How Will Quantum Computing Affect Blockchain?

There has been much discussion concerning the impact of quantum computing on Blockchain. This blog aims to show how quantum computing will affect the Blockchain. The truth is that both of these technologies are fresh and revolutionary in some ways. Although Blockchain provides a platform for conducting transparent and hassle-free transactions, quantum computing is the next phase of computing devices that will make every task simple and quick.

But what exactly does quantum computing mean for the future of Blockchain? Is there a threat to blockchain security from quantum computing? We must first look into its objectives and the results it has achieved before we can address this problem. It is essential to analyze how the technology will impact blockchain projects. We’ll also learn what this means for the decentralized environment.

What is Quantum Computing?

To understand the security risk posed by quantum computers, it is necessary first to know how they differ from classical computers. A traditional computer employs a base 2 numerical system: it understands, analyzes, and sends data only in bits. Each bit can only have one of two values: 0 or 1. Consider each bit a light switch that can be turned on or off.

Quantum computers, on the contrary side, make use of qubits that can retain two places at the same time. (A qubit, for example, may simultaneously have the values 0 and 1). This process, known as superposition, is quantum computing’s hidden weapon. Superposition reduces the number of operations performed by the computer to resolve a problem. As a result, quantum computers can process numerous complex queries at the same time.

Many computer experts believe that a quantum computer will be able to easily break current cryptographic techniques because quantum computers are capable of carrying out more operations per second than a classical computer.

Different Types of Quantum Computing Attacks

Quantum computing attacks are cyber-attack that utilizes quantum computers’ power to break through existing data encryption. Because of quantum computers’ increasing popularity and availability, these assaults have become more common in recent years. 

A malicious party attempting to steal money by targeting vulnerable blockchain addresses, such as those where the wallet’s public key can be seen on a public ledger, is a storage attack.

Because owners use un-hashed public keys or reuse BTC addresses, four million Bitcoin (BTC), or 25% of all BTC, are vulnerable to a quantum computer attack. The quantum computer must be powerful enough to decode the private key from the un-hashed public address. If the private key is successfully decrypted, the malicious actor can steal funds directly from the user’s wallet.

Experts estimate that the computing power needed to carry out these attacks will be millions of times more remarkable than today’s quantum computers, which have less than 100 qubits. Even so, quantum computing researchers predict that the number of qubits in use will reach 10 million in the next ten years.

A malicious party attempting to steal money by targeting vulnerable blockchain addresses, such as those where the wallet’s public key can be seen on a public ledger, is a storage attack.

A transit attack could be launched by someone with access to a powerful quantum computer to steal money from a blockchain transaction in transit. This attack has a much broader scope because it applies to all transactions. On the other hand, carrying it out is more difficult because the attacker must finish it before the miners can perform the transaction.

An attacker typically has only a few minutes due to the confirmation time on networks such as Bitcoin and Ethereum. Because hackers need billions of qubits to carry out such an attack, the risk of a transit attack is much lower than that of a storage attack. Nevertheless, users need to be aware of it.

It is difficult to protect against attackers while in transit. To achieve this, the blockchain’s underlying cryptographic signature algorithm should be modified to resist quantum attacks.

Is Quantum Computing a Threat to Cryptography?

One primary concern with quantum computing and blockchain is that quantum computers could beat blockchain encryption, effectively ending secure cryptocurrency as we know it. 

Quantum computers may be especially effective at breaking cryptographic passwords, presenting a new cryptographic challenging task. Public-key cryptography is used to secure cryptocurrencies. The technology ensures that your messages and online transactions are encrypted and secured so that only the intended recipient can see them. The system combines a public key that anyone can see with a private key that only the owner can see. 

In light of current developments, quantum computing will be able to break public key encryption, posing a significant threat to the crypto industry. If quantum encryption can overcome blockchain cryptography, it could result in massive cryptocurrency thefts and massive disruption of the entire crypto industry, if not collapse. According to one Deloitte study, 25% of bitcoin can be stolen in a single attack.

When implemented by a quantum computer, a well-known theoretical computer algorithm known as the Shor function can, in theory, solve for the prime factors that are currently hidden by elliptic-curve multiplication. This type of multiplication is used for hashing that is nearly impossible to reverse (at the moment) (i.e., look for the original numbers that were multiplied to form the private key.).

Researchers calculated that a classical computer would need 340,282,366,920,938,463,463,374,607,431,768,211,456 basic operations to determine a private key associated with a public key using elliptic-curve multiplication. That could take thousands of years.

A quantum computer, in contrast, according to the same calculations using Shor’s function, would need only 2,097,152 basic operations to determine the private key associated with a public key. And quantum computers, on the other hand, could take only a few hours. However, it is essential to note that mainstream quantum computers have yet to develop the ability to use Shor’s function. It is still being determined when this functionality will be fully matured.

Aside from breaking blockchain encryption, another issue is that quantum computers could replace traditional computers for cryptocurrency mining. If these computers can mine exponentially faster than traditional mining equipment like ASICs, as is assumed, it could lead to volatile asset prices, 51% attacks, and excellent centralization of mining power. Nevertheless, this is primarily a problem for proof-of-work blockchains like Bitcoin and would have little impact on proof-of-stake-based consensus models in a broad sense. Because of concern for the environment and other factors, most proof-of-work blockchains, such as Ethereum, are switching to proof-of-stake and other consensus models that do not require powerful computational mining.

Even after these calculations and projections, not all experts believe that quantum computing can successfully hack blockchains and make traditional cryptography useless. Some believe that bitcoin’s SHA-256 encryption is quantum-resistant. Even if quantum computers can break current blockchain cryptographic techniques, it may take 10-20 years, giving blockchain cryptographers a significant head start in developing new and more robust encryption technology.

Furthermore, elliptic curve cryptography’s most popular substitute, RSA encryption, might resist quantum attacks. While elliptic curve cryptography is more secure than RSA encryption for traditional decryption, experts believe the opposite could be true for quantum decryption. Additionally, even though RSA turns out to be “quantum hackable,” soft forks and frequently changing wallet addresses might reduce quantum computers’ ability to destroy blockchains and steal cryptocurrency.

What does this Signify for Bitcoin and Cryptocurrency Investors?

More excitingly, blockchain technology is gaining popularity simultaneously with quantum computing. Some developers are already thinking about post-quantum cryptography. Because of this, experts predict that they will succeed in creating cryptographic techniques that quantum computers cannot decode.

But one of the most attractive aspects of blockchain is its nearly unbreachable security. At the very least, the risk of bypassing such safeguards is alarming, and cryptocurrency investors should pay attention to quantum advances.

Individual cryptocurrencies may need to upgrade to post-quantum cryptography methods. It will be interesting to see which digital currency startups can stay ahead of the competition.

Occasionally, cryptocurrency investors need to move their assets to more secure wallets. These non-transferable currencies may also be more dangerous, given that data company Chainalysis estimates that 20% of Bitcoin needs to be added or stored in wallets that people cannot access.

It will likely be easier to manage the transformation if you store your assets on a cryptocurrency exchange. But if you keep your cryptocurrency assets in a decentralized wallet, you should be even more careful and aware.

What can one do to Mitigate the Risk of Bitcoins being Stolen by an Adversary with a Quantum Computer?

P2Pkh addresses that haven’t been used to purchase Bitcoins are safe because their public keys aren’t yet public. This indicates that your Bitcoins should not be susceptible to a quantum attack if you move them to a new p2pkh address.

This method has the drawback that numerous Bitcoin users need to locate their private keys. These coins are not transferable and must be claimed by the first person to construct a comparatively big quantum computer.

To deal with this issue, the Bitcoin community could agree and issue a deadline for people to move their coins to a secure address. Coins in unsafe addresses would stop working after a set amount of time (Technically, this means that the miner will reject transactions from these addresses.). Before taking such a brave step, careful consideration is required, not to mention how challenging it would be to reach an agreement on such a delicate subject.

Measures to Protect Against Quantum Computing

Quantum computing still needs much work before it can be considered a legitimate threat to blockchain technology.

Furthermore, by the time quantum computers are widely available, blockchain technology will likely have developed to address the issue of quantum security. There are already projects such as Iota that use quantum-resistant directed acyclic graph (DAG) technology. Unlike blockchain blocks, directed acyclic graphs are composed of nodes and the connections between them. The records of cryptographic transactions are thus represented as nodes. Afterward, the information about these transactions is piled one above the other.

One other quantum-resistant DAG-based technology is block lattice. Blockchain networks, such as the QAN Platform, use the technology to help developers to create quantum-resistant smart contracts, decentralized applications, and digital assets. Because it is based on a problem that a quantum computer may not be able to solve quickly, lattice cryptography is resistant to quantum computers. This problem is known as the Shortest Vector Problem (SVP). The SVP is a mathematical problem determining the shortest vector in a high-dimensional lattice.

The SVP is thought to be difficult for quantum computers to solve due to the inherent nature of quantum computing. A quantum computer can use the superposition principle only when the qubit states are fully aligned. When the states are unavailable, it must rely on more traditional computation methods. Therefore, it is doubtful that a quantum computer will be able to solve the SVP. Because of this, lattice-based encryption is resistant to quantum computers.

The other quantum-resistance technology includes post-quantum cryptography, which is developed to create a secure cryptographic system against quantum and classical computers and can collaborate with existing communication protocols and networks.

Even traditional organizations have begun to implement quantum security measures. JPMorgan and Toshiba have collaborated to create quantum key distribution (QKD), a quantum-resistant solution. QKD uses quantum physics and cryptography to allow two parties to exchange confidential data while simultaneously identifying and dodging any attempt by a third party to eavesdrop on the transaction. The idea is a potentially helpful security mechanism against future hypothetical blockchain attacks by quantum computers.

Resolving the Quantum Computing Issue with Cryptocurrency

The most significant feature for cryptocurrency enthusiasts is that the quantum computing problem can be solved using the same post-quantum cryptography technologies that the software industry is currently investigating. To stay ahead of the competition, the United States National Institute of Standards and Technology (NIST) has worked for several years with experts worldwide to develop quantum-proof cryptography algorithms.

So many Bitcoin and blockchain projects, for example, are working to develop quantum-resistant software:

• The Ethereum project created the second-largest cryptocurrency in terms of the total value, chasing hardly Bitcoin. It has now started to trace a post-quantum route. Justin Drake, an Ethereum Foundation researcher, spoke about quantum resistance concepts in Ethereum 3.0 at the StarkWare conference in 2019. However, that is still a long way off. It will be worthwhile to wait for the transition from Ethereum 1.0 to Ethereum 2.0.

• Cambridge Quantum Computing and Honeywell have teamed up to develop quantum security technology that can be deployed on any blockchain network. It aims to secure the connections between machines that store blockchain data and the signatures required to encrypt and sign it.

• Several people are working on new cryptocurrencies and blockchain technology for the quantum computing era. Even after their names, Quantum Resistant Ledger and Bitcoin Post Quantum are unrelated to the original Bitcoin currency. These attempts utilize post-quantum algorithms to protect against future quantum breaking.

• The Hyperledger Foundation, an open-source software initiative focusing on corporate blockchain applications, has reportedly started working on post-quantum cryptography through its Ursa effort, according to Daniela Barbosa, executive director of Hyperledger. Ursa is a cryptographic software package that can be used in Hyperledger projects.

According to Peter Chapman, CEO of quantum computer manufacturer IonQ, one issue with current post-quantum cryptography methods is that they frequently require large numeric encryption keys and longer processing times. As a result, the computing power required to host blockchains may increase significantly.

Is the Bitcoin Blockchain Inherently Resilient to Quantum Attacks Now and in the Future?

Bitcoin’s protocol was designed with quantum computers in mind, so it has some built-in resistance. The SHA-256 hashing algorithm, which Bitcoin uses, is considered partially quantum-proof. Because Bitcoin addresses can only be used once, a user’s public key is only revealed when the user sends Bitcoin. In theory, a quantum computer would only have a narrow window to find the private key between when the transaction is sent and validated.

Other platforms and developers are taking the issue seriously, in addition to Bitcoin and Bitcoin-based blockchains, because blockchains can only empower trust if they are tamper-proof. To fully address the potential vulnerability to quantum computing, blockchain developers should take additional precautions by developing their platforms’ native security mechanisms.

Conclusion

Quantum computers pose a significant threat to the Bitcoin blockchain’s security. Approximately 25% of Bitcoins in circulation are currently vulnerable to a quantum attack. Transferring your Bitcoins to a new p2pkh address is a good idea if you have them in a vulnerable address and think quantum computing has advanced more than is generally believed (don’t forget to create a secure backup of your private key).

Even if your Bitcoins are safe in a new p2pkh address, you may still be impacted if many people do not (or cannot) take the same security precautions.

Even if everyone follows the same safety precautions, quantum computers may eventually become so quick that they will affect the Bitcoin transaction system. The Bitcoin blockchain’s security will be fundamentally impacted in this case. The only option in this situation is to switch to post-quantum cryptography, a new variety of cryptography thought to be inherently immune to quantum attacks. These types of algorithms pose additional challenges to the usability of blockchains and are being researched by cryptographers all over the world. Future research into post-quantum cryptography will eventually bring about the necessary change to enable the development of robust and future-proof blockchain applications.

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