quantum

Quantum Computing Threat To Cryptocurrency

Can a quantum computer threaten the bitcoin network?

From the outside it looks like many other supercomputers: a shiny black container with white light picking out its name.  To George Rose, CTO and inventor of the D-Wave quantum computer, it’s far more than just another  number cruncher.

The D-Wave is the world’a first commercially available computer which harnesses the properties of the quantum world to crack large scale and very difficult maths problems. Before now these were the realm of massively parallel processing devices. By focusing of high speed data transfer with the computer and on the algorithms needed to break up these problems into small chunks, standard or near-standard processors could be brought to bear on the problems in vast numbers.  The worlds fastest computer, Tianhe–2, now has around 34000 processors, all working in parallel.

However, this can only scale by adding processors, a relatively expensive method that has limitations.

By contrast, quantum computers work on fundamentally different principles.  Again time is spent on writing an efficient algorithm, but this is applied to only a single processing array.  That array operates at near to absolute zero to enroll the counter intuitive properties of fundamental particles. In effect this allows the processor to try all possible answers in parallel, settling on the correct one in a highly efficient way.

Quantum Computing threat to Cryptocurrency

Following the 2013 funding round for D-Wave, Dr Rose put it like this.

“In less than a century, computers have completely transformed what humanity can envision and achieve. Quantum computers have the potential to again transform human capabilities. We’re not interested in incremental advances. We want to enable a future as different from today as today is from the turn of the 20th century.”

The D-Wave is at the vanguard of this new area. To be first the approach has been entirely practical; this is a device specifically designed for problems which involve getting closest or best fit answer to a complex question. It’s not a general purpose device, but early scepticism is being eroded by an impressive list of tech-savvy investors, including Jeff Bezos, founder of Amazon, and significant reference customers including the CIA, Google and Lockheed Martin.

The D-Wave is expensive - $15m each - and limited in what it can do. However, the interest in the technology is not limited to this device but for what quantum computing could do if a general purpose quantum gate, the basic unit of all processing, could be produced. At that point many things must change.

One of the first areas that would be revolutionised would be cryptography, and with it cryptocurrencies like Bitcoin, cryptoassets and any of the distributed processing tasks which rely on strong encryption.

The algorithm used by most cryptocurrencies is a maths problem based on the properties of certain types of curves. These maths problems are easy to set, but difficult to crack. To do so requires long periods of time or vast numbers of processors. Moreover, as processing power increases they can easily be made more difficult by using longer ‘keys’, strings of numbers used as inputs. This makes them ideal for cryptography where the key size can be increased until the processing needed to crack them is entirely beyond reach.

However, elliptic curve cryptography is vulnerable to Shors algorithm, a quantum algorithm which if run on a quantum computer would be able to crack the code in short periods of time.

D-Wave cannot run Shors. The design is specific to a different type of problem. It is also not possible to re-purpose D-Wave; although using quantum effects it uses classical processors to guess answers which are then assessed by the quantum processor. It is not a general purpose quantum gate.

However, D-Wave is available commercially far earlier than expected. Quantum processors of any type are only a few years old, and for many years remained only a few QuBits in size. (A QuBits is the fundamental chunk of data in quantum computing.)

By contrast D-Wave has 512 QuBits. A general purpose quantum computer of around 1500 QuBits would be sufficient to run Shors algorithm.

If this were to be achieved it’s likely that Bitcoin would be abandoned. The first Shors capable device would quickly come to dominate all coin mining, making a 51% attack possible. As more came on they would quickly dominate, pushing all others out and potentially leading to an arms race with only a few major players involved. This trend is already being seen in classical mining.

All sides know this. Although quantum computers are too specialised to replace a normal desktop, in applications such as cryptography it’s only matter of time. This is why both Intelligence agencies and cryptographers are spending considerable time now both to hasten that outcome and prepare for it.

For cryptocurrency the most likely response would be the deployment of encryption methods that are not susceptible to a Shor’s attack. Although this may be possible to implement in an existing cryptocurrency like Bitcoin it would more likely need the old block chain to be abandoned in favour of an entirely fresh one.

Moreover not all cryptocoins are susceptible to mining centralisation. There are already alterations to the basic decentralised bitcoin scheme which makes it impossible. These then would be the crypto coins to survive.

So quantum computing is a threat to Bitcoin, but not to the concept of decentralised cryptocurrencies.  A move to a new dominant cryptocoin would be difficult to complete rapidly without what amounted to a massive overnight currency crash. However, the market would quickly right itself. There would be winners and losers in such a flight, but the concept of decentralised cryptocurrencies would survive.