Thanks to quantum computing, a technological revolution may be on the horizon. It is simply remarkable how much processing power has increased. According to Google, their latest quantum innovations can do jobs that ordinarily take 47 years to complete in a moment, and they’re 241 million times more powerful than earlier models.
Industry players are understandably worried about the potential effects of quantum computing on cryptocurrencies. The encryption behind digital currencies may be cracked in minutes once quantum computing is completely mature. Read on to discover how quantum computing poses a danger to Bitcoin, what the future holds for both, and what steps you can take to safeguard your holdings.
What is Quantum Computing?
Imagine a computer that can process data at the speed of light and with extraordinary intelligence. A system that processes information using bits—little switches that may be switched to 0 or 1—can function. An enhanced form of this employing specially designed bits called qubits is known as quantum computing.
It wasn’t until 1994 that Peter Shaw demonstrated how to utilize quantum computers to decrypt encrypted data, although Richard Feynman first presented the idea in 1982. Crypto is newer than this.
Superposition allows qubits to be both 0 and 1 simultaneously, which is impossible with normal bits. As long as you don’t stop it, it’s like tossing a coin: heads or tails.
Entanglement is another way that qubits may be connected. Here, the status of one qubit immediately impacts another, regardless of their physical distance from one other. Imagine rolling two magic dice, one on Earth and one on Mars. No matter where you are, the numbers will always line up.
Although entanglement and superposition are difficult concepts to grasp, they represent significant advancements in computing. They allow qubits to process numerous options simultaneously, speeding up problem-solving. Digital currency’s underlying code is ground-breaking in the field of cryptography.
While the promise of quantum computing is exciting, the potential devastation it may bring to the Bitcoin market is terrifying. Our next meeting will discuss the safety of digital currencies and the role of quantum computing.
How Quantum Computing Threatens Cryptocurrency
Thanks to quantum computing’s processing capacity, computers can now do things that would have taken an impractically long time or were previously impossible. This advancement in processing power might crack the encryption that protects bitcoins. Quantum computing can immediately crack cryptographic techniques, which are now inaccessible to regular computers due to a lack of processing capacity.
Public and private keys are essential for cryptocurrency transactions on blockchains. Constructing a private key only from a public key is not feasible now, and quantum computing’s capacity to tackle integer factorization and discrete logarithms could jeopardize this.
If this encryption became crackable, individuals using quantum computers could obtain secret keys and steal from cryptocurrency wallets, rendering the whole industry useless. If that weren’t terrible enough, blockchain itself would be in jeopardy. Thus, knowing the bigger picture in the blockchain vs. quantum computing conflict is important.
The Impact of Quantum Computing on Blockchain Technology
The use of distributed ledgers in blockchain technology has greatly improved network safety. A blockchain requires a network of many computers, often hundreds or thousands, to function. You’d need 51% of the network’s computing power to launch an assault, and there’s no single point of failure.
This cannot be accomplished on the largest blockchains, such as Bitcoin, without using a quantum computer to breach security measures and manipulate blocks and transaction histories.
Furthermore, it would impact electricity distribution throughout the network, which is already a major problem. The conflict between quantum computing and Bitcoin mining is another issue. The consensus mechanisms, such as proof-of-work (PoW) that validate and create new blocks in the blockchain, could make it easier for quantum computers to solve. The icing on the cake is that smart contracts’ security might be jeopardized.
Quantum Computing vs. Blockchain
However, blockchain technology may survive quantum computing. Hash functions, which are more resistant to quantum computers, support cryptography, data integrity, and blockchain security.
The hash function takes an arbitrary string of characters and uses mathematical techniques to transform it into a predetermined string. A hash combines data, such as a password, in a blender to create an unpredictable result.
This is believed to resist quantum computing since hash functions do not employ the same mathematical problems that quantum computers can solve, such as factoring prime integers. However, some think Grover’s method might compromise a hash function.
Quantum-resistant Cryptocurrencies: What are they?
Technology innovation is constant. Although Bitcoin and Ether are among the initial cryptocurrencies at risk from quantum computing, new cryptocurrencies are being created to become quantum-safe.
One of the most prominent projects is QRL, a blockchain system that is fully immune to quantum computing. It employs the eXtended Merkle Signature Scheme, a unique digital signature. Think of it as a one-time-use lock that quantum computers will have difficulty breaking. Since the XMSS signature is for one-time use, a fresh signature (lock) is generated for each transaction. This is so complex that not even quantum computers grasp it well.
How to Protect Your Crypto from Quantum Threats
Quantum computing is a scary thought, so what can you do as an individual to protect your crypto stash?
- Change blockchains: The best protection against quantum threats is to move to a quantum-resistant cryptocurrency as it becomes available. As the world moves closer to quantum technology, holding these cryptos ahead of a possible market trend could even be a strong investment strategy.
- Multisignature wallets: Multisignature wallets deliver an extra layer of security as they require multiple encrypted keys to be exposed to access your crypto.
- Cold storage: Employing best storage practices like cold storage helps to reduce vulnerabilities by keeping your crypto offline.
- Regular updates: Keep up with wallet firmware updates, which are regularly updated to improve security measures.
- Quantum-resistant wallets: Long-term quantum-resistant storage, such as Anchor Wallet, is already in development, which could stop people from using quantum computing for cryptocurrency hacking.
Future of Cryptocurrency in a Quantum World
The original cryptocurrency may be in danger if its encryption is not changed. For instance, there may be significant issues with combining quantum computing and cryptocurrencies like Bitcoin and Ethereum. The former two have over a trillion dollars’ worth of value at stake, and the latter two have raised concerns about the speed and security of quantum computing.
Quantum-resistant Blockchain Rushing
The precise impact of quantum computing on cryptocurrencies is unclear, but the dangers posed by quantum computing should not be disregarded. Quantum computing is currently in its early stages of research, with anticipated release dates ranging from 2030 to 2050. Therefore, the technology is still in its early stages, which gives crypto some breathing room to adjust and be safe.
Investment in quantum-resistant equipment and quantum computing for crypto research has undoubtedly grown, so the industry is not sleeping on this. However, this poses a risk to any cybersecurity system, including those used by governments and institutions that depend on more conventional forms of encryption.
