Quantum cryptography: A serious threat to cryptocurrency?

Introduction

For the majority of blockchains, cryptography is a fundamental component of their security and privacy mechanisms. Though the cryptography of blockchains can be solved or traced back throughout a blockchain, this is a complex process, and many major blockchain networks are praised for their robust security and resistance to changes and attacks. In the future, however, a new type of supercomputer may rise that potentially has the power to decrypt the cryptography of blockchains and cryptocurrencies: the quantum computer. 

The emerging technology of quantum computing holds great potential for solving complex problems that certain sectors in society deal with, but their arrival also poses a significant threat to the security of blockchain networks. With their incredible computing power, the implication of quantum computers breaking current cryptographic algorithms are far-reaching. It could enable people to compromise private keys of cryptocurrency wallets, decrypt sensitive data, and even tamper with blockchain transactions or disrupt a network completely. 

With cryptocurrencies and blockchain technology being increasingly adopted by mainstream users around the world, it is important to understand how quantum computers could pose a threat to blockchain security, even if the technology is still in its infancy today. Therefore, in this article, we will take a look at both the potential of quantum computing and the threat it might pose to blockchain and cryptocurrency, as well as possible measures that can be taken to make blockchains more secure against this new technology. We will also evaluate how serious the threat of quantum computing to blockchain is in the short term: do we have to worry about quantum cryptography, or does it sound worse than it is? In this article, we will try and answer this question.

About quantum computing

What is a quantum computer?

A quantum computer is a type of computer that uses principles from quantum mechanics to perform complex computations that are too difficult for classical computers. Unlike classical binary computers, which store and process information in bits (represented as 0s and 1s), quantum computers use quantum bits, or qubits, which can exist in multiple states at the same time thanks to a property called superposition. This property allows qubits to represent and process much more information simultaneously compared to classical bits. Additionally, qubits can be entangled, meaning the state of one qubit is dependent on the state of another, even if they are physically separated.

Quantum computers leverage these properties to perform certain computations more efficiently than classical computers. Their abilities even surpass those of supercomputers, which are a class of high-performance classical computers that can do complex computations at high speed. In short, quantum computers can solve problems that are currently intractable for even the best of classical computers.

The advantages of quantum computing

Though we will mostly look at the potential threats quantum computers might pose, this technology also has numerous advantages. The substantial increase in speed and power means that this type of computer can solve complex computational problems that are too difficult for the computers we have today. Moreover, quantum computers can address complex problems in a more efficient way. This is especially useful in sectors where optimization problems occur frequently, such as in logistics, scheduling, modeling (e.g. finance or climate modeling), and supply chain management. 

The power of quantum computing can also enhance cryptographic abilities and improve machine learning and AI to completely new levels.

Potential threat of quantum computers to cryptocurrency

Why are quantum computers a threat to cryptocurrencies?

Because of their immense computational powers, quantum computing can become a very real threat to the security of blockchains and cryptocurrencies. Traditional cryptographic algorithms, such as the widely used RSA and Elliptic Curve Cryptography (ECC), rely on the computational difficulty of certain mathematical problems, such as prime factorization or discrete logarithms. While these problems are difficult to solve for classical computers, quantum computers, with their immense processing power, could potentially solve them with relative ease using algorithms like Shor’s algorithm. 

People with adverse intentions could use quantum computers to orchestrate attacks on blockchain networks to steal funds, privacy sensitive data, or disrupt networks. If quantum computers were to become sufficiently powerful, they could also compromise the security of proof of work-based cryptocurrencies by enabling malicious actors to perform a 51% attack more easily.

These threats are concerning, because more and more people and organizations are looking into the uses of cryptocurrencies and related technologies, and blockchain technology is increasingly being adopted by new sectors. A threat to blockchain could therefore become a threat to large parts of society. 

How real is the threat of quantum computing?

It is the question we all want the answer to: Are quantum computers going to steal bitcoins? The short answer is not yet: the technology is still in its very early stages of development. In addition to this, quantum computers have several limitations that decrease, or at the very least delay them from becoming a widespread threat to cryptocurrencies.

Quantum computers are very sensitive

A major limitation for the broader use of quantum computers is their sensitivity. They are very sensitive to heat, electromagnetic waves, and exposure to air due to the nature of their technology. Their operability and lifespan thus deteriorate quickly when they are located in an environment that is not ideal.

Scalability and error issues

For a successful attack on a blockchain network, a quantum computer would need an incredible amount of qubits. Scaling up the number of qubits in a quantum computer is a complex task. As the number of qubits increases, the system becomes more prone to errors, and the requirements for error correction and fault tolerance become more demanding. Overcoming these scalability challenges is a significant obstacle in realizing large-scale, fault-tolerant quantum computers.

For several large attacks on big blockchain networks, such as a storage attack aimed at stealing funds from wallet addresses with a public key, a computer would need close to a whopping 10 million qubits computing power to be successful. The University of Sussex researchers estimate that breaking into the Bitcoin network within a 10-minute timeframe would necessitate a quantum computer with 1.9 billion qubits of processing power. Achieving such a massive amount of power requires millions of quantum computers. This makes the theft of bitcoins from the blockchain through quantum computing a very unlikely scenario in the close future.

Smaller attacks, that can still have large consequences for users of bitcoin and the acceptance of cryptocurrencies, are more likely. Therefore, it is wise that cryptocurrency networks start implementing security changes into underlying blockchain protocols that anticipate the rise of quantum computing.

The nearby future

The limitations make the every-day use of quantum computers for the normal individual very unlikely, at least in the foreseeable future. It is more realistic to expect that accessible quantum computing in the future will lay somewhere between our current classical computers and the all powerful quantum computers, though developments and innovations can always offer new opportunities. Additionally, these so called quantum-centric computers can already boost much more computational power than classic computers.

The fact that quantum computing is still a long way from posing a serious threat to large blockchain networks, gives developers time to develop new cryptographic algorithms to further secure blockchains. It is crucial that developers and organizations begin to take these steps to quantum-resistant security sooner rather than later, because the technology will inevitably develop.

How about the far future?

On the short term, it is unlikely that quantum computers will attack blockchain networks and steal cryptocurrencies, but how about the far future? Will quantum computing potentially destroy cryptocurrency in the long term? In the far future, it is not at all an unlikely idea that quantum computing will seriously threaten the safety and existence of blockchain networks.  Just as the rise of computing developed rapidly in a matter of decades, the development of quantum computing for more every day use cases might gain momentum too. Therefore, if blockchain technology is to survive the rise of quantum computing, the technology will have to evolve along with quantum technology. One solution to the threat quantum computing poses to blockchain ledgers is to increase the key sizes. However, it is questionable whether it is realistic to continuously increase the number of keys to stay ahead of increasingly powerful quantum computers.

A more promising approach to counter the threat of quantum computing are newly emerging cryptographic protocols, such as algorithms relying on math problems, or lattice-based cryptography. With the latter, the encryption process contains mathematical noise aimed at confusing a quantum computer. 

Whatever solution will be implemented to secure blockchains from quantum computing, it is important that developments stay ahead of the development of quantum computing.

Could quantum computing help in securing blockchains?

With the incredible extent of capabilities that quantum computers can have, it is not at all a far-fetched idea that quantum computing will also find its way into blockchain technology and decentralized networks. Quantum computers can potentially play a role in securing blockchain networks against the threat of other quantum computers operated by people with malicious intentions. While quantum computers have the potential to break cryptographic algorithms currently used in blockchains, they can also provide enhanced security features. For example, networks can employ quantum key distribution (QKD) to securely distribute cryptographic keys among participants of a blockchain network. QKD leverages the principles of quantum mechanics to establish secure communication channels, which makes it highly resistant to eavesdropping or tampering attempts, even by other quantum computers. 

This goes to show that we do not necessarily have to fear quantum computers and shun this new technology. It can also offer new potential and opportunities to decentralized networks. 

How about quantum computers and cryptocurrency mining?

Blockchains that operate on a proof of work mechanism require computational power to mine blocks to the blockchain. If quantum computers have such significant computational power, will they take over the mining process? In the future, this might happen. The power of quantum computers ables them to solve proof of work puzzles much faster than classic computers. 

As we already touched upon before, quantum computers could also be capable of enabling people to conduct a 51% attack more easily, which is a serious threat to blockchain networks operating on proof of work. 

Other consensus mechanisms, such as proof of stake, may be inherently more resistant to quantum attacks. Therefore, if quantum technology does rise in the future, it might just happen that more blockchain networks see themselves shifting to proof of stake. 

Still, the limitations of quantum computing make it unlikely that this will happen in the nearby future, but nevertheless it is wise for developers and miners alike to learn about the changes quantum computing might bring to their sector and livelihood.

Conclusion

Quantum computers, with their incredible computational power, might gain the ability to decrypt many blockchains’ cryptography. This would pose a serious threat to the fundamentals of blockchain networks and cryptocurrencies in the future. In the short term, the technology is still too underdeveloped and challenged by several limitations that hinder its widespread use. Therefore, people do not have to worry about quantum computers stealing their bitcoins today. However, this might change in the future, since the technology is under intense development. 

Although quantum computing does not currently pose a threat to cryptocurrencies as they exist today, it is key that developers introduce improvements and changes to counter the future threat of quantum computing in order to preserve decentralized networks.