Most cryptocurrencies ride on blockchain technology and while the technology is obviously revolutionary, it has its own Achilles’ heel. The best part of blockchain transparency and immutability. Immutability brings with it the trustless system which cryptography and cryptocurrency depends on to rid 3rd parties.
But, did you know that blockchain is not 100% immutable as many think? Other than the 51% attack that is possible if few mining pools join hands, quantum computing is the real threat to cryptocurrencies and blockchain in general.
I mean, yes, on few occasions and because of the general good will among the market participants, 51% attack can be repelled through consensus but when fire meets with fire, it is the best tech that comes on top. I’m here to tell you this. If blockchain and cryptocurrencies continue using normal computers, then quantum computing power will most probably wipe out billions of dollars depending on blockchain immutability.
Understanding Quantum Technology
Quantum computing is a technology that will definitely spearhead new discoveries. Like blockchain is disruptive to centralization so will be the commercialization of quantum computing power to different sectors.
Unlike normal binary computers, quantum computers leverage on the inherent characteristics of atoms. Normal computers store information in two states. The machine binary states of 1 or 0. On the other hand, quantum computers can store information in more than two states. It can be 1 or 0 or a combination of both.
In quantum jargon, we refer this to as superimposition and entanglement.
To best understand qubits, think of a sphere. While normal computers would store their information at the North or South Pole, qubits would store theirs at any point of the sphere. It’s the superimposition bit that makes quantums to store large chunks of info but it’s the entanglement that comes with it makes the system unstable.
It’s a totally new playing field. With their mode of operation, quantum computers are perfect when it comes to solving complex mathematical problems, modelling and solving what normal computers can’t.
Here is the Threat Quantum Computing Poses on Blockchain
What is especially worrying for cryptographers is the ability of quantum computers to churn out very large prime numbers-fast. In cryptography, large numbers is the mesh that holds hash functions. Practically, if there is a computer that can calculate such numbers easily then there goes the hashing functions and private keys in that case.
When the blockchain of any cryptocurrency is not quantum resistant, then quantum computers can make changes on all blockchain transactions. The roll back will be like peeling a banana. In cryptography, if there are changes in transaction blocks then there goes the “privacy” in private keys and identity of public addresses. Reason? Quantum computers are technically powerful that normal hashes won’t cope. They will in turn crack private keys and link addresses within a blink of an eye.
Researchers are pulling their safety cards in the process. While there are potential solutions, it’s the money in the cryptocurrencies that calls for pragmatism before implementation. At the recent Financial Crypto 2018 Conference, there were highlights of the possible effects of quantum computing.
Fangguo Zhang, a cryptographer from Sun Yat-sen University calls for precaution saying:
“…we have to take precautions on the fast development of quantum computing such that if it becomes strong enough, we are able to update cryptocurrency systems as soon as possible.”
Precaution it is and since the technology is not yet mainstream he proposes use of “Ideal Lattice” that will effectively make Proof of Work coin protocols as Bitcoin hashing algorithm resistant to quantum computers.
Remember, it’s these hashing or the digital signature algorithms that validate storage and transfer of coins. Zhang proposal will not only make the network quantum resistance but with Monero-like security features as stealth addresses, RCT and Ring signatures, privacy of coin holders will be safe.
Nonetheless, while it seems grand, implementation will be complex and actualization calls for a hard fork.
Many commentators think Zhang proposal is not feasible. Drawing lessons from the recent Bitcoin Segwit 2X hard fork proposal, not many investors are willing to lose money.
Besides Zhang solution, Ruffing, a security researcher from Saarland University thinks hiding public addresses before transferring coins to resistant addresses can be an appropriate fix for this. Alexei Zamyatin a researcher from Imperial College of London believes a soft fork can solve all this. All users need is education and urge to upgrade to quantum resistant addresses.
Quantum technology will surely be disruptive. Nonetheless, it’s also undeniable that it can open doors for innovative businesses even in blockchain. What if private key generation is possible through this qubit computer system?