Quantum Computers and Cryptocurrency

/Quantum Computers and Cryptocurrency

Quantum Computers and Cryptocurrency 2018-04-09T09:53:45+00:00

Quantum Computers And Crypto

Quick inner navigation:

  1. What is Quantum Computing?
  2. How do quantum computers work?
  3. Why are Quantum computers Unique?
  4. Quantum Computers and the Impact on Encryption
  5. Effects of quantum computers on the blockchain and the crypto world
  6. Quantum Computer and Mining
  7. Quantum Computers Resistant Cryptocurrencies

We’ve all heard and probably used the widely known classical digital computers that encode data into binary digits known as bits, which could exist in just two states of 0 or 1 and functions with the aid of transistors; Quantum computing takes a different approach: The use of qubits or quantum bits.

What is Quantum Computing?

Quantum computers saw the lag of the inability of sub-atomic particles existing in more than one state and then capitalized on it. They are said to exist in a super-positioned state; unlike bit, more information other than 0 or 1 can be stored. Operations carried out here will require less energy, take lesser time and stores much more information than that in classical computers.

Quantum bits can be likened to an imaginary sphere. It could be located at any point on the sphere. In our world today, there is a great thirst for computing capacity as well as speed, despite efforts from computer manufacturers generating huge amounts of processing power. The question now arises, whether our needs for large amounts of computing power will ever be met.

Taking a Look at Moore’s law, which tells that with the doubling of a number of transistors on each microprocessor every 18 months, we could assume that by the year 2030, an atomic scale measurement will be the best fit for circuits found on a microprocessor. Then, it will be necessary to control and make use of atomic and molecular power to perform both processing and memory tasks: Hence, the need for the creation of quantum computers.

Certain basic quantum computers have already been developed by scientists, which could perform certain calculations, but the realization of a practical quantum computer is still far from being achieved.

How do quantum computers work?

The effectiveness of quantum computers is based on two core concepts of quantum mechanics: Superposition and Entanglement;

  • Superposition

In quantum computing, a bit is equivalent to the qubit. Rather than the regular computer that utilizes bits of data, Scientists makes use of quantum objects, i.e. photons, molecules, electrons or could be small electronic circuits showing quantum effects.

In Superposition, particles tend to show that they could exist in multiple states at the same time. This implies that qubits behave as it exists in 0 and 1 at once. This shows the importance and relevance of the wave-particle duality, which explains the behavior of quantum objects similar to that of waves.

Taking a closer look at how superposition has helped quantum computers, we can see that unique moves are utilized in the processing of information. The same way water waves interfere in order to create new waves, Superposition imbibes this wave property into quantum computers.

In processing a particular calculation, quantum computers require a simultaneous investigation into certain paths, which is also made possible by superposition. This way, information is processed in such a manner that paths leading to wrong answers are never measured because they are made to interfere destructively; while paths leading to right answers are made to constructively interfere, thereby making quantum computers calculate only right answers.

  • Entanglement

Quantum Entanglement, on the other hand, is a unique type of superposition that exists between two or more qubits. It can also be described as a physical phenomenon that takes place when pairs of particles interact in such a way that, you can’t describe the quantum state of a particular particle independently of others even when there is a large distance between the particles.

For example, you need to read a 50-page book, reading 10 pages of this book means you’ll have an idea of 20 percent of its contents. Reading another 10 pages means another 20 percent of the book has been learned. This is completely different when dealing with a quantum book. Reading 10 pages of a 50-page book at a time, nothing or little will be learned. This is because, the information is stored in the correlations and not written on the pages, therefore finding a way to read them all at once is necessary.

Why are Quantum computers Unique?

Quantum computers are unique because the principles on which they operate are different from that of other computers which gives them the upper hand when solving some complex mathematical problems, i.e. locating very large prime numbers. Prime numbers are vital when it comes to cryptography; this makes it possible for quantum computers to crack systems that securely keep our online information quickly. To solve this problem, researchers are putting all their efforts into developing a resistant technology against quantum hacking.

Researchers have also seen the relevance of the quantum computers in modeling complex chemical reactions. In July 2016, a hydrogen molecule was successfully simulated by Google engineers for the first time using a quantum device, and ever since, IBM has modeled the behavior of more complex molecules. Researchers hope that by utilizing quantum simulations, they can achieve the same feat in designing new molecules to be used in medicine.

Quantum Computers and the Impact on Encryption

Encryption entails the developing of two mathematical and related keys, of which one will be confidential to its owners and the other made available to the public. Anyone could encrypt the message with the aid of the public key, but only the person that possesses the private key can decrypt it. Supercomputers of today, no matter how powerful cannot use the public key to draw a logical conclusion on the private key. However, a quantum computer with the aid of its quantum supremacy sees it as a very easy task as it could break such encryption by splitting whatever mathematical problem was used in calculating the keys.

With quantum supremacy, security breaches will not only affect a proportion of people but everyone. But stay calm, it is not all self-destructive.

It’s been said that quantum computers are still yet to be, but when it becomes available, millions of dollars could cost you in acquiring a 50 plus qubit machine and the very powerful ones would have an inaccessible price range, thereby limiting its purchase by criminals. In fact, it could take up to 20 to 30 years before you could acquire one. However, forward-minded criminals are carrying out special schemes which involve, gathering of encrypted data and hoarding it patiently waiting for a time when they can afford quantum computers. At this time, they’ll easily decrypt data containing vital information, i.e. government secrets, social security numbers, etc. However, some experts believe that whatever information these criminals must have kept, they’ll become obsolete, by the time prices of quantum computers are affordable.

Effects of quantum computers on the blockchain and the crypto world

The major focus when considering threats to cryptocurrencies is increased regulation, and in the medium term, there may be greater regulation involved in cryptocurrency. Blockchain’s attractive nature comes from its security. No user can just break in to change the ledger, and it makes the distribution of transactions between networks of computers possible. Combining the blockchain technology with that of quantum computing will seemingly threaten blockchain’s rigid ledgers. A common topic for debate here is Cryptography because threats are posed by quantum computers on traditional forms of security, most importantly cryptography involving public keys which is the backbone of the current blockchain technology as well as most communications made online.

First, we need to know how computer security works

Public key cryptography encrypts information via a pair of keys. Public keys are shared widely while private keys are only known to the key’s owner. The security of a system is seen in its difficulty determining private keys from its public keys.

The link of public and private keys with the aid of factors of a particular number, which is determined by the product of two large prime numbers, will yield the most effective public key cryptography. Determining a private key from the public key would entail an evaluation of factors of this product of prime numbers. If a trillion keys are tested per second by a classical computer, it will take about 785 million times longer than the universe 14 billion years of existence, due to the size of prime numbers involved.

If there is a great increase in processing power, then there is a possibility that such an entity possess enough computing power to produce a private key from its own public key. If actors succeed in achieving this, then the strongest forms of public keys would be open to attacks.

Here, quantum computing takes its place, taking advantage of its superposition ability which limits the classical computers. Ability to compute with qubits makes quantum computers faster than the classical computers.  Furthermore, there are few algorithms for quantum computers; for example, Shor’s algorithm which helps to factor large primes quickly. Therefore, in theory, quantum computers have the ability to break the public key cryptography of today, and this is where the blockchain technology rests, Even Bitcoin, would be easily hacked.

The more the Increase in the power of quantum computers, the greater threat they are in breaking Blockchain’s encryption, which makes them a threat to cryptocurrencies.

Bitcoin’s proof of work has been found to be resistant to quantum computers speedup because Bitcoin possesses special ASIC miners that are very fast compared to that of quantum computers. However, Bitcoin’s elliptic curve signature is at more risk which could easily be broken by quantum computers.

Quantum Computer and Mining

The amount of energy consumed in the process of mining Bitcoin and its negative effects on the environment has been a major concern. It’s a fact that electricity has been the major cost when mining Bitcoin. Advanced research in quantum computing has raised hopes on reduced energy costs and consumption. Quantum computers have an unusual phenomenon such as Superposition and Entanglement. These properties make quantum computing safer, makes possible the instant execution of transactions, solve complex problems and most importantly, helps in the reduction in energy consumption.

The Anderson Institute has also explained Quantum Tunnelling: A wave effect involved in quantum mechanics. The combined effect of an accurate tunneling barrier and wavelength makes the passing of signals much faster and backward in time.

Google has also made progress in its aim to build a multipurpose quantum computer. MIT Technology Review has also backed Google, making it known that at the close of next year, they may be successful in unveiling a powerful quantum computer.

This has shown that Quantum computing will soon be realized, which could help in the reduction of Bitcoin’s energy consumption which will be of advantage to the people, and in turn, there will be a change in the economics of mining, leading to draw-in of individuals with interest in mining.

On the other hand, Quantum computers can perform large amounts of calculations within a short time and so, this will lead to an insecure environment for cryptocurrency because quantum computers can engineer keys from public ones. The encryption keys validating the data blocks can easily be broken.

Mining has the tasks of providing clear evidence of transactions, provision of safety to networks, and so, making use of devices with a high processing capacity could lead to failures in information reliability.

Also, Cryptocurrencies makes use of cryptography, difficult for today’s computers but less important to quantum computers. And so, complex problems for new processors will need to be created by Encryption.

Though the crypto used in mining is safe, the public-private keys will need replacement, assuming the multipurpose quantum computer is invented.

Due to quantum computer’s ability to entangle and superpose, and carrying out of factor-type algorithms, it has a much more superior technology compared to the current. Mining might scale through if we make use of different quantum-proof algorithms but most of today’s encryption algorithms will be broken.

Quantum Computers Resistant Cryptocurrencies

Quantum computers are known to threaten blockchain as well as other cryptocurrencies such as Bitcoin, but some cryptocurrencies have recognized this problem and are putting in all efforts to combat the possible threats of quantum computers in the future. It’s a kind of technological evolution, in which cryptocurrencies develop resistant and preventive measures against quantum computers. Some of these cryptocurrencies are:

qBitcoin

This can be referred to as Bitcoin’s upgraded version. Here, protocols used in quantum cryptography, i.e. BB84 Quantum key distribution scheme, can be used to make a transfer of qBitcoins.

But the irony here is that the same technology it uses to cause problems for the blockchain security (qubit), is also used to provide a protective system for blockchain. Unfortunately, there are some problems in achieving this. It requires an installation of a quantum distribution network to make a transfer of these qubits, which isn’t feasible due to the high costs requirements for construction. In the future, hopefully, it might be affordable.

IOTA

IOTA makes use of Lamport Signatures or Winternitz OTS to protect its signatures from quantum effects. But has one major limitation- Each address can be used only once.

As more users come into play, Tangle, IOTA’S Primary protocol works actively to speed up the network. IOTA’s acyclic graph is a new and significant development in the cryptocurrency technology; which makes it compulsory for the sender to confirm two other transactions on this network.

Ethereum

Sometime last year, the team of Ethereum made it clear that they would allow users choose quantum computer addresses that are safe. It will support custom cryptography and signature mixers which will enable users to upgrade to signatures such as Lamport hash ladder, ed22519 or whatever signatures they desire.

Quantum Resistant Ledger

This method was developed and proposed by Dr. Peter Waterland. He based his idea on post-quantum cryptography which aims at executing into transactions, new digital signatures, which gives the ledger the resistance against quantum computation.

In contrast to qBitcoin, it doesn’t operate based on expensive infrastructure and also can function on devices with low power, i.e. Raspberry Pi’s and laptops.

This ledger also plans to use a technique known as lattice-based cryptography, in which signed transactions with a unique public key are utilized to channel safe communications medium in which messages are sent.

Other plans include the linking of blockchain IDs to secure quantum addresses known as XMSS transactions.

The Conclusion

It’s no news that quantum computers could spell doom for cryptocurrencies, but measures are being taken to curb this threat. There could be an advantage if both technologies do well by competing side by side. The impending arrival of quantum computers has forced cryptocurrency experts and encryption to prepare adequately for it, which has improved both in their chances of survival and in its features.

There’s no cause for alarm because even if quantum computing wins, there are promising efforts put forth by cryptocurrency experts. And so, it is likely that these measures against quantum computing will soon be invented.

Thanks for taking out time to read this article; I believe this has created a platform to know more about Quantum computers and its effects on the crypto world. You can always check our site for more insightful crypto-related coverages.

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