Quantum computing is promising to be one of the biggest technological revolutions of the modern era.
By harnessing the power of quantum mechanics, machines will be able to achieve data processing of speed and complexity unattainable with current computers. Traditional computers are based on a binary model on a system of switches that can be either on or off, represented with a 1 or a 0.
Only small quantum computers have been built so far. Larger computers are theoretical or still kept secret. As the technology develops, we may soon be operating a computer wielding more raw mathematical power than all of our modern-day laptops, desktops, and supercomputers combined.
Now, Bitcoin is taking the world by storm. The decentralized digital currency is a secure payment platform that anybody can use. It is free from government interference and operated by an open, peer-to-peer network.
This independence is one reason Bitcoin has become so popular, causing its value to rise steeply. At the beginning of 2017, a single bitcoin was worth around $1,000. By December 2017, this had risen to around $19,000.
A crucial feature of Bitcoin is its security. Bitcoins have two important security features that prevent them from being stolen or copied. Both are based on cryptographic protocols that are hard to crack. In other words, they exploit mathematical functions, like factorization, that are easy in one direction but hard in the other at least for an ordinary classical computer.
Quantum computers can solve these problems easily. And the first quantum computers are currently under development. In this way, the blockchain system is “quantum safe” in that advances in computing power will not undermine the system’s security.
Proof of Work (PoW)
The threat of quantum computers to cryptocurrencies lies rather in the vulnerability of individual currency accounts, or wallets. Quantum computers have the potential to hack the codes implemented by individual users to authorize cryptocurrency transactions.
The paper presents a graph comparing the efficiency of current hashing strategies with eventual quantumization. The results show that the problem cannot become an issue for another 10 years but even following, there is no real threat to the existing Bitcoin network.
Posing a Threat to Signature
When a user makes a transaction using Bitcoin for instance, the amount of currency being sent must refer to an unspent amount previously recorded on the blockchain network. Users provide a private key corresponding to their cryptocurrency account or ‘address.’
These keys typically consist of a 64-character long combination of letters and digits. In order to utilize the bitcoins of another user, a hacker would have to produce the exact key combination linked to the address. This has been considered mathematically unfeasible. Until now.
While hacking a cryptocurrency key would be nearly impossible using a binary computer, quantum machines will eventually achieve this capability through their sheer processing power. With the capabilities of quantum computers doubling every 18 months, this scenario is not far from becoming a reality.
Problems and Solutions
There is an enormous and precise brain trust behind this technology as compared with, for example, the Federal Reserve, the banking system, and existing fiat currency.
The problems in the fiat status quo are enormous enough to fill whole libraries (starting with certain obvious problems: no one knows how much money the system produces, or how much crisis risk is present at any time, not even the people charged with managing the system). The problems revealed themselves in 2008.
There have been no revisions made to the system via technological advancements that can prevent a repeat of that experience.
Political economy is not about generating perfect solutions but rather choosing among options to find the best one while supporting adaptive institutions that deal with real threats with real solutions. The brilliance of cryptocurrency is that it rallies around truth, and never stops improving to reveal ever more of it.
All the above points are a reasons enough which leaves us with an urgent question:
How secure is Bitcoin to the kinds of quantum attack that will be possible in the next few years?
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