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Will Quantum Computing Break Blockchains or Make It More Secure?

When it comes to the future of computing, blockchain and quantum computing are two of the most fascinating and controversial industries. While blockchain is far more advanced in its practical applications -- including the creation of cryptocurrencies and cryptography that can be used by individuals and businesses alike -- the quantum computing industry is also growing at breakneck speed. In fact, the industry growth rate of quantum computing may be second only to blockchain, and the industry is expected to grow at a rate of 25% per year from 2022 to 2027.

Some experts believe that advances in quantum computing could be the beginning of the end for blockchains; as quantum computers can break the encryption of even the most advanced blockchains. Alternatively, quantum computers could in some ways replace blockchains as a more advanced way to future-proof data.

However, the relationship between quantum computing and blockchain need not be adversarial; some researchers believe that quantum computing and blockchain technology will eventually converge. This could create safer, faster and potentially revolutionary computing solutions that could ultimately help solve a variety of cryptographic and real-world problems.

Table of contents

• Table of contents

• What is quantum computing - and how is it different from blockchain?

• Will quantum computing disrupt blockchains and end cryptocurrencies?

• Can quantum computing be integrated or enhanced with future blockchains?

• What is a Quantum Resistant Ledger?

• What is Bitcoin post-quantum?

What is the future of quantum computing and blockchain?

What is quantum computing - and how is it different from blockchain?

For those who may not be familiar, quantum computing is a unique type of computing that uses "quantum states" to solve logic problems that either require incredible processing power or are nearly impossible to solve with ordinary supercomputers question. Instead of analyzing a set of questions one by one like a traditional supercomputer, a quantum computer can analyze a large number of potential questions and answers simultaneously. These computers harness the power of quantum physics to minimize the number of potentially wrong answers with incredible speed, while honing in on potentially correct answers with incredible speed.

Current computers, often called classical computers, consist of bits that are either 1 or 0, but not both. Quantum computers are not made of bits, but qubits, which allow those bits to exist in two states at the same time, thanks to a concept called quantum superposition. Also, unlike conventional bits, qubits can influence each other in a process called quantum entanglement, creating one large quantum state for the entire computing system. Each additional qubit doubles the number of potential states for a computer, and these computers have enormous computational power compared to classical computers.

In addition to solving highly complex problems, quantum computing has the incredible potential to change the world of encryption. Due to the nature of quantum physics and quantum states, the state of specific information actually changes when it is observed. In theory, therefore, quantum encryption could be truly unbreakable, since the state of any information would be irreversibly changed if viewed by anyone (or any machine) other than the intended party. However, just as quantum computing can create strong encryption, it also has the potential to break previously unbreakable forms of encryption, making it potentially at odds with the entire purpose of blockchain.

Companies like IBM are currently using quantum computers to solve a variety of problems, such as developing higher energy-dense batteries for electric vehicles, developing new materials that can reduce carbon emissions, and even finding particles that could reveal the origin of the universe.

In contrast to quantum computing, blockchain can be described as a set of distributed ledger technologies that use cryptography to create a ledger of information that cannot be effectively changed once verified by a series of distributed computers, called nodes. Using various consensus mechanisms, a distributed network of nodes agrees or disagrees to "validate" a block of information, adding it to the blockchain. Blockchains are squarely in the realm of classical computing, which means that blockchains will only be in a single state at some point in time.

As the industry has demonstrated, blockchain technology is an excellent tool for creating distributed applications through self-executing smart contracts, including digital currencies, logistics and record-keeping protocols, and various financial products. These include lending, staking, liquidity mining, and even distributed insurance protocols.

However, due to the limitations of the network, blockchains are not necessarily good at solving problems that require high levels of computational problem-solving capabilities. In fact, slow transaction speeds are one of the biggest problems in blockchains today, with newer blockchains racing to provide solutions that can run at higher transactions per second (TPS). Quantum computing, by contrast, has great potential for solving some of the big, intractable problems that exist in science and technology, but it's not necessarily a good tool for creating consumer applications that ordinary people use.

So it's safe to say that quantum computing is two highly different technologies, but their interplay could change both industries forever.

Will quantum computing disrupt blockchains and end cryptocurrencies?

When it comes to quantum computing and blockchains, the main concern is that quantum computers could overwhelm blockchain encryption — leading to the end of secure cryptocurrencies as we know them. If quantum cryptography can overwhelm blockchain cryptography, it could lead to massive cryptocurrency theft and major disruption, even if the entire crypto industry doesn't collapse.

According to a study by Deloitte, an attack could steal 25% of all Bitcoins. This will reach about $300 billion by January 2022, and as the size of the cryptocurrency market continues to grow dramatically, quantum computer-based cryptographic hackers could eventually steal trillions of dollars, potentially throwing the global economy into turmoil and, in the process, destroy the entire blockchain.

Specifically, a well-known theoretical computer algorithm called the Shor's function, when implemented by a quantum computer, could theoretically resolve prime factors currently hidden by elliptic curve multiplication. This is a form of multiplication used for hashing, and it is (currently) almost impossible to reverse (i.e. discover the original numbers that were multiplied together to form the private key).

For example, the researchers calculated that a classical computer would require 340,282,366,920,938,463,463,374,607,431,768,211,456 elementary operations to determine the private key associated with the public key using elliptic curve multiplication. In theory, this could take thousands of years.

In contrast, a quantum computer using Shor's function would only need 2,097,152 elementary operations to determine the private key associated with the public key, based on the same calculations. In contrast, this may only take a few hours. However, it's important to realize that the ability to exploit Shor's functions has not yet been developed in mainstream quantum computers, and it's unclear when this capability will be fully developed.

In addition to breaking blockchain encryption, another concern is that quantum computers could replace traditional computers for cryptocurrency mining. As the theory goes, if these computers were able to mine faster than traditional mining equipment such as ASICs, it could lead to asset price instability, 51% attacks and extreme centralization of mining power. However, it should be noted that this is primarily a concern for proof-of-work blockchains such as Bitcoin, and generally does not affect proof-of-stake based consensus models. Due to environmental concerns and other factors, most proof-of-work blockchains, such as Ethereum, are moving to proof-of-stake and other consensus models that do not involve computationally intensive mining.

Despite these calculations and estimates, not all experts are convinced that quantum computing will be able to effectively crack blockchains and render traditional cryptography obsolete. For example, some believe that the SHA-256 encryption used in Bitcoin may be quantum resistant. Even if quantum computers were able to break current blockchain encryption methods, it could take 10 to 20 years, giving blockchain cryptographers a head start in developing new, stronger encryption methods.

Additionally, RSA encryption, the most common alternative to elliptic curve cryptography, may also be somewhat quantum resistant. While elliptic curve encryption is considered more secure than RSA encryption when it comes to conventional decryption, experts suggest the opposite may be true when it comes to quantum decryption. Furthermore, even if RSA ends up being "quantum hackable," soft forks and constantly changing wallet addresses may be able to mitigate much of the practical ability of quantum computers to disrupt blockchains or steal cryptocurrencies.

Can quantum computing be integrated or enhanced with future blockchains?

While some believe quantum computing could disrupt blockchains and cryptocurrencies as we know them, others believe quantum cryptography could be combined with blockchains to create blockchains that are more secure than today's protocols. In theory, these blockchains would be highly resistant to conventional hacking and quantum computer attacks.

Specifically, experts believe traditional blockchain cryptography methods, such as asymmetric key algorithms and hash functions utilizing the aforementioned elliptic curve multiplication, could be replaced with quantum keys.

Quantum key cryptography, also known as quantum key distribution (QKD), works by sending "quantum particles" of light in the form of photons over optical links. As we mentioned earlier, any attempt by an eavesdropper to view the photon being transmitted would effectively devalidate the transaction.

To be practical, these quantum keys need to be used with one-time password (OTP) encryption, which generates keys that can only be used once.

Quantum computing is detailed in a fascinating paper titled "Quantum Blockchain: A Decentralized, Encrypted, and Distributed Database Based on Quantum Mechanics" by Chuntang Li, Yinsong Xu, Jiahao Tang, and Wenjie Liu in the Journal of Quantum Computing Applications in future blockchains provide other benefits; in particular randomization of node selection, currently a major problem with blockchains. Instead of utilizing current randomization methods, quantum blockchain protocols could utilize quantum random number generators to select randomly selected validator nodes.

The paper argues that quantum blockchains also have the potential to replace the classical Byzantine agreement protocol with a new type of quantum Byzantine agreement protocol that would employ quantum encryption. While highly theoretical at this point, this could both help prevent 51% attacks and create new, highly secure cryptocurrencies based on quantum cryptography.

While much of the above refers to the creation of new quantum blockchains, it is also possible that quantum technology can be applied to existing blockchains, which can both increase decentralization and reduce the complexity of major blockchains such as Bitcoin, Ethereum, and Solana. Blockchain transaction times.

An underlying issue that is vague and not addressed in the reference paper is how quantum computing functions, including quantum key generation, would be distributed through node operators. Currently, most quantum computers are highly experimental and extremely expensive, which means that it is difficult to implement the large number of node operators required for a truly decentralized blockchain. That could change, however; a company in China has unveiled a tiny quantum computer that costs just $5,000, far less than what it currently costs to run a full ethereum node.

What is a Quantum Resistant Ledger?

So far, there are only two public blockchain projects claiming to be fully quantum-resistant, the Quantum-Resistant Ledger and Bitcoin Post-Quantum. Quantum Resistant Ledger (QRL) bills itself as a "post-quantum secure blockchain with a stateful signature scheme and unparalleled security".

To this end, the QRL protocol uses "IETF-specified XMSS, a hash-based forward-secure signature scheme with a minimum of security assumptions." XMSS is an extended Merkle signature scheme utilizing Merkle trees. These are trees where each node is tagged with a cryptographic hash of a block of data.

A Merkle tree can be defined as "the complete hash of all hashes of all transactions in a single block in an existing blockchain network".

State-based hash signature schemes such as Merkle signatures are considered more resistant to quantum hacking than RSA or elliptic curve cryptography. However, hash-state based signature schemes such as XMSS can be vulnerable if the key is used multiple times, which does put them at a disadvantage relative to other forms of cryptography.

Currently, the National Institute of Information Technology (NIST) Computer Security Resource Center is actively soliciting research and reviews of these encryption techniques to assess their potential strengths and weaknesses for civilian and government use. In addition to XMSS, NIST is currently evaluating nearly 70 new methods for "post-quantum cryptography."

Quantum Resistant Ledger claims that its "extended" Merkle signature scheme is more efficient and more secure than traditional Merkle signature schemes, although this is difficult to prove without a real efficient quantum computer to test it against.

In addition to developing a proprietary blockchain, the group has issued its own cryptocurrency (QRL), which as of January 2022 has a price of less than $0.20 and a total market capitalization of just over $14 million. Like the blockchain it's based on, QRL's creators claim that the cryptocurrency itself is the first currency to be completely immune to quantum hacking. Like other cryptocurrencies, QRL can be mined from a single node or as part of a participating mining pool.

What is Bitcoin post-quantum?

In addition to the somewhat popular QRL project, another blockchain project, Bitcoin Post-Quantum, also claims to use the hash-state-based Extended Merkle Signature Scheme (XMSS) to protect itself from quantum computing attacks. Specifically, BPQ is an experimental fork of Bitcoin's main blockchain that uses quantum-safe digital signatures instead of more traditional encryption techniques. Research conducted by BPQ may form the basis for introducing quantum-resistant cryptography to the Bitcoin mainnet in the coming years.

Unlike QRL, BPQ is currently more of a research phase, and its planned currency, BitcoinPQ, is not currently being mined.

What is the future of quantum computing and blockchain?

In contrast, quantum computing, still in its early stages, has the potential to help solve many of the most impactful scientific and technological problems of our time, advancing technology in ways we could not have foreseen. If quantum computing and blockchain collide, it could be an epic disaster. However, if cryptography continues to evolve to create more and more quantum-resistant encryption methods, or if quantum encryption itself is integrated into blockchains, the combination of these promising technologies will help create a more secure, more A democratized Internet, and more likely to have a positive impact on the world.

Related Reading:

• (2022) Forecast size of the quantum computing market worldwide in 2020 and 2027.

• What is quantum computing?.

• Quantum computing will break the blockchain and QKD will save it. Quantum Xchange

• Chaum, D. (2021, Nov.) Without quantum security, our blockchain future is uncertain.

• (2018, Jun.) Elliptic-Curve Cryptography.

• What is Quantum Cryptography (or Quantum Key Distribution)?. ID Quantique.

• Li, C. Xu, Y. Tang, J. Liu, W. (2019) Quantum Blockchain: A Decentralized, Encrypted and Distributed Database Based on Quantum Mechanics. Journal of Quantum Computing

• Tangermann, V. (2021, Feb.) This Quantum Desktop Computer Can Be Yours for $5000. The Byte.

• Quantum Resistant Ledger: The future of post-quantum resistant blockchains. The QRL Foundation.

• Huang, R. (2020, Dec.) Here’s Why Quantum Computing Will Not Break Cryptocurrencies.

• (2022, Jan.) Quantum Resistant Ledger.

• (2019, Feb.) Request for Public Comments on Stateful Hash-Based Signatures (HBS). NIST: Information Technology Laboratory: Computer Security Resource Center.