Quantum Computing's Threat to Cryptocurrency: An Analytical Overview

Quantum Computing and Cryptocurrency: An Impending Threat or Distant Danger?

Recently, the threat of quantum computing to cryptocurrencies has resurfaced as a focal point of discussion, spurred by remarks from prominent figures in both the quantum computing field and the cryptocurrency industry. These statements have ignited debate regarding the projected timeline for the development of quantum computers capable of cracking current encryption algorithms and the implications for cryptocurrency security.

Expert Predictions: A Closer Look

On November 13th, Scott Aaronson, Director of the Quantum Information Center at the University of Texas, mentioned in an article that it is possible we will see a fault-tolerant quantum computer capable of running Shor's algorithm before the next US presidential election. Following this, on November 19th, Vitalik Buterin, co-founder of Ethereum, stated at the Devconnect conference in Buenos Aires that Elliptic Curve Cryptography (ECC) could be cracked by quantum computing before the 2028 US presidential election, urging Ethereum to upgrade to a quantum-resistant algorithm within four years.

What is the Quantum Threat?

Simply put, the quantum threat refers to the potential of future, sufficiently powerful quantum computers to break the cryptographic foundations that keep cryptocurrencies secure today. Almost all cryptocurrencies, such as Bitcoin and Ethereum, rely on a technology called 'asymmetric encryption,' which depends on two key components: the private key and the public key.

• Private Key: Kept secret by the user, it is used to sign transactions, proving ownership of the asset.
• Public Key: Generated from the private key and can be made public, serving as a wallet address or part of the address.

The cornerstone of cryptocurrency security lies in the fact that deriving the private key from the public key is currently computationally infeasible. However, quantum computing, by leveraging principles of quantum mechanics, can significantly speed up the process of solving certain mathematical problems through the execution of specific algorithms (such as the aforementioned Shor's algorithm). This is precisely where the vulnerability of asymmetric encryption lies.

Shor's Algorithm: A Simplified Explanation

The essence of Shor's algorithm is that it transforms a mathematical problem that is 'nearly unsolvable' on a classical computer into a 'relatively easy-to-solve' period-finding problem on a quantum computer, thereby threatening the existing 'private key - public key' encryption system of cryptocurrencies. To illustrate with an example, imagine you have a basket of strawberries (analogous to the private key) that you can easily turn into strawberry jam (analogous to the public key). Clearly, you cannot reverse the process of turning jam back into strawberries. But suddenly, someone with a superpower (analogous to quantum computing) arrives and can achieve this in a convenient way (analogous to Shor's algorithm).

Is Quantum Computing Threatening the Future of Cryptocurrencies?

While the quantum threat is real, it is not imminent. There are two main reasons for this: first, there is still time before a real threat emerges; and second, cryptocurrencies can upgrade to implement quantum-resistant algorithms.

Even if Scott Aaronson's prediction comes true before the 2028 election, it does not mean that the security of cryptocurrencies will be truly threatened. Vitalik Buterin also did not say that the foundation of Bitcoin and Ethereum will be shaken, but only pointed out a long-term theoretical risk. Haseeb, Managing Partner at Dragonfly, explained that there is no need to panic about the new timeline of quantum computing, and that running Shor's algorithm does not equate to cracking a real 256-bit Elliptic Curve Key (ECC key). You can use Shor's algorithm to crack a single number, which is impressive enough, but to factor a number with hundreds of digits requires a much larger computational scale and engineering capability... This matter is worth taking seriously, but it is not imminent.

Cryptocurrency security expert MASTR provided a clearer mathematical answer, stating that breaking the Elliptic Curve Signature Algorithm (ECDSA) currently used by cryptocurrencies such as Bitcoin and Ethereum requires approximately 2300 logical qubits, 10¹² to 10¹³ quantum operations. After error correction, this would require hundreds of millions to billions of noisy qubits, an extremely high error rate, and a very short coherence time - still at least four orders of magnitude away from the requirements for cracking.

As for the second point, cryptography experts in the industry are also developing new post-quantum cryptography (PQC) algorithms that can resist quantum computing attacks, and all major blockchains have prepared for this. As early as March of last year, Vitalik wrote an article entitled 'What if a Quantum Attack Comes Tomorrow, How Will Ethereum Solve the Problem?', which mentioned Winternitz signatures and STARKs and their effect on resisting quantum threats, and also envisioned how Ethereum could urgently upgrade in emergencies. Compared to Ethereum, Bitcoin may not be so flexible in implementing upgrades, but the community has already proposed several potential algorithm upgrades such as Dilithium, Falcon, and SPHINCS+. Recently, with the escalation of related discussions, Adam Back, a Bitcoin OG, also mentioned that encryption standards in the post-quantum era could be implemented long before a substantial quantum computing threat emerges.

Conclusion

In summary, the quantum threat is like a master key hanging in the distance, which theoretically can unlock all current encrypted locks of blockchains. However, the people who make the locks have already started researching new locks that cannot be opened by this master key, and are preparing to replace all doors with new locks before the master key is made. This is the current objective reality of the quantum threat. We cannot ignore its progress, but we do not need to panic blindly because of it.