According to a 38-page report, quantum computing – a technology that could make defeating traditional encryption means a trivial affair – could pose a threat to cryptocurrencies and blockchains.
But how imminent is this threat, and is there any way to fight it? Read on as we go over some of the results of the report.
The Quantum Opportunity and Threat
For those unfamiliar, quantum computing is potentially one of the most important developments in the evolution of computing power. However, the way it operates is fundamentally different from that of what some call classical computing. That means quantum computing can be exceptionally, even absurdly more efficient at some tasks, while still lagging behind other tasks that classical computing is still better suited for. At least for now.
Experimental quantum computers have existed for a few years, and according to recent reports, Google is leading the charge and has apparently made some impressive advancements that have got everyone talking.
The concern here as it relates to cryptocurrency is that hypothetically a quantum computer that is specialized in decrypting private keys on a cryptocurrency network like bitcoin could cause all trust to be lost in the network, and consequently all value in it destroyed. To put it another way, if bitcoin wallets can be hacked directly, people will stop trusting it and it will consequently drop in value and slow or stop adoption. Or, as the QAN report describes it:
Once [private key cryptography] is broken…digital currency such as bitcoin and ethereum would no longer be immutable because it woud be easy to change records as there would be no security measures left in place.
Quantum computing is not all gloom and doom, however. With some experts predicting quantum computing becoming more widely available in as soon as 10 years, it could change the way that we live our lives not long after that.
Planning For The Future
Experts have been aware of the impending eventuality of a post-quantum computing future for years now. As such, a number of cryptocurrency projects launched with specialized algorithms in place that were designed specifically to be immune to quantum computing through specialized techniques and mathematic principles. However, many other projects lack such defenses.
According to the report, hope is not completely lost even with these chains that may have potential weak points to a quantum threat. If we look at bitcoin, which uses an algorithm known as SHA-256, there is some potential that a quantum computer could be built that could defeat this algorithm (although it would still take potentially many dozens of years to break into a single private key).
It seems, however, that given the limitations of the technology as it exists, a cryptocurrency like bitcoin could simply upgrade the encryption scheme used on the network to one such as SHA-512, which is more complex and requires enormously more computing power to break through.
In other words, as long as a blockchain project still has people that are actively developing for it, changes can be introduced as needed that can allow the chains to stay one step ahead of the quantum curve. However, if a popular chain (or even a niche one) is not updated regularly, it is conceivable that it could eventually fall victim to a quantum attack.
Read: Is Cryptocurrency the Future of Money?
Should You Be Worried?
The good news is there is no need to panic right now. Currently, quantum computing is solely in the hands of research institutions and mega corporations. Further, as these devices are extremely experimental in nature, the development of a specialized device using highly proprietary technology for the sole purpose of hacking a blockchain would not go unnoticed.
It is also very reasonable to assume that as quantum computing continues to develop, most major blockchains and cryptocurrency projects will begin migrating into using more complex algorithms that are quantum-resistant, if not quantum-proof.
As for whether or not this shift will be easy is unknown and largely depends on the architecture of the blockchain and how ready and willing its propagators (miners and stakers) are to update.
Another potential consequence of such a shift would be the immediate obsolescence of all mining hardware that was designed to mine the original algorithm.
That means if bitcoin shifts away from SHA-256, your shiny new Antminer will become a brick. But of course, these types of changes won’t happen overnight, so ASIC manufacturers would undoubtedly get advance notice and be able to create new machines.
Regardless, the old hardware would be useless once the shift happens, potentially leading untold millions of dollars in computing hardware to simply sit and rot, or hopefully be recycled somehow.
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