Blockchain vs. Quantum computing is a technological confrontation. For the crypto sector, quantum clouds are forming on the horizon. Significant advances in quantum computing may theoretically derail the entire cryptocurrency sector, just as the emerging blockchain technology is gaining traction. However, quantum-proof coding is already in the developing stage by crypto experts.
Cryptocurrencies like Bitcoin (BTC) and others are developed on blockchain technology. It operates by dividing data into chunks that are then encrypted. This encryption enables financial transactions to be carried out without involving other beneficiaries such as banks and governments. It is also what quantum computing has the potential to reveal. By adding their incredible power to the process, quantum computers have the potential to revolutionize the way pharmaceuticals and products are designed.
So what’s the issue? The issue is that the blockchain accounting systems that supports cryptocurrencies may be vulnerable to sophisticated threats and forgery, if quantum computing progresses faster than the efforts to future-proof digital money.
Is quantum computing a threat to cryptography?
If you thought blockchain technology was difficult to grasp, quantum computing is an entirely different topic. Because quantum is easy to propose, it could transform everything. But this isn’t entirely accurate.
Quantum computing will resolve problems much more quickly than present computers- a million times faster.
Quantum computers may be particularly good at cracking cryptographic passwords, posing a new cryptographic challenge. Cryptocurrencies are secured via a technique known as public-key cryptography. The technology encrypts your messages and secures your online transactions so that the only intended recipient may view them. The system functions by combining a public key that anybody can view with a private key that only the owner can see. If the present development continues, quantum computing will crack public key encryption, posing a serious threat to the crypto industry. It will affect not only cryptocurrency trading but also currencies worth hundreds of billions of dollars.
Quantum computers manipulate data stored on qubits, which are materials like altered atoms subject to the odd physics that govern the ultrasmall. Quantum computers , for example, will require thousands of qubits to crack encryption, significantly more than today’s devices. Machines will also require permanent qubits, which will allow them to execute computations for significantly longer periods than is currently possible.
Makers of quantum computers, on the other hand, are working hard to fix these flaws. For example, they are cramming more qubits into computers and developing quantum error correction methods to aid qubits in doing more complex and lengthier operations.
“We think that sufficiently powerful computers will be available” for breaking blockchains open within a few years, according to Nir Minerbi, CEO of quantum software company Classiq Technologies.
What does this signify for Bitcoin and cryptocurrency investors?
The good news is that this is a well-documented issue. And it won’t happen tonight that quantum computers be able to crack encryption right away. Instead, we will know long before it happens, according to computer specialists.
More interestingly, blockchain technology is emerging simultaneously as quantum computing. Some programmers are already considering post-quantum cryptography. This is strengthening encryption that quantum computers can’t crack, and experts believe that they will attain success.
However, one of the most compelling features of blockchain is its almost untraversable security. At the very least, the risk of breaching such protection is concerning, and crypto investors should keep an eye on quantum advances.
Cryptocurrencies may need to update to post-quantum cryptography methods on an individual basis. It will be interesting to see which digital currency ventures manage to remain ahead of the curve.
Cryptocurrency investors will probably need to shift their assets to more secure wallets at some point. And, given that data firm Chainalysis believes that 20% of Bitcoin is presently missing or held in wallets that individuals can’t access, these untransferable currencies may be more vulnerable to threats.
It will most likely be easier to handle the transformation if you store your assets with a crypto exchange. However, if you store your crypto assets in a decentralized wallet, you may need to be extra vigilant.
Quantum computing’s ominous shadow
Regulators are generally cited as the greatest threat to cryptocurrency, but other technologies also pose a concern. For example, other technologies that render blockchain obsolete may emerge, just like Bitcoin did 12 years ago. Or else remove withdraw cryptography protocol from cryptocurrencies, like with quantum computing.
Existing cryptocurrency initiatives are already dealing with a slew of issues, ranging from scalability to long-term viability. However, given the magnitude of the threat, the industry must act quickly to guarantee that quantum computing does not imperil the security that forms its basis.
Resolving the quantum computing issue with cryptocurrency
The best part for the cryptocurrency enthusiasts is that the quantum computing problem can be overcome by using the same post-quantum cryptography technologies that the software industry is exploring right now. To keep ahead of the curve, the National Institute of Standards and Technology (NIST) of the United States has been collaborating with experts from all around the world for several years to build a quantum proof cryptography algorithms.
Several Bitcoin and blockchain projects, for example, are actively developing quantum-resistant software:
- The Ethereum project successfully established the second-largest cryptocurrency in terms of total value behind Bitcoin. It has now begun to map a post-quantum path. At the StarkWare conference in 2019, Justin Drake ,an Ethereum Foundation researcher, discussed quantum resistance concepts in Ethereum 3.0. But that’s probably a long way off. The shift from Ethereum 1.0 to Ethereum 2.0 will be worth waiting for.
- A merger of Cambridge Quantum Computing and Honeywell is working on quantum security technology that can deploy to any blockchain network. It visions to protect the connections between machines that store blockchain data and the signatures required to encrypt and sign the data.
- For the quantum computing age, several people are developing new cryptocurrencies and blockchain technology. For example, Quantum Resistant Ledger and Bitcoin Post Quantum are unrelated to the original Bitcoin money despite their names. To defend against future quantum breaking, these attempts use post-quantum algorithms.
- According to Hyperledger’s executive director, Daniela Barbosa, the Hyperlegder Foundation, an open-source software initiative aiming at corporate uses of blockchain, has begun working on post-quantum cryptography through its Ursa effort. Ursa is a cryptographic software package that Hyperledger projects may deploy.
According to Peter Chapman, CEO of quantum computer manufacturer IonQ, one issue with current post-quantum cryptography methods is that they frequently demand big numeric encryption keys and lengthier processing times. This might result in a significant rise in the amount of computing power required to host blockchains.
Issues with Decentralized governance
From the point of view of the chief technical officer of Permission.io, Hunter Jensen, a firm that utilizes bitcoin for a tailored advertising system, the true quantum test for cryptocurrencies is not the advancing technology but the governance structures.
Many cryptocurrencies, such as Bitcoin, are designed to be decentralized, with anyone who joins the network effectively administering it. However, people willing to optimize cryptocurrency’s inner workings must persuade more than half of its members to fork the coin into a new version.
Such governance might reward cryptocurrencies with greater central authority, such as Dash with its masternodes or even “govcoins” circulated by central banks, which can theoretically move faster to provide post-quantum security. However, it poses a problem in the crypto community, that constantly opposes the concept of authority.
According to Andersen Cheng, CEO of London-based business, Post Quantum (dealing with post-quantum encryption technology), “If their communities are too sluggish and unorganised to adapt, it will be the actual decentralized currencies that will be affected.”
Other cryptocurrency-related quantum issues
Another threat is that blockchains rely on hashing, a type of digital fingerprinting that quantum computer might disrupt. However this is likely to be remedied with relatively modest technological advancements.
Quantum computing may be vulnerable to bitcoin wallets, which users use to keep track of their digital possessions. These wallets hold individuals’ private keys to access their blockchain assets. A successful attack might result in the nullification of a wallet.
Then how do you make users upgrade their keys? Well, the answer is not so simple and it is perhaps the most hazardous aspect. According to Joe Genereux, a senior cryptography and security engineer at browser creator Brave, explained how the company’s own Basic Attention Token (BAT) cryptocurrency is used for a user-paying ad system. The cryptocurrencies with stronger governance or post-quantum designs built in from the start will be able to avoid this problem.
However, according to David Sacco, a professor at the University of New Haven, cryptocurrency’s organic, self-directed evolution predicts that individuals would upgrade the digital asset technology to overcome quantum computing’s hurdles. He explains ” that the significance of this ecosystem is that anyone who understands the technology can use it.”
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