Blockchain technology has the potential to revolutionise banking by removing intermediaries and delivering bank accounts to millions of individuals who are now unbanked around the globe. It’s possible that quantum computers, with their unimaginable capability, may revolutionise the pharmaceutical and material design processes.
Blockchain technology that supports cryptocurrencies may be exposed to sophisticated assaults and fraudulent transactions if quantum computing advances faster than attempts to future-proof digital money.
Technology known as public key cryptography is used to protect digital currency. For everyone besides the intended receiver, your online transactions and conversations are protected by the system. In order to use the technology, you must have a public key and a private key that only you can view.
Public key encryption can be cracked by quantum computers, which might pose a severe danger to the crypto world, where some currencies are worth billions of dollars. Once encrypted, attackers may pose as legal bitcoin, NFT, or other digital asset holders.
At some point in the near future, “all of the security assurances will be thrown out the window” by quantum computing, according to Dawn Song, a computer security entrepreneur and university professor in California. In the event that public key cryptography is hacked, users might lose their money and the whole system would be rendered inoperable.
In order to operate, quantum computers need to be able to manipulate data stored on qubits, which are subatomic particles like charged atoms. Quantum computers will require thousands of qubits to break encryption, much more than today’s machines can do. There will also be a need for persistent qubits, which can execute computations for considerably longer periods of time than are now achievable.
Quantum computer manufacturers, on the other hand, are hard at work trying to correct these flaws. Quantum error correction techniques are being developed to assist qubits conduct more complex and longer computations by increasing the number of qubits in machines.
Nir Minerbi, CEO of quantum software firm Classiq Technologies, said that “sufficiently powerful computers” will be ready in a few years for breaking open blockchains.
Developing a solution to the quantum computing issue of cryptocurrency
For bitcoin enthusiasts, the good news is that the quantum computing challenge can be solved by adopting the same post-quantum cryptography technology that the computer industry has already started creating. This is a long-term effort of the US government’s National Institute of Standards and Technology (NIST) to create quantum-proof cryptographic methods with the help of experts throughout the world.
Indeed, a number of blockchain and cryptocurrency projects are now developing quantum-resistant software.
As the second-largest cryptocurrency behind Bitcoin in terms of total value, the Ethereum project is preparing to move into the post-quantum age. During the 2019 StarkWare conference, Justin Drake, an Ethereum Foundation researcher, discussed quantum-resistant concepts for Ethereum 3.0. To be honest, that’s probably still a long way off. The current Ethereum 2.0 transformation will take years to complete.
Cryptocurrency and blockchain technologies are being developed for the quantum computing age by several individuals. That includes the Quantum Resistant Ledger and Bitcoin Post Quantum, both of which are unconnected to the original Bitcoin money despite their names. Quantum cracking may be prevented by using post-quantum algorithms.
Quantum security is being developed by Cambridge Quantum Computing, a start-up that has merged with the quantum computer manufacturer Honeywell, and may be used “on any blockchain network.” Data stored on blockchains and signatures used to encrypt and sign them are both aimed at being protected.
In a statement, Daniela Barbosa, executive director of the Hyperledger Foundation, said the organisation has began working on post-quantum cryptography via its Ursa initiative. In Hyperledger projects, Ursa is a library of cryptographic tools that may be used.
According to Peter Chapman, CEO of quantum computer company IonQ, a difficulty with post-quantum cryptography methods is that they often need larger numeric encryption keys and longer processing times. As a result, the computer power required to run blockchains might skyrocket.
Disparity in governance is an issue.
It is by design that many of the most popular cryptocurrencies like Bitcoin are supervised by everyone who participates in the cryptocurrency network. There must be a majority of participants who agree to “fork” the cryptocurrency in order to alter its internal workings, so that the currency may be upgraded.
Hunter Jensen, chief technical officer of Permission.io, a firm that uses bitcoin for targeted advertising, thinks that the true quantum test for cryptocurrencies will be governance structures, not technologies.
Cryptocurrencies with more powerful central authorities, like as Dash and its masternodes, or even “govcoins” issued by governments, might benefit from this kind of governance since they can act more quickly to implement post-quantum protection. Nevertheless, this raises a quandary in the crypto community, which is typically opposed to the concept of authority in general.
Decentralized crypto currencies will be struck hard if their communities are too sluggish and unorganised to respond, according to Andersen Cheng of Post Quantum, a London-based business that supplies post-quantum encryption technology.
Cryptocurrencies face other quantum issues.
In addition, quantum computers might disrupt the digital fingerprinting method known as hashing, which is used in blockchains. A relatively modest technological upgrade is expected to solve this problem, though.
When it comes to keeping track of one’s digital assets, bitcoin wallets are at risk. In order to access their assets on the blockchain, consumers require these wallets to hold their private keys. Success in an assault might lead to the loss of money.
“Forcing essential upgrades is a difficult task. That’s not an easy one to provide, and it’s also the most harmful, “said Joe Genereux of Brave, a browser that utilises its own Basic Attention Token (BAT) cryptocurrency for an ad system in which users are paid for their attention. “I believe that cryptocurrencies with stronger governance or post-quantum designs built in at an early stage would be able to circumvent this problem better.”
David Sacco, a professor of computer science at the University of New Haven, believes that humans would eventually adapt the technology of digital assets to deal with quantum computing’s issues.
That everyone may participate in the ecosystem, if they understand the technology, was what he remarked.