The security of any crypto asset depends on cryptographic algorithms working in the background during each transaction. Cryptographic technologies have played a critical role in ensuring the stability of blockchains ever since the inception of these technologies.
With time, scholars have also researched the effect of future inventions on security technologies. Some of the examples of such research include numerous investigations regarding the possible effects of quantum computing on cryptography.
Quantum computing is a branch of science researching the possibilities of performing computations based on the laws of quantum mechanics in less time than classical computing allows for.
Consequently, the effect of quantum computing on the security of cryptocurrencies has come into consideration. Present blockchain networks operate through the use of cryptographic algorithms.
However, even though these processes cannot be breached by modern computers, they are being analyzed to determine how they will respond to future quantum computing algorithms.
How Cryptocurrency Security Relies on Cryptography
The modern cryptocurrency network relies heavily on public-key encryption. Public key encryption involves two keys. One is the private key, used to conduct transactions, and the other is the public key, used to authenticate transactions conducted with the private key.
The security of this process is based on functions that are simple to execute in one direction but extremely hard to execute in the reverse direction.
Cryptocurrency transactions depend on this mechanism for:
- Transaction validation
- Confirmation of wallet ownership
- Security of network
- Digital signature validation
Without these cryptography techniques, transaction validation of the blockchain would not be feasible.
Why Classical Computing Finds Cryptographic Keys Difficult
Classical computers use bits for their processing. These bits can be either 0 or 1. In solving cryptography-related issues by brute force, classical computing systems must try all possibilities.
Source: Ledger
The larger the key, the more possibilities there are.
| Key Size | Number of Possibilities |
| 4 bits | 16 |
| 5 bits | 32 |
| 6 bits | 64 |
| 128 bits | 340 undecillion+ |
| 256 bits | Closer to the estimated number of atoms in the observable universe |
Bitcoin wallets usually use seeds generated using a 128-bit or 256-bit encryption standard. With that in mind, brute-force attacks are not feasible at those levels of encryption.
As research in cryptography suggests, a mere 55-bit key can take thousands of years to be searched using classical computers.
Issues related to Quantum Computers and Cryptocurrency Security
Unlike traditional computers that use bits, quantum computers use quantum bits or qubits. The phenomenon is referred to as superposition.
Furthermore, quantum computers utilize entanglement to calculate faster than conventional computers. While exploring quantum computers and cryptocurrency protection, one typically considers two algorithms.
Shor’s Algorithm
Shor’s Algorithm is an algorithm designed to perform mathematical operations on factoring and discrete logarithms more efficiently than classical algorithms.
Many encryption schemes are based on the complexity of the problem; therefore, Shor’s Algorithm is regarded as the greatest theoretical threat to blockchain encryption algorithms.
Grover’s Algorithm
Grover’s Algorithm provides a quadratic speedup instead of an exponential one for searching problems.
Its possible impacts might include:
- Quicker brute-force key attacks
- Better search performance for hashing operations
- Lower effective security offered by symmetric key algorithms
Nevertheless, studies suggest that increasing key lengths can largely mitigate the advantages of Grover’s algorithm.
Existing Quantum Threats Are Limited
Although various quantum-related projects are underway, fault-tolerant quantum computers that pose a threat to the cryptography of cryptocurrencies have yet to be developed.
Another misconception is the belief that quantum computers can check all possible key combinations almost immediately. According to experts, this is not what quantum computing is about. Quantum algorithms bring benefits for particular kinds of structurally organized tasks.
Therefore, any threats related to quantum computing can only become real in case of further advances in technology, which have yet to be reached.
At present, cryptocurrencies continue to function under cryptographic systems deemed safe against the power of today’s computers.
Advances in Quantum-Resistant Security Research
Current research into quantum-resistant technologies includes approaches to address the potential impact of quantum computers.
Four key post-quantum approaches are currently being explored.
| Post-Quantum Approach | Focus |
| Lattice-Based Cryptography | Lattice problems in mathematics |
| Hash-Based Cryptography | Security of hash functions |
| Code-Based Cryptography | Reed-Solomon codes |
| Multivariate Cryptography | Polynomial equations |
The speed advantage that mining offers is relatively less significant than the theoretical implications of Shor’s Algorithm for public-key systems.
Observations include:
- Mining works on hashes, not on the recovery of public keys.
- Grover’s Algorithm provides only quadratic improvements as opposed to exponential improvements.
- Hash functions may be enhanced if needed.
- There are practical engineering challenges involved.
Consequently, current research does not indicate any threat to Bitcoin mining activities.
Migration Challenges for Blockchain Systems
If quantum-resistant algorithms are required, blockchain systems will definitely need changes. Some possible migration strategies may include:
- Protocol adjustments
- Changes in wallet software
- Infrastructure improvements
- Reaching network-wide consensus
Scientists also emphasize that Bitcoin’s public keys are disclosed only after spending coins from the given address. Hence, unspent addresses are a much safer option than those whose public keys have been published online.
Conclusion
The connection between quantum computers and cryptocurrency security continues to be relevant in terms of blockchain technologies getting ready for future breakthroughs in computer technologies. Even though no quantum computers capable of cracking contemporary encryption yet exist, research on how to ensure safety from them proceeds.
FAQs
What is a quantum computer?
Quantum computer refers to a sophisticated type of computer technologies which use quantum bits or qubits in order to function.
Could quantum computing attack Bitcoin now?
No. Quantum computers with capabilities to break Bitcoin’s cryptography systems haven’t been built yet. The technology used in Blockchain cannot be compromised by any current computational power.
Why is there a danger of quantum computers regarding cryptocurrency?
Experts are investigating the potential ability of quantum computers to solve some mathematical challenges more efficiently compared to classical computers.
