Quantum Computing: A Threat to Bitcoin And Other Cryptocurrencies?
‘Quantum computing’ - a term that comes to mind quite often nowadays if you're technically inclined and even more so if you deal with cryptography and cryptocurrencies. But what are the implications?
‘Quantum computer’ - a term that comes to mind quite often nowadays if you are technically inclined and even more so if you deal with cryptography and cryptocurrencies.
‘Quantum computing is an area of computing focused on developing computer technology based on the principles of quantum theory (which explains the behavior of energy and material on the atomic and subatomic levels).'
Quantum computers could fundamentally change the world of IT and possibly science. The way to perform computations is revolutionary.
But there is also a flip side: Could quantum computers be used to crack cryptographic systems like Bitcoin? And if so, what are the ways to protect the system from this?
In this article, I want to give you a brief introduction to this topic.
What Are Quantum Computers?
Many people have heard of a 'quantum computer' and some of them may have a rough idea of how this technology works. However, not that many have really understood the concept of a quantum computer.
Quantum computers are capable of processing far more data per second than would ever be possible with conventional technology. While normal computers, like this one I am writing the article on, only know '1' and '0' (bits) as signals for their operations, quantum computers exploit quantum state, so-called 'qubits' (quantum bits).
These qubits have a unique property that a normal bit (1 or 0) cannot exhibit, namely that a qubit can be 0 and 1 at the same time, or could take on endless states in between. A good analogy is a coin toss. If you toss a coin into the air, which spins fast around its own axis, you can't tell in which state it is when it is in the air.
A qubit can therefore contain more information than a bit. This is what makes it so interesting for computer technology, because it allows you to create completely different applications and computing operations.
Potential application areas are:
Simulations for natural and engineering sciences (e.g. physics, material research, etc.)
Business calculations and optimizations
In recent years, this sector has developed enormously and many large companies are researching this technology to work with it. It could become one of the most significant achievements of this century.
It becomes especially interesting when you think about quantum computing in the context of Bitcoin. The question that arises is:
Would a powerful quantum computer be able to crack the Bitcoin blockchain? Would it be the end for all cryptocurrencies?
Quantum Computing & Bitcoin: What if?
It is important to differentiate between the blockchain as a technological concept and projects like Bitcoin that use it. Quantum computers are not currently a threat to the Bitcoin blockchain, they are not capable of cracking it. However, this might not be true until forever, progress cannot be stopped.
Bitcoin uses two security mechanisms, a hash function when a new block is created and the ECDSA algorithm for managing the private/public key pairing.
ECDSA stands for 'Elliptic Curve Digital Signature Algorithm' and is considered the absolute standard for creating keys in cryptographic systems. The algorithm is used to sign transactions on the blockchain. This system also allows us to create a private key and from it a public key with 256-bit encryption.
Guessing the private key of a public key would be impossible, and calculating it would take longer than many thousands of human lifetimes.
For a powerful quantum computer, the ECDSA algorithm is not necessarily a problem:
‘Multiplying this number by the cumulative computation power, say 153 million, on 2 November, results in 0.46 billion years. This is the projected time it would take hardware computing to crack ECDSA cryptography.’ - https://www.numbrs.com/how-bitcoins-cryptography-fares-with-quantums-prowess/
Also, Scientists of the National University of Singapore studied the potential dangers of quantum computing on Bitcoin and expect that as early as 2027, a quantum computer could be able to crack the algorithm. The progress cannot be denied; just recently there was the next breakthrough.
What Quantum Computers Are Currently Available?
When it comes to quantum computers, we are mostly still in theory, looking at various concepts that could potentially be used to realize an actual quantum computer in the future. Currently, there are the following:
Google Sycamore and Google Bristlecone with 53 and 72 qubits, respectively.
Virtual quantum simulators from Microsoft, which practically realize a quantum computer on a conventional (super) computer
IBM offers online access to the Q Experience quantum processor, which has a power of 20 qubits. The processor is based on superconductors and in the laboratory version it even manages 50 qubits. The Fraunhofer-Gesellschaft was also involved in the research.
But it is not only companies that are devoting themselves to quantum technology. Many governments and government research organizations are also showing interest. In June 2020, for example, the German government decided on a 130 billion euro economic stimulus program. A full 2 billion euros will be spent on funding research into quantum technology. Eventually, at least two prototypes of a fully functional quantum computer should be ready.
How Can A Cryptocurrency Be Protected Against Potential Quantum Computer Attacks?
There are basically two approaches: 1. Implement a quantum-resistant layer on an existing blockchain, or develop a new blockchain from scratch. The term 'post-quantum cryptography' is also often used here, a subfield of cryptography research that deals with new types of algorithms.
An example of the second approach is, for example, Quantum Resistant Ledger (QRL), which is operated by a non-profit foundation in Switzerland. The QRL blockchain was designed in such a way that no quantum computer has a chance to crack it.
It uses extended Merkle signature schemes (XMSS). This is a signature concept based on hashes that, unlike ECDSA, is not vulnerable to attacks by quantum computers. Nowadays the project seems rather dead, I am just talking about general technology.
However, there are not many organizations overall dedicated to this research in the context of blockchain technology. But one can expect that as progress on the quantum computing side grows, so will efforts on quantum-resistant blockchains.
Conclusion: Bitcoin Can Be Upgraded
The future is uncertain at the moment, but in the present, quantum computers pose no threat to Bitcoin and other cryptocurrencies. Only when quantum computers get way more powerful, the Bitcoin developer community really has to think about upgrades to avoid successful attacks.
Bottom line: When you are reading mass media reports that quantum computing will bring down cryptocurrencies - it is mostly FUD!