Cryptocurrencies have the potential to change finance, remove middlemen, and bring financial services to millions of unbanked people worldwide. However, the blockchain technology behind cryptocurrencies could be vulnerable if quantum computing evolves faster than efforts to hack-proof digital money.
Cryptocurrencies are secured by a technology called public key cryptography. The system is ubiquitous, protecting your online purchases and scrambling your communications for anyone other than the intended recipient. The technology works by combining a public key, one that anyone can see, with a private key that’s for the owner’s eyes only.
If current progress continues, quantum computers will be able to crack public key cryptography, potentially creating a serious threat to the crypto world. If encryption is broken, attackers can impersonate the legitimate owners of cryptocurrency, NFTs, or other such digital assets.
“Once quantum computing becomes powerful enough, then essentially all the security guarantees will go out of the window,” Dawn Song, a computer security entrepreneur, and professor at the University of California, Berkeley, told CNET. “When public key cryptography is broken, users could be losing their funds and the whole system will break.”
For now, quantum computers are manipulating data stored in tens of qubits, computing elements that are subject to quantum physics. To crack encryption, they will need to harness thousands of qubits, vastly more and persist much longer than today. However, computers makers are now working hard to fight those drawbacks.
“We expect that within a few years, sufficiently powerful computers will be available [for cracking blockchains open],” said Nir Minerbi, CEO of quantum software maker Classiq Technologies.
Several cryptocurrency and blockchain efforts are actively working on quantum-resistant software. Among them are the Ethereum project, behind the second-biggest cryptocurrency, Cambridge Quantum Computing, a startup merging with quantum computer maker Honeywell, as well as the Hyperledger Foundation, an open-source software project geared for business uses of blockchain.
However, a problem with the post-quantum cryptography algorithms under consideration so far is that they generally need longer numeric encryption keys and longer processing times, says Peter Chapman, CEO of quantum computer maker IonQ. That could substantially increase the amount of computing horsepower needed to handle blockchains.
Another risk is that blockchains rely on a digital fingerprinting technology called hashing that quantum computers could disrupt. The cryptocurrency wallets people use to keep track of their digital assets could also be vulnerable to quantum computing. These wallets store private keys people need to access their assets recorded on the blockchain. That’s likely to be fixable with more-modest technology updates, though.
“How do you force users to upgrade keys? That answer is not so straightforward and likely the most dangerous part,” said Joe Genereux, senior cryptography and security engineer at browser maker Brave, which uses its own Basic Attention Token (BAT) cryptocurrency for an ad system that pays users. “I think cryptocurrencies that have better governance or post-quantum designs baked in early can get around this issue better.”
Nevertheless, David Sacco, who teaches at the University of New Haven, says that cryptocurrency’s native development suggests people will update the digital asset technology to overcome quantum computing’s risks.
Needless to say, the quantum revolution will present a slew of changes in cybersecurity and crypto tools. Therefore, post-quantum technologies will play a crucial role in the future of data security and cryptocurrency trading.