The cryptographic protocol used for Bitcoin network security is unbreakable by today’s most powerful computers. However, within a decade, quantum computing will likely be able to break existing encryption protocols.
The power of quantum computers lies in the fact that they can carry out many computations while simultaneously considering several different configurations. As a result, they are much faster than traditional computers. For example, Google’s 54-qubit Sycamore processor completed a computation in 200 seconds that would have taken the most powerful supercomputer in the world 10,000 years. Due to this immense power, quantum computers could pose threats to blockchain networks by 2030 by facilitating storage attacks or attacks on in-transit transactions. This could expose users across the blockchain space, including the growing user base in Web3 and the metaverse, as well as those in the crypto world.
However, while the rise of quantum is a concern, the further evolution of cryptographic encryption may be able to outpace that of quantum computing.
Storage attacks are likely within the next 10 years
Storage attacks involve a malicious party stealing from susceptible blockchain addresses, such as those where the wallet’s public key is visible on a public ledger. Around 25% of all bitcoins are vulnerable to this type of quantum computing attack as owners use un-hashed public keys or reuse Bitcoin addresses. If a quantum computer were powerful enough to decipher the private key from the un-hashed public address, the malicious actor could steal funds straight from a user’s wallet.
Of course, the simple answer is for crypto users to stop re-using crypto addresses or to store funds in locations with private keys, though this is much simpler in theory than in practice. Luckily, the quantum computing power required to carry out such attacks is currently orders of magnitude above what currently exists. But that will change by 2030, as the number of qubits explodes from around 100 in 2020 to above 10 million.
Scope of transit attacks devastating but decades away
Alternatively, a quantum computing attack could occur to blockchain transactions in transit. However, such attacks are incredibly challenging to carry out as they must happen quicker than the blockchain miner can execute the transaction— something that usually takes only a few minutes on networks like Ethereum and Bitcoin. And because such attacks would require billions of qubits, this is likely a few decades away. However, such attacks would apply to all transactions, so the threat is therefore much grander and more pernicious. Protecting against these in-transit quantum computing attacks by mid-century will require changing underlying cryptographic blockchain signature algorithms.
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By GlobalDataPreparations for a post-quantum future must begin now
Both proof-of-work (PoW) and proof-of-stake (PoS) blockchains will be vulnerable to attacks if the underlying encryption schema were weakened. Specialized ASIC chips manufactured specifically for block mining offer a modicum of protection for PoW blocks. Though hashing may be less exposed, risk remains as quantum computing threatens blockchain system authenticity and key ownership. For now, hardware wallets offer the best security to guard cryptographic keys. However, though they offer greater protection than mobile- or laptop-based wallets, they are hard to upgrade.
When quantum computing is sufficiently powerful enough to pose a real, credible threat to blockchain networks there will still be ways to protect against malicious actors. And fortunately, only a handful of cryptographic techniques will need replacing. Digital signatures and key agreements will be areas of active research to secure a post-quantum encryption future. Technologies in development that promise to be more resistant to quantum-computing-powered attacks include directed acyclic graph (DAG), a DAG-based technology called ‘block lattice cryptography’, and quantum key distribution (QKD). Many of these will look at problems that have not been used in classic encryption to date. NIST, the National Institute of Standards and Technology, is currently responsible for encryption standards in the US, and in July 2022 it announced a process to test and standardize post-quantum public key encryption.
Could China throw a spanner in the quantum computer works?
But the quantum computers discussed here refer only to the largest publicly disclosed systems. China is among the nation-states that have been ‘going dark’ on their quantum research. We cannot truly know whether a meaningful threat exists to today’s encryption standards. By occluding such quantum capabilities, it may be that rather than a gentle erosion of encryption standards, there is a sudden, devastating break for cryptocurrencies and the industries that rely on them. In the coming years, this will include cryptocurrencies, the metaverse, and the next iteration of the internet, web3.
