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Quantum computer threatens the existence of Bitcoin

Fujitsu has announced a 1000-qubit quantum computer is on the horizon. Should we now start to worry about the real possibility that quantum will be a crypto-killer?

If you stick around long enough in the tech sector, you'll notice that things come and go. The Y2K problem, the 'dotcom' crash of the late 1990s and early 2000s, the internet (just joking with that last one, but you never know). Bitcoin, and the blockchain in general, maybe another to add to that list if quantum computing gets its way.

Quantum computing promises big things, like solving almost unsolvable mathematical problems. However, the bad often comes with the good, and quantum computing may threaten our security and crypto. The dawn of the 1000-bit quantum computer is coming; some say this may be the final nail in the Bitcoin coffin.

Quantum bit stakes

Quantum computing differentiates itself from classical computing by using the fuzzy nature of the uncertain world of quantum mechanics. While our traditional computing uses binary notions of 0 and 1 to communicate operational instructions, quantum computing uses the principles of multiple states and superposition principles. Quantum computing puts the cat in the computer, or does it? The result is that sectors, including cryptography, chemistry, drug discovery, and banking, are pinning their hopes on this paradigm in computing to solve complex problems.

In the meantime, quantum computing has become a competitive sport, with companies vying for first place and crowned leader in 'quantum supremacy.' To be in the stakes to win at quantum supremacy, you need to build a quantum computer that has lots of qubits - the quantum equivalent of the classical computing bit: the more qubits, the more powerful the computer. Google claimed quantum supremacy in 2019 with its 53-qubit quantum computer, Sycamore. In 2021, IBM kicked Google off the quantum leaderboard with its 127-qubit quantum computer, 'Eagle.'

The latest challenger for the accolade of quantum supremacists is a collaboration between Fujitsu and Riken Research Institute (RRI). The partnership aims to deliver a 1000-qubit quantum computer sometime after March 2027. This super quantum computer is being touted as a Bitcoin killer; so should anyone with crypto be worried?

A quantum leap in risk

Since the advent of quantum computing, security experts have warned that quantum computers could be encryption killers. Kill encryption, and you kill the internet, at least the security of the internet.

In response, the National Institute of Standards and Technology (NIST) has been working on the risks that quantum brings to encryption. NIST is working on an initiative to develop quantum-proof encryption. This initiative, "Post-Quantum Cryptography Standardization," is working to create public-key cryptography standards that will stand the test of time and quantum computing. NIST describes the work as "solicit, evaluate, and standardize one or more quantum-resistant public-key cryptographic algorithms." The standardization being worked upon by NIST communities extends to blockchain cryptography.

Further to NIST's standardization work, the Quantum Consortium is building a cross-industry ecosystem to help ameliorate the risk of quantum to encryption. Dr. Michael Vermeer of the Quantum Consortium has placed a call for international collaboration to reduce the risk of encryption of quantum computing. Dr. Vermeer summed up the situation as follows:

The risk for quantum computing is real and urgent.”

The risk to our encryption systems is real, and now this risk extends to our money. Research is increasingly finding synergies between our traditional money systems and blockchain. This includes work by SWIFT on Central Bank Digital Currency (CBDC); SWIFT and Capgemini recently released a pilot on distributed ledger technologies for cross-border CBDC transactions. In the wrong hands, quantum computing could turn our economic infrastructures into chaos.

Shor’s algorithm breaking the back of a blockchain

Crypto, or rather the underlying technology of blockchain, has been critiqued recently. For example, blockchain had lately been under scrutiny, with some experts describing it as "technological fraud." But all this pales into insignificance if the very back of the blockchain can be broken.

The problem is this: large-scale quantum computing, such as the super quantum computer from Fujitsu-RRI, poses a threat to existing public-key/asymmetric cryptography. Quantum computing, because it can scale mathematical problems and solve them quickly, cuts through mathematics such as integer factorization (IF) and elliptic curve discrete logarithm (ECDL) like a knife through butter. Where classic computers would take thousands of years to break encryption, a quantum computer, under certain conditions, could crack the code quickly. Why is this possible?

Encryption algorithms, such as RSA, depend on the factorization of large integers being an impossible task. A technique that uses Shor's algorithm smashes this dependency, turning the quantum knife into a blockchain's back. Peter Shor is the man behind Shor's algorithm. Shor discovered (developed) a quantum algorithm that solves integer factorization in polynomial time, i.e., the solution is fast. Unfortunately, with the right quantum computer system, Shor's algorithm will break the classic encryption algorithms, such as RSA. In doing so, the security of the blockchain would be broken: simply put, the game is over.

Fighting back against the uncertainty of quantum

Fortunately, encryption algorithms and security measures are updated in line with technological advancements. If you look back at the old 2G/GSM technology, the security was poor by today’s standards.

At the time, the encryption algorithms used in 2G were A5/1 and A5/2, which are LFSR-based stream ciphers supporting 64-bit key length. To improve security, 5G networks use modern encryption algorithms, such as AES, that support 256-bit key length. As quantum computing increases power and speed, new algorithms and implementation approaches will evolve. NIST is on the quantum case with help from the wider community. NIST announced the first of four quantum-resistant algorithms in July. This first contender to save the backbone of the blockchain, and the underlying cryptography of online life, is the CRYSTALS-Kyber algorithm.

The wider community is working on measures to make a post-quantum future viable. For example, a consortium of JPMorgan, Toshiba, and Ciena, are working on Quantum Key Distribution (QKD) as a security measure against blockchain hacking by quantum computers. Yasushi Kawakura, Vice President and General Manager Digital Solutions Division of Toshiba America, Inc., said, "Based on the success of this project (QKD) we now have a proven and tested method for defending against quantum attacks on blockchain."

Quantum computing may have intrinsic power to break the blockchain and turn crypto into mush, but the security community is fighting back.

More from Cybernews:

Scientists are excited about taking the quantum leap

IBM builds super-fridge for quantum computers

Will quantum cryptography break classical encryption?

Doomsday clock: quantum computers will break our defenses in less than eight years

Quantum platform to boost scientific research

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