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The Hype Around Quantum Computing and Bitcoin's Demise

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As quantum computing continues to make strides in development towards a machine that is both practical and affordable, concerns on how this new wave of technology could affect not only Bitcoin and its underlying cryptography but also how we handle modern computing. But will quantum computing spell the end of Bitcoin?

Quantum Hype Facilitates Yet Another Bitcoin Obituary

Computers at their most basic level communicate and process data using binary bits, individual pieces of data represented as either zeros or ones. Qubits, on the other hand, can not only function as a zero or one but also as both simultaneously.

The full realization of the potential for quantum computing has still not occurred. But what is clear is that tasks that benefit from massive amounts of computing power, such as research and encryption methods, would take full advantage of the orders of magnitude increase in horsepower that quantum computing could provide.

Moreover, in Bitcoin’s current state, a quantum computer could easily decrypt the security measures in place of a user. Bitcoin uses the ECDSA algorithm; elliptic-based cryptography is not secure against quantum computing. Also, once an attacker uses a recovered private key to make new messages, this will destroy trust in the blockchain.

With a quantum computer, someone would be able to derive the private key using your public key “of only 128^3 basic quantum operations” using Shor’s Algorithm. While possible, it will not be for another two to three decades an attack of this nature is an immediate concern so Bitcoin ECDSA keys should be safe to use until 2030-2040.

According to Andersen Cheng, co-founder of British cybersecurity firm Post Quantum, “Bitcoin is definitely not quantum computer proof. Bitcoin will expire the very day the first quantum computer appears.” However, in the face of a threat from quantum computing, these experts disregard the ability of the Bitcoin community to mobilize and come to a consensus on a new encryption method or a new way of producing digital signatures.

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For an attack of this nature to occur, a quantum computer would require around 1500 qubits for an attack of this type to occur, according to current estimates. So far, general-purpose quantum computers struggle with keeping more than ten qubits, due to the inconsistency state and difficulty in keeping qubits stable.

The Bitcoin Community has Time on Their Side

So not only do Bitcoin developers and cyber security experts have ample amount of time to prepare for these problems, there are already methods of encryption that are resilient to quantum computing attacks. Also, quantum computing technology itself could be used to design new encryption methods as well.

Llew Claasen, executive director of the Bitcoin Foundation, stated to Newsweek that “many very smart cryptographers” are already building a solution and that the Bitcoin network has the potential to introduce 'quantum-proof' technologies gradually.

For example, Jonathan Jogenfors of Linköping University in Sweden has already outlined a ‘Quantum Bitcoin’ protocol, offering several advantages above the ‘classical’ Bitcoin protocol, such as increased transaction volume. Also, the paper presents a formal proof of counterfeit resistance, whereby anyone with access to a quantum computer will not be able to counterfeit bitcoin.

However, the article states that the protocol requires further research with regards to attacks. Nevertheless, the Bitcoin community is aware of the problem, and there is work being done to make the cryptocurrency ‘quantum-proof.’

The existing methods classified as ‘quantum-proof’ would include lattice-based cryptography, code-based cryptography, and multivariate cryptography. With Bitcoin design allowing it to change, a soft fork could be used to generate a new public key algorithm or an implementation of BIP could make Bitcoin secure against quantum computing before it becomes a problem.

Moreover, as stated above, quantum computing could be used to develop a new cryptographic method, such as quantum digital signatures, allowing Bitcoin and other cryptographic applications to remain secure in the face of new technology.

With the traditional banking sector is also at risk when it comes to the arrival of quantum computing, traditional media outlets are instead predicting the death of Bitcoin, which would be a much smaller target in this scenario. Moreover, no one knows for sure when quantum computing will be fully functional, giving the Bitcoin community precious time to brace for such a development.