From noticeable market shifts to regulatory uncertainties, bumper headlines about cryptocurrencies easily make people forget that despite the progress of blockchain technology and digital trade, numerous technical loopholes are still susceptible to exploitation by future technologies such as quantum computing.
While the quantum world won’t necessarily wipe out blockchains and cryptocurrencies completely, renowned experts and engineers are of the view that quantum computers will pose substantial security risks to cryptocurrencies as a whole.
To better absorb the gravity of the danger posed by quantum computing to cryptocurrencies, we need to understand that most of today’s world is glued to an algorithm that uses “keys” to access things like email, bank accounts, and crypto-wallets. Moreover, all financial institutions and electronic devices like smartphones are based on this method, and quantum hacking threatens to break it.
The Quantum Threat
While quantum computers are in very early stages right now, studies suggest that developments in quantum computing reportedly double every 18 months. Therefore, it is imperative that the blockchain and cryptocurrency community start preparing for a quantum-supremacy future.
Dreadfully though, quantum computing will impact how information is stored, warehoused, and manipulated. It will particularly affect technologies that depend on cryptographic digital signatures for data security, including cryptocurrencies.
Currently, classical computers don’t possess the computing power required to hack cryptocurrencies, let alone wallets. However, a few developments in the quantum computing space seem to hint that fundamental changes are needed to help maintain the security of crypto wallets in the very near future.
Measures to Address The Threat
Blockchain’s susceptibility to quantum computers comes from its extensive reliance on the fundamentals of cryptography.
While the threat looms large and uncertain, prominent experts spoke to an international daily with confidence that they aren’t worried about quantum hacking of Bitcoin wallets:
We would have plenty of forewarning if quantum computing was reaching the stage of maturity and sophistication at which it started to threaten our core cryptographic primitives, but it wouldn’t be something that happens overnight.
They explained that there’s a lot of work being done to devise a new and universal standard for encryption in the future that’s “quantum-proof”, and the blockchain space will be its major recipient.
The first standard quantum-safe algorithm for cryptocurrencies will be available for beta testing in the next three or four years — most likely by 2024 — which is well before the feared age of quantum computers hitting maturity. However, crypto traders will need to proactively embrace the new security protocols for securing their assets, something which analysts believe would be the biggest hurdle for the new system to actually work.
Crypto trends have been filled with examples of hardware and software changes that had to be made to make the crypto trade more secure and effective — and good security practices in the present (e.g. avoiding wallet re-use) can help prepare for a more uncertain future.
So, a little touch of quantum tech won’t suddenly render classical encryption useless or mining inconsequential. Rest assured, the security of bitcoin isn’t at risk right at this moment.
The real threat is when quantum computers become common enough to be considered a problem, by which point planning for post-quantum encryption would be too late.