device comes with just 127 Qubits.
Therefore, it indicates that it is quite a long way from computers with 13 million Qubits or more to become available.
Scientists think that it will not be before the 2030s for such a device to be available and realized, considering the rate at which technology in this particular field is advancing.
And, the Bitcoin network also has the chance to nullify the looming threat and avoid the probable calamitous D-Day.
This can be done simply by creating a soft fork onto a quantum-secure encryption method.
However, there can be some major scaling issues related to such a switch.
Decentralized Governance and Other Issues
Looking into the technicalities of quantum computers, the real test for crypto is not the advanced technology of these computers but the issues it might cause to the decentralized governance structures.
Several cryptocurrencies including Bitcoin are built to be decentralized. Anyone who joins a particular blockchain network is supposed to be actively administering it.
However, no one can manipulate or take control of the network.
For that, they will have to manipulate the inner workings of the blockchain which involves persuading more than half of the participants of the network.
It is only then someone will be able to fork the particular coin of the blockchain into a new version.
It is this collective governance aspect of crypto blockchain networks that ensures its security.
However, there is a significant issue in the crypto community which is, it opposes the idea of authority continuously.
Now, with post-quantum encryption technology, the decentralized currencies will be affected the most if the crypto community is reluctant, unorganized, or too sluggish to adapt.
Several crypto experts are worried about this issue with decentralized governance as well as some other significant issues related to cryptocurrencies and quantum computing.
A significant threat of quantum computing is on hashing, which the blockchain networks rely heavily on.
This complex digital fingerprinting can be disrupted by quantum computers, though this can be remedied with comparatively modest advancements in technology.
Quantum computing can also cause some significant problems to the Bitcoin wallets that are supposed to be quite vulnerable.
However, these wallets are indispensable for keeping track of the digital possessions of the users.
The wallets typically hold the private keys which the individuals use to access their digital assets.
If an attack is successful it may nullify a wallet.
However, it is required to upgrade the keys, and it is not a simple thing to do.
In fact, it may prove to be quite a hazardous task as some of the senior security and cryptography engineers point out.
According to them it is only those specific crypto coins that come with a stronger post-quantum design or governance will be able to circumvent this issue.
They also predict that the digital asset technology will be upgraded in due course of time in order to overcome the issues caused by quantum computing.
The good thing about crypto technology and this ecosystem is that anyone who has fundamental knowledge about them can effectively and actively use it.
It is the self-directed and organic development of crypto that will modernize the digital asset technology to defeat the challenges posed by quantum computing.
It is seen that the indirect attacks are gaining popularity of late in spite of a strong encryption used to protect the records of a blockchain.
You will come across a lot of news in the crypto landscape regarding exchanges being attacked and funds of investors or speculators being pilfered.
Therefore, this proves that the security of a system is strong only till the time its weak points are not exposed and exploited.
It is therefore necessary to enhance the security aspect especially while making cross border and cross currency transactions to prevent such indirect attacks on the blockchain.
And, with the advent of quantum computers, such needs for security enhancements will be more profound.
Impacts on Crypto Data Storage
Also, quantum computing is expected to impact crypto data storage making it less secure.
As you may know, it is the combination of the private key with public key data encryption that secures the digital signatures of the users of a blockchain network.
This actually uses a large number of prime factorizations.
This is practically impossible for a traditional computer to break, but a quantum computer can break it by using Shor’s algorithm that was designed by Peter Shor in 1995.
This polynomial-time quantum algorithm can demonstrate how new algorithms need fewer operations to resolve huge and complex prime factorization problems as compared to the traditional algorithms.
Ideally, a powerful quantum computer may take just a couple of days to crack them which a traditional computer may take hundreds of billions of years.
It is this ability of the quantum computers that can pose significant risk to the combination of private key-public key data encryption.
However, this will happen only when quantum computers are commercialized, which is very unlikely to happen soon.
One Way Codes
Ideally, the security aspect of a blockchain depends on the one-way codes or the one-way mathematical functions.
These functions are pretty simple to run on any traditional computer but are quite hard to calculate in reverse at the same time.
Practically, it can take years to solve a given product and find its prime factors.
These one-way functions are used to produce digital signatures for the users of the blockchain to cite their authenticity to other users.
These signatures are extremely difficult to fake but are very easy to check.
In addition to verifying the authenticity of the users of the blockchain, these one way functions or digital signatures are also used to validate the transactions and history of all transactions made on the blockchain ledger.
The blockchain ledger consists of blocks that are linked with each other with a hash which is a short series of bits and is actually a combination of the block that is to be added and the current ledger.
Every time the contents of an entry are changed, this is changed as well.
It is also very simple to find the hash of a particular block to add a record or process any information but it is very difficult to select a specific block that will produce a particular hash value.
This is because it will need to reverse the method to find the particular information that produced the hash.
However, in a decade or so, quantum computers will be capable enough to calculate these one-way functions that secure the blockchain networks, the financial transactions and the internet.
As and when it happens, the widespread use and execution of one-way encryptions will be extinct.
The situations will be much similar to the mass extinction of information security faced before at the time of the Second World War when German military messages were coded and encoded by using Enigma machines.
This gave the Axis powers a significant advantage. However, the Allies were able to crack this Enigma code later on.
Also, in 1997, the lack of security in the Data Encryption Standard was proved by breaking it in a public contest.
As a result this algorithm used to encrypt electronic data lost its state-of-the-art label giving rise to a new protocol called AES or the Advanced Encryption Standard of today.
What Advocates Say?
The crypto world and its advocates seem to be divided on their views on quantum computing posing a threat to it.
A few crypto enthusiasts and advocates admit that there is a lurking fear about quantum computing among the people and crypto communities but they feel that it will not break cryptocurrencies or the encryption that protects the digital assets.
They say that quantum computing is not even close to posing any significant risks of loss of the private keys in spite of the much hyped ‘quantum supremacy.’
However, they also say at the same time that people need to dive deeper into it in order to have a clearer understanding of this phenomenon.
These advocates also say that quantum computing will surely interact with crypto.
Based on the principles of relativity and quantum physics, the quantum computers are different from the classical computers that are based on extensions of Turing’s theories.
These computers do not rely on the manipulation of physical bits which store only 0s and 1s.
Instead, it relies on Qubits for computing by holding in superposition and using quantum principles.
In spite of this unique feature, the advocates say that the quantum computers are nothing superior to the classical computers even though people believe that these computers can perform a few specific tasks much better and more quickly than the classical computers in any given and reasonable timeframe.
They say it all depends on the computing perspectives and time scales.
Based on these two specific parameters there may be some functions that may be impossible to complete within a significant human-level timeframe.
On the other hand, there may be a few functions that may be manageable by a large quantum computer but that may take a long time to accomplish.
When thought in the same way, both quantum supremacy and Turing tests that were designed to prove superiority of one system over the other seem more to be publicity stunts than substance.
For example, a quantum computer may be better at performing some trivial and minute tasks but may be absolutely unimpressive and useless while performing other tasks.
It is the same for the Turing test.
This means that while determining quantum supremacy and whether or not it poses threat to crypto it is important to narrow down its performance to a particular function that these computers are better on in comparison to the classical computers.
It will then be easy to determine whether or not the quantum computers will affect the encryption that the cryptocurrencies are built on.
According to some advocates, one of the most significant aspects to consider for determining the effect of quantum computers on crypto is Shor’s Algorithm.
This is because this particular algorithm can factor huge numbers down into two prime components.
Therefore, this is a property that is useful for breaking encryption as the RSA family of encryption typically relies on factoring huge numbers in precisely the same manner.
However, this particular algorithm works well only if the quantum computer is large.
Therefore, it is a realistic concern that ultimately it is the Shor’s Algorithm that will come into play along with other things for breaking the RSA or Rivest–Shamir–Adleman encryption.
Few other people and researchers propose a ‘marriage’ of blockchain quantum computing and quantum entanglement computing.
This will ensure that the blockchain is used beyond quantum cryptography. This will eventually create an entirely new kind of blockchain.
The entanglement concept, according to them, will be based on quantum physics which states that two entangled quantum particles will interact with each other by sharing their existence at a point in time and space.
Therefore, when one is measured, the other one will be influenced.
According to this process, the researchers say that a specific type of blockchain should be created in which a new quantum particle will contain the record of all transactions made by all its predecessors.
This will ensure that a predecessor particle is destroyed automatically if a hacker tries to hack it.
According to some other crypto advocates, quantum computers are far too small to hack or affect the functionality of Bitcoin.
This is because the quantum computers need to be a lot more powerful than what they are today in order to break the crypto algorithm that secures Bitcoin.
The US National Institute of Standards and Technology or NIST has also been doing their bit to ensure that the looming threat on blockchain and crypto is minimized if not eliminated by gathering post-quantum cryptography proposals.
They say that such encryptions will not be broken even by large quantum computers.
They also believe that it will take another couple of decades for large and more powerful quantum computers to come up and disrupt traditional encryption.
Some other advocates of crypto also put in a lot of thought on post-quantum encryption technology.
They say that a fork developed in the future may affect the chain in most parts but it will be quite predictable.
They think that Bitcoin will not be the first to be affected or fail if the traditional encryption is broken suddenly for whatsoever reasons.
Still, a soft fork instead of a hard one will be sufficient to help shift the crypto assets from the rapidly insecure keys in order to protect post-quantum encryption.
Add to that, they say that even a proficient execution of Shor’s Algorithm may not be enough to break a few cryptography standards that are commonly used in Bitcoin.
For example, SHA 256 is imagined to be quantum resistant.
This is because even the most efficient quantum computer will not be able to identify a SHA 256 collision as easily as compared to the hypothesized and classical execution to break the standard.
Moreover, the wallet file in Bitcoin uses SHA 512.
This is even more secure than the SHA 256 and helps a lot in securing and encrypting the private keys.
Most of the crypto encryptions of today are typically constructed on elliptic curve cryptography instead of RSA.
And, the generation of signatures in Bitcoin especially needs ECDSA or Elliptic Curve Digital Signature Algorithm.
This is mainly because the elliptic curves are quite hard, and sometimes exponentially, to crack in comparison to the RSA.
According to Moore’s law on classical computing, the sizes of the secure RSA keys have grown exponentially making it quite impractical in comparison to the elliptic curve cryptography.
It is for this reason that most people choose the elliptic curve cryptography for Bitcoin which ensures a much better system performance.
However, large quantum computers with lots of Qubits can flip this logic and break elliptic curve cryptography much more easily than breaking RSA.
Still, it is required to reveal the public keys to attack which makes it less likely due to the good privacy practices in terms of crypto wallet reuse.
Few crypto advocates are concerned about the Grover’s algorithm which typically expedites the mining processes of large enough quantum computers.
This, they think, poses a more significant threat to the state of crypto because a quantum speedup all of a sudden may result in more control of the chain and destabilization of the prices of coins.
If this speedup is hidden then it might even result in a more major threat such as probable 51% attacks or centralization of the mining process.
However, such worries are somewhat minimized due to the fact that the ASICs or the Application Specific Integrated Circuits that are specially designed to mine crypto coins are quite faster than the earlier variants of quantum computers.
Therefore, considering all that is said here, it can be concluded that there are a few avenues existing as of now to attack crypto and its functionality and more avenues may emerge in the future.
However, a mix of quantum computers will not render the traditional modes encryption useless suddenly or make crypto mining trivial and put your Bitcoin security at risk at the moment.
Still, post-quantum encryption should be planned through different mechanisms such as forks.
This will update cryptocurrencies with the use of better post-quantum encryption standards which will defend the coins against such limitations.
The real danger will be when the quantum computers turn out to be several scales larger than what they are now, and it may happen suddenly.
At that point, planning and executing a post-quantum encryption, use of dynamism and decentralized governance may be too late and useless to beat the perils of ‘quantum supremacy.’
Therefore, in the end it can be said that the foreseeable future of Bitcoin is secured as of now but the wider window of susceptibility is still a concern for the encrypted data.
It is quite reasonable that people are worried about their encrypted messages that may be decrypted in the future.
Therefore, the crypto community as well as the powers that be should change the encryption techniques urgently in order to uphold the security of crypto in the future.
Quantum computing and blockchain networks are here to stay and it also poses a significant threat to crypto, though not immediate.
Still, crypto users and businesses should be aware of them, as this article points out, and take adequate measures to protect their digital assets.