Quantum Computing and Crypto
How much of a threat does it pose to this space?
A phenomenon that needs to be addressed here is the rise of quantum computing, which, in turn, could eventually lead to highly secure blockchains becoming compromised.
Nonetheless, it is worth noting that the aforementioned risks are low, and not something crypto holders need to worry about…not yet at least. Nevertheless, when it becomes mainstream, everyone should know about it.
Developers behind all blockchains will need to incorporate quantum-resistant principles into their respective ecosystems (sooner or later) to stave off any potential threats; risks that become increasingly probable with rapid technological advancements.
The question remains: is it possible to ever access crypto wallets again via quantum computers/computing (QC)?
This could be interpreted as a double-edged sword, providing some people the chance to access these encrypted wallets to retrieve funds. However, this is wishful thinking.
Rather, if such an opportunity were to ever arise, then the capacity to circumvent cryptographic security would disproportionately favour hackers who have QCs at their disposal, or, at the very least, those who have vast volumes of sensitive data to ultimately decrypt.
Expensive pieces of machinery, yes. Though, there are portable and affordable QCs in the works as we speak, and more that will be available in the coming years.
Above all, it will be interesting to see how Bitcoin is affected by QCs moving forward, and at what point its stakeholders will decide to implement quantum-proof aspects into its blockchain. Two things to consider:
1) Millions of Bitcoins have been lost (forever?) or have remain untouched for several years now since 2009. This is usually due to lost private keys and/or discarded hard drives that contained the private keys to access BTC.
2) Bitcoin has the largest circulating market-cap (CMC) at present; this asset solely accounts for ~39% of the total asset class’s CMC.
Bitcoin and open-blockchain expert Andreas Antonopoulos provides his thoughts about the related threats to Bitcoin in a video. In this, he details various scenarios in which particular crypto wallets (including Satoshi’s wallet, reportedly containing over 1 million Bitcoins) could be at risk of QC.
There are two main algorithms used in Bitcoin: SHA-256 for hashing (used for Bitcoin mining), and the Elliptic Curve Digital Signature Algorithm (ECDSA).
As mentioned by Antonopoulos, which one of these that would be compromised by QCs (assuming no quantum-proof amendments to Bitcoin’s blockchain) would also depend on public and private keys, and whether wallet addresses have been reused or not.
In regards to Bitcoin mining, its SHA-256 Proof-of-Work (PoW) system with its continuously increasing hash rate (generally speaking) renders it the most secure blockchain at present, at least compared to others that utilise PoW.
Right now, it would cost tens of billions of dollars to obtain majority control of its mining operations (a.k.a. 51% attack). As Bitcoin continues to grow, the hash rate will only get higher (at least that’s what is forecast), making it even more secure from such an attack.
What is being done to address to allay related concerns?
Ethereum co-founder Vitalik Buterin has shared his insights into QC recognising the need to upgrade Ethereum to resist possible attacks.
Vitalik Buterin
Regardless of whenever QC becomes visibly present in this sector, Ethereum will have a lot at stake, whether this entails benefits or problems associated with the technology in focus.
This is due to the enormous number of Dapps running on and entities affiliated with Ethereum; this translates to huge amounts of money, time and effort being dedicated to the leading smart-contracts platform.
Thus, with massive vested interests in this protocol, and its corresponding coin, ETH, the time will come for Ethereum developers and other participants to bring quantum-proofing to the forefront.
Charles Hoskinson, a renowned spokesperson for Cardano, spoke about the measures being taken to apply quantum resistance into the above said blockchain. He also recognises that QC would realistically be problematic sometime in the next 10–20 years:
Charles Hoskinson
I would consider this to be a sensible approach in many ways. Whilst all blockchains ought to be prepared for probable QC attacks, it should be at the expense of users, at least not without a compelling argument right now.
In the course of time, paying a higher price will be justified, especially as a precautionary measure to safeguard an entire system.
Moreover, the crypto sector is highly competitive and complex. Many developers would acknowledge that there are other priorities at present, notably in regards to improving scalability, interoperability, running Dapps, etc., all without compromising security.
Having said this, it would be naïve to continue ignoring the development of QC in the coming years, particularly if the digital-asset space were to continue growing in dollar value (in spite of a downturn so far this year).
What about QC as an overall cybersecurity threat?
Whilst QCs will provide several benefits to multiple businesses, various sources note that it is paramount to take the peril seriously, particularly with malicious actors banking on scraping: stealing sensitive information today and aiming to decrypt it in future with these advanced computers.
With cybercrime forecast to cost more than $10 trillion annually worldwide by 2025, the stakes are high. Criminals in this realm would seek to exploit any way possible to extort victims. Thus, being vigilant, building one’s computer/technological literacy are starting points to help mitigate risk and/or financial loss from malware, ransomware, spyware, scams, etc.
For companies that see the merits behind quantum computing, a vast range of companies are currently (or planning on) investing R&D into this space. Some have gone a step further and are preparing for the anticipated growth in quantum security down the track.
Perhaps I am taking a more pessimistic (or even ‘alarmist’) approach towards society’s preparedness (or lack thereof) of QC, let alone many issues worldwide, but I am mindful of Moore’s Law, as illustrated in the graph below. It is a stark reminder to not underestimate the pace of technological change.
To reiterate, QC does not pose an imminent danger, but according to the abovementioned experts and my general research, it will become a major one if certain blockchains (let alone other industries) remain complacent as the technology continues to improve.
Paradoxically, in the grand scheme of things, it wouldn’t matter so much whether or not blockchains get compromised by QC. At this point, companies and governments that have stayed unequipped for its eventual arrival will be obliterated by said technology; we would have bigger fish to fry, particularly when the stakes are high.
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Disclaimer: I hold varying amounts of all of the cryptos listed herein.