Quantum computers are an oft-discussed but little-understood corner of the computing world. Blame science fiction for that. Quantum computing is often used as shorthand for “really, really, really powerful computer.” The truth is a bit subtler. Quantum computers can solve certain problems much more quickly than traditional computers. This isn’t a catchall cure for computing ills, but it could create some sticky situations in the cryptocurrency arena. Specifically, it could make the “crypto” that underlies cryptocurrency obsolete very quickly.
We’re going to do a quick overview of what quantum computing is and, importantly, what it isn’t. Then we’re going to see how the evolution of quantum computing could potentially change the cryptocurrency landscape.
A computer is really a device for tabulating a set of on and off switches, represented by 1s and 0s. That’s a simple enough concept to grasp. Peel back the layers of any piece of software written in the last century, and you’ll find 1s and 0s at the very bottom.
Quantum computing takes into account a unique quirk of matter when it’s examined at the quantum level – that is, when you’re looking at pieces of matter that are extraordinarily small. Here, the Newtonian laws of physics are revealed for the approximations they really are.
If we think of a bit of data in a traditional computer – the 1s and 0s previously mentioned – as points on either end of a line, then qubits (or quantum bits) can be thought of as all the points along that line and in a three-dimensional sphere encompassing that line. In other words, information can be stored in a vast number of locations instead of at the 1 and 0 endpoints. That solves one of the traditional challenges of computing, designing a computer that’s powerful enough to sort through mountains of 1s and 0s quickly to arrive at the answer to a computational problem.
Here’s where it gets a little tricky and where physicist Erwin Schrödinger’s famous cat comes into play. Schrödinger introduced a problem to describe quantum states that goes basically like this. Imagine a cat in a box with a radioactive element that has an entirely random chance of triggering a device that would kill the unseen cat in the box. Until the box is opened, the cat is neither alive nor dead. Its status exists somewhere on that continuum.
This has been extrapolated to quantum computing to imply that a quantum computer can try all the possibilities between and around 1 and 0 simultaneously. What actually happens is that some of the possibilities cancel each other out, and the computer looks for patterns that reinforce each other in the direction of the right answer. That’s a massive improvement over traditional computers, but it only applies to very limited sets of problems.
Unfortunately for the crypto community, one kind of problem that quantum computers are particularly good at solving is cryptographic codes.
Bitcoin, at its heart, is a list of transactions on a distributed ledger. Each transaction is signed with a unique cryptographic hash. That’s what gives the Bitcoin blockchain its security and its concurrent transparency. You can see what’s happening, but you can’t see the computer-signed details behind it.
Each Bitcoin wallet is sealed with a private key that is used to access the blockchain and the Bitcoin contained on it. These private keys are incredibly difficult to break with conventional computing methods.
A quantum computer, however, is uniquely suited to break these kinds of codes.
Experts estimate that even primitive quantum computers will be able to reverse engineer private keys from public addresses by 2027. That’s a blink of an eye in the computing world, but it’s just far enough out to give Bitcoin room for widespread adoption. If there’s suddenly a system for breaking private keys in a society awash with Bitcoin, a big problem develops very quickly.
Quantum computers might also be able to attack Bitcoin at its source by implementing so-called 51 percent attacks by outracing traditional miners during the mining process, but the possibility of breaking private keys is the real threat in the Bitcoin arena. Potentially, a well-heeled hacker with access to a quantum computer could spend all day reverse-engineering publicly displayed Bitcoin keys to steal the funds contained in those keys’ wallets.
Crypto Strikes Back
It’s unwise to bet against technology, and that has been the case from fire on up. Tech giants like IBM are pouring resources into creating quantum computers, and they will likely be a widespread reality sooner rather than later.
Luckily, forward-thinkers in the crypto community have considered the threat that quantum computers pose to their platform and have devised a variety of workarounds.
Bitcoin’s developers have proposed several potential mitigation methods. The easiest consists of using a different public address for each transaction, which is widely regarded as an extant best practice. A quantum computer attempting to break this address would have to do it in the window between the transaction being sent and the transaction being encoded into a block. This would be a taxing feat for most quantum computers in even the most optimistic scenarios.
Another method involves using a different public key algorithm. Such algorithms are already in existence, but they haven’t yet been implemented due to the large size of each individual signature – 169 times larger than current signatures – and the need to only use each signature a limited number of times. Since one of the main complaints about the Bitcoin blockchain is its limited scalability, this avenue does not yet seem promising.
Another way to tackle the quantum computing problem is to use cryptocurrencies that are already quantum resistant, like IOTA. IOTA aims to be the platform for the development and implementation of a widescale Internet of Things architecture, whereby devices can speak freely to one another and to their environments without human interaction. Your watch can tell your door to unlock and your stereo to key up your favorite playlist, all while your self-driving car navigates itself into your garage. At the factory down the road, industrial machines hum away and continually tweak themselves to keep efficiency at its maximum.
In simplest terms, IOTA’s blockchain differs from Bitcoin in that its signature verification method requires each pair of public and private keys to be unique. That is, a public address can only be used once, and IOTA is tailored to deal with the scalability problems that result from that. This makes it resistant to the kind of codebreaking a quantum computer is tailored to do. An arms race, of sorts, could be imagined, but at least IOTA and quantum computing will start off on more equal footing than, say, Bitcoin and quantum computing.
Brave New World
Cryptocurrency might be on the bleeding technological edge, but the relentless march of technology rarely – if ever – stops. As quantum computing becomes a more widespread phenomenon, cryptocurrencies will have to grow and adapt to meet this potential threat. That could be a stumbling block to the already significant problem of adoption. The fact that it’s quantum computing, in particular, that makes up the stumbling block introduces a further hazard – quantum computing is just plain hard to explain.
To survive in this brave new world, the average crypto player might have to brush up on their elementary quantum physics and codebreaking savvy. These players may pine for the day when a 24-word mnemonic phrase seemed like an overly cumbersome bit of personal security.