Quantum already threatens your cryptocurrency portfolio

Quantum computing and cryptocurrencies, two of the most interesting technological phenomena of recent times, could collide directly in the next years. New quantum computers, capable of accelerating the development of new drugs or revolutionizing the way we understand phenomena like climate change, could turn cryptographic problem solving into a game.

In this sense, many experts assure that the blockchain on which the operations of the main cryptocurrencies are developed, could be highly vulnerable to sophisticated attacks and the falsification of transactions, if the investment in security to protect the chain of blocks is not accelerated.

But how can blockchain security be attacked? Virtually all cryptocurrencies are protected against attacks with a technology known as public key cryptography. This system protects the operations we carry out using virtual currencies such as Bitcoin, encrypting the communication on the blockchain for anyone other than the recipient of the same. For this, the technology combines the use of a public key, which anyone can see, with a private key, which only the user who performs the transaction knows.

Compromising the public key

As security experts assure at Cnet, if the current progress in quantum computing continues, we will soon see how the new processors are capable of decrypting public keys. If this is the case, cryptocurrency operations would be facing the most serious threat they have had to do in their short existence: if this public key is compromised, an attacker could impersonate the legitimate owner of cryptocurrencies, NFT assets or of another type.

However, it is not something that will happen in the very short term. To decipher a public key, a quantum computer would need to work with thousands of qubits (IBM’s new quantum processor only reaches 127) and they would also need to do it with persistent qubits, capable of performing calculations for much longer than they are capable of doing in these moments.

The current technical limitations, however, will cease to be so in the medium term. In the first place, because it has already begun to experiment with computers that, when working with several processors, allow a computing power of thousands of qubits. Secondly, because new algorithms focused on error correction are also being developed, which will help the calculations become more and more sophisticated and take time.

As the American publication assures, echoing the words of Nir minerbi (CEO of Classiq Technologies), over the next five years quantum computers will already have enough power to decrypt the public keys of open blockchains.

Protecting the blockchain

The first to notice the risk that the development of quantum computing entails for their interests, are the organizations that are in charge of keeping the operation of some of the main currencies, chains or smart contracts. In fact, these organizations have long been working on the development of new “post-quantum” cryptographic techniques, also involving organizations such as the National Institute of Standards and Technology (NIST) of the US government and researchers from around the world.

  • Projects like Ethereum 3.0 They already include some ideas of how the chain could be protected against this type of attack. To see it in practice, however, we will have to wait a while, taking into account that we have been waiting for years for the development of Ethereum 2.0 to end.
  • Another possibility that is being worked on is developing blockchains from scratch, designed to respond to the challenges posed by quantum computing. Quantum Resistant Ledger and Bitcoin Post Quantum are some of the main projects.
  • Cambridge Quantum Computing, a startup working closely with quantum processor maker Honeywell, is developing quantum security technology that it claims “can be applied to any blockchain network” and that could secure both communications between computers and They store the blockchain data, such as the signatures used to encrypt and sign the transactions.
  • The Hyperledger Foundation, a business-oriented blockchain project, is starting work on post-quantum cryptography with Ursa, a new software library that can be applied to all projects that go on this type of blockchain.

In all cases, the post-quantum effort is however translating into much longer encryption keys, which in turn requires longer processing times. This means that the computing power necessary to host blockchains also has to increase and that the dream of real-time transactions and that one day can replace banks, is once again a little further away.

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