Why Quantum Computers Could Destroy Cryptocurrencies

An actively developed quantum computer will be able to destroy traditional cryptographic systems. In the last three months, tech giants such as Google and Intel have demonstrated a number of innovative products in this regard. In January, Intel reported the creation of a 49-kilobit Tangle Lake quantum chip, in February the Dutch company QuTech, jointly with Intel, developed a programmable two-qubit quantum computer, which is designed to simplify the practical application of quantum technologies, due to placement on a silicon chip. And recently, in March, the quantum computing lab of Google introduced the 72-kbit quantum processor “Bristlecone,” which, as the company promises, will be able to surpass any supercomputer.

The need for a transition to quantum-resistant cryptography (resistant to decoding) has already been confirmed by the U.S. National Institute of Standards and Technology and the U.S. National Security Agency. And although there are disagreements as to how quantum computing will be realized and whether at all, many researchers of blockchain technologies are already developing new cryptographic systems, since all cryptocurrencies will be impacted, as modern digital signature algorithms become vulnerable. These algorithms generate pairs of public and private keys, which cryptocurrency holders use to store and transfer tokens. Public keys are visible to other users and are used to obtain cryptocurrency, whereas private keys allow sending tokens and should be kept away from prying eyes.

The capabilities of modern computers do not allow generating private keys using public ones, but for a quantum computer, this task will be quite feasible as it will be able to decrypt most cryptographic ciphers that determine how data, including private keys, moves through the Internet space.

A number of solutions for creating cryptographic algorithms that are resistant to quantum computing were proposed at a recent conference on financial cryptography in Curaçao. “As cryptographers, we need to take precautions in connection with the rapid development of quantum computing, so that if they become too powerful, we can update the cryptocurrency systems as quickly as possible,” said Fangguo Zhang, a researcher at Sun Yat-sen University and co-author of the study, entitled “Anonymous Post-Quantum Cryptocash.” The solution proposed by Zhang uses the so-called “cryptography on ideal lattices,” which, by replacing the digital signature algorithm, not only becomes stable to quantum computing but also protects privacy. According to the document, the scheme includes unbonded ring signatures and stealth addresses, which are already used in the anonymous Monero cryptocurrency.

Because of the complexity of this system, its implementation will require the creation of completely new cryptocurrencies, which will practically nullify the achievements of modern cryptocurrencies. Therefore, priority is given to those ways of achieving resistance which are based on the restructuring of existing cryptocurrencies. Tim Ruffing of the University of Saar and Alexey Zamyatin, a researcher at Imperial College London, are working on this. Zamyatin presented his idea in a recent study that describes the backward compatible soft fork. Ruffing sent a document under the heading “Transition to Рost-Quantum” in a closed mailing list for Bitcoin developers. It offers a two-phase transaction process that hides the user’s public key until coins are moved to a quantum-resistant address. “Even if it’s still a long way off, quantum security is important today,” Ruffing said.

Fangguo Zhang also stressed that cryptocurrencies are closely related to user facilities, and this presents a separate problem. In this regard, Ruffing and Zamyatin are independently working on ways of educating people in this area, as even if new secure addresses are created, users will have to transition to them. Zamyatin, who believes in the successful implementation of quantum-resistant cryptocurrency systems, noted: “We will have other problems if quantum computers do appear.”

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