Cryptocurrency faces a quantum computing problem

Cryptocurrencies have the potential to change finances, cutting out middlemen and providing accounts to millions of unbanked people around the world. Quantum computers It could change the way pharmaceuticals and materials are designed by bringing its extraordinary power to the process.

Here's the catch: The blockchain accounting technology that powers cryptocurrencies could be vulnerable to sophisticated attacks and counterfeit transactions if quantum computing matures faster than future-proof digital money efforts.

Cryptocurrencies are protected by a technology called public key cryptography. The system is ubiquitous, protects your online purchases, and encrypts your communications for anyone other than the intended recipient. The technology works by combining a public key, one that anyone can see, with a private key that is for your eyes only.

If current progress continues, quantum computers will be able to crack public-key cryptography, which could create a serious threat to the world of cryptography, where some coins are valued to hundreds of billions of dollars. If the encryption is broken, the attackers can impersonate the rightful owners of the cryptocurrency, NFTyour other similar digital assets.

"Once quantum computing becomes powerful enough, essentially all security guarantees will disappear." Song of dawn, a computer security entrepreneur and professor at the University of California, Berkeley, told the Collective[i] Forecast Forum in October. "When public key cryptography breaks, users could be losing their funds and the whole system will break."

Quantum computers get their power by manipulating data stored in qubits, elements like charged atoms that are subject to the peculiar physics that governs the ultra-small. To crack the encryption, quantum computers will need to tap into thousands of qubits, far more than the dozens cornered by current machines. Machines will also need persistent qubits that can perform calculations much longer than the fleeting moments possible at the moment.

But quantum computer makers are working hard to address those shortcomings. They are putting more and more qubits in the machines and working on quantum error correction methods to help qubits perform more sophisticated and longer calculations.

"We hope that within a few years, powerful enough computers will be available" to open blockchains, said Nir Minerbi, CEO of the quantum software maker. Classiq Technologies.

Fixing the quantum computing problem of cryptocurrencies

The good news for fans of cryptocurrencies is that the problem of quantum computing can be solved by adopting the same post-quantum cryptography technology that the computer industry has already begun to develop. The National Institute of Standards and Technology (NIST) of the US government, trying to get ahead of the problem, has spent several years in a careful process to find quantum-proof cryptography algorithms with the participation of researchers from all over the world.

In fact, several cryptocurrency and blockchain efforts are actively working on quantum-resistant software:

• The Ethereum project, which created the largest cryptocurrency after Bitcoin in terms of total value, has started to chart a post-quantum course. Justin Drake, researcher at the Ethereum Foundation, detailed ideas of quantum resistance in Ethereum 3.0 at StarkWare Conference in 2019. However, it is likely a long way off: the Ethereum stream transition to Ethereum 2.0 it's taking years.
• Some people are building new cryptocurrency and blockchain technologies designed for the age of quantum computing. That includes Quantum-resistant ledger and Bitcoin Post Quantum, which despite the name is not related to the original Bitcoin cryptocurrency. These efforts employ post-quantum algorithms to protect against future quantum cracks.
• Cambridge Quantum Computing, a startup that merges with quantum computer maker Honeywell, is working on quantum security technology that "can be applied to any blockchain network". Its goal is to protect both the communications between the 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 commercial uses of blockchain, has begun work on post-quantum cryptography through its Ursa effort, says Daniela Barbosa, CEO of Hyperledger. Ursa is a library of cryptography software that Hyperledger projects can use.

However, one problem with post-quantum crypto algorithms being considered so far is that they generally need longer numeric encryption keys and longer processing times, says Peter Chapman, CEO of the quantum computer manufacturer. IonQ. That could substantially increase the amount of computing power required to host blockchains.

The problem of decentralized governance

Many cryptocurrencies, such as Bitcoin, are decentralized by design, in fact overseen by anyone who participates in each cryptocurrency network. To update the inner workings of a cryptocurrency, people trying to update a cryptocurrency must convince more than half of the participants that "fork" the cryptocurrency into a new version.

The real quantum proof for cryptocurrencies will be governance structures, not technologies, says Hunter Jensen, chief technology officer at Permission.io, a company that uses cryptocurrencies for a targeted advertising system.

Such governance could reward cryptocurrencies that have stronger central powers, such as Dash with your masternodes or even "govcoins" issued by central banks, which in principle can move faster to adopt post-quantum protection. But it presents an enigma in the crypto community, which often rejects the idea of ​​authority.

"It will be the truly decentralized currencies that will suffer if their communities are too slow and disorganized to act," said Andersen Cheng, CEO of Post Quantum, a London-based company that sells post-quantum encryption technology.

Other quantum problems with cryptocurrencies

Another risk is that blockchains are based on a fingerprint technology called hashing that quantum computers could disrupt. However, it is likely that it can be fixed with more modest technology updates.

the cryptocurrency wallets People who use to keep track of their digital assets could also be vulnerable to quantum computing. These wallets store private keys that people need to access their assets registered on the blockchain. A successful attack could empty a wallet.

"How do you force users to update keys? That answer is not so straightforward and probably the most dangerous part," said Joe Genereux, senior crypto and security engineer at Brave browser maker, which uses its own Basic Attention Token (BAT) cryptocurrency for an advertising system that pays users. "I think cryptocurrencies that have better governance or early-prepared post-quantum designs can better solve this problem."

Ultimately, however, the organic, self-directed development of cryptocurrency suggests that people will upgrade digital asset technology to overcome the challenges of quantum computing, he says. David sacco, who teaches at the University of New Haven.

"The beauty of the ecosystem," he said, "is that anyone can do it if they understand the technology."