Here’s a question: Should you be worried about quantum computing affecting public blockchains? If you don’t know what quantum computing is then sit tight and we’ll briefly explain why it is potentially a threat to encryption; in essence, your private keys that protect your cryptocurrency investments, or information held on the blockchain, could be at risk.
[wlm_private “Crypto Trader Pro – Monthly|Crypto Trader Pro – Yearly|Crypto Trader Pro (Lite)”]
Quantum computing has not quite yet cracked the code of our ridiculously long private keys, but there is a potential for that threat once the technology catches up to the innovative idea. For example, there was a sitcom in the 60s called Get Smart, where the agent had a phone in his shoe. Fast forward a couple years and Captain Kirk was using a com. From there, the cellphone tech only needed a little time to catch up to the innovative idea. And now, you can make calls from your watch, which has more compute power than the astronauts had to go to the moon – by a lot.
So let’s talk about quantum computing for a bit. Consider proof of work (PoW) cryptocurrencies on public blockchains are centered around the concept of using computing power to solve cryptographic puzzles which, in turn, adds blocks to the ever-growing blockchain. This process is fundamental to how Bitcoin transactions are authorized and in the absence of a centralized authority, which has given us a sense of security that no one entity or fail point will wipe out our data or crypto funds. Unfortunately, there is always a weak link somewhere and in the case of quantum computing, the argument is that our private keys are that weak point in a blockchain.
Quantum computers could, with their overwhelming computing power, crack the private key to render the encryption mechanism of crypto and blockchain-secured data useless.
What is Quantum Computing?
In a classical computer all data is stored as a sequence of binary numbers: 1’s and 0’s. This system was only used because it was practical for the hardware being used. Modern computers may seem incredibly complex, but they’re built from many millions of these simple on/off building blocks and the key is that each speck of data, each bit exists as a 0 or 1. The device determines the result based on the combinations you key in.
Quantum computers work very differently. Instead of working with classical bits, quantum computers use qubits, or quantum bits. A loose definition is that qubits can be in an unknown, undetermined state.
Still playing with 1’s and 0’s, but instead of being either or, qubits can represent a one and a zero simultaneously, only actually deciding what state they’re really accepting after you’ve performed your calculations. This makes quantum computers faster and more effective compared to the modern-day computer.
How is Quantum Computing a Threat to Cryptocurrency?
Cryptocurrencies that employ the proof of work (PoW) mechanism employ a puzzle that requires a complex equation with a known result. Classic computers often solve this challenge by using brute force methods meaning that they try every possible solution to the equation until the correct answer is found. This process is impossibly time-consuming and practically impossible for any human. However, quantum computers test all possible inputs at once and reveal what state they needed to be in for a specific result to happen. It becomes incredibly easy and fast to search for solutions to cryptocurrency puzzles.
Theoretically, with enough computing power, a quantum computer would be able to speed up this brute force process and break the encryption in public blockchain networks.
Consider this whole threat is based on Bitcoin hashing which is currently unbroken with current computer technology. So, how would quantum computing hack it? Well, with a little tip from reverse engineering of knowing the public key to brute force attack the associated private key with a quantum computer in a reasonable time frame. Researchers from Cornell University have predicted that quantum computing could crack the elliptic curve function, your private/public key match, in about 10 minutes by the year 2027. Cracking this would require public keys which are, obviously public on any block explorer.
Most popular cryptocurrency exchanges already work on this idea. They change the public key of your wallet after every transaction and this ensures that the public key is not used to trace back your transaction to your wallet. Quantum computers cannot similarly reverse the second HASH160 algorithm used to generate new addresses, so while it sounds threatening, at this moment, your keys are still safe.
Bitcoin funds and funds on public blockchain networks are currently safe from potential quantum computing threats as long as they are stored in wallets that are used only once for transactions. A wallet address that changes with every transaction is the key to avoiding loss of funds.
While quantum computing sounds like the Bogeyman of the future, it is currently not a threat. With that said, we may have a period where being prudent with our keys and transactions are necessary until Bitcoin Network’s algorithm is updated to accommodate future threats.
While we speak of mitigating the risks of such quantum computers, the best part is that they haven’t even been invented yet. It’s just theory right now and no one is quite sure when, if ever, these computers will be produced with enough qubits to crack the public key encryption. Large corporations such as IBM, Facebook and Google, as well as governments and intergovernmental organizations are spending billions of dollars working on research and development. No doubt, in a bid to track us all. But remember what I said in the beginning: development takes time to catch up to the innovative ideas.
As for your private keys; if it is to be assumed that quantum computing will exist in the future, then we need to assume that the Bitcoin network, and all blockchain projects, have an important security fork. Eventually, the tech will catch up – and by then, the innovative ideas will continue to be years ahead. Woe to any blockchain that doesn’t pay attention.
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.
Want to read the rest of the article? Join our pro-membership and receive all of the following:
✅Access to ALL content.
✅Access to the CTN editorial staff.
✅Access to our CTN trading dashboard.
✅Access to our exclusive telegram channel where all our pro-members and editorial staff are in.
✅Ability to request content/research material!