Blockchain, is a growing list of records, called blocks, which are linked using cryptography. Blockchains which are readable by the public are widely used by cryptocurrencies. Private blockchains have been proposed for business use. Blockchain a transformative decentralized digital currency, a secure payment platform free from government interference, is being considered for security of additive manufacturing .
The technology has the potential to enhance privacy, security and freedom of conveyance of data. Blockchain is based on open, global infrastructure, decentralized public ledger of transactions that no one person or company owns or controls, ensures security of transfer of funds through public and private cryptology and third parties to verify that they shook, digitally, on an agreement.
Quantum Computer Threat
Quantum computers shall bring the power of massively parallel computing. They can process huge datasets in a fraction of a second that would have previously taken days and weeks. This speeds up Big Data analysis, searching very large, unstructured, unsorted data sets discovering patterns or anomalies extremely quickly.
Quantum Computer will also be a threat to our cyber security. Security of our critical infrastructure depends on cryptography that provides security services such as confidentiality, integrity, authentication, and non-repudiation. Cryptography involves encryption at the transmission, which converts ordinary text into secret text known as ciphertext using one key. At the receiver the opposite decryption is performed which converts ciphertext back to original text using another key. The public-key encryption system is based on two keys, public key used for encryption that is available to all. The second key is private key used for decryption by the receiver and is kept secret.
The security of public key cryptosystem depends on the difficulty of Integer factorization or decomposing a number into product of two prime numbers The security of these cryptographic algorithms is vulnerable to progress of computing technology, development of new mathematical algorithms, and progress in quantum computing technology. A quantum computer of sufficient size will be capable of executing Shor’s Algorithm, factorization of large prime numbers in hours or days compared to classical computer that would take billions of years of computing time to complete
Recently, news has broken out about Google reportedly hitting quantum supremacy. Most blockchains (including all in the top 5 on CMC) use Elliptic Curve Digital Signature Algorithm (ECDSA) for public key cryptography. Using a quantum computer, Shor’s algorithm can be used to break ECDSA. What this means is powerful enough quantum computers can derive the private key from the public key. So if an adversary gets your public key (and has access to a powerful enough quantum computer), then they can derive your private key, create a transaction, and empty your wallet. As of June of 2018, it’s been calculated that 36% of bitcoins reveal their public keys. Further complicating the above matter, anytime you make a transaction, your public key is revealed to the network.
Andersen Cheng, CEO of London-based cryptography company Post-Quantum, recently said that quantum computing technology could break crypto within three years. Using quantum computers, hackers could, Cheng told Decrypt, hijack a victim’s private keys and use them to fraudulently validate transactions. Since blockchains have no middle-man to determine which transactions were made fraudulently, the whole thing falls apart. “The entire digital currency world is based on trust and the security of private key signing. If that trust is gone, then the value of your Bitcoin will to zero, immediately,” Cheng said.
Cheng is quick to clarify that those who estimate the quantum threat to be decades away make their assumptions based on what is known of commercially available quantum computers, like Google’s recent announcement that it created a computer capable of computations faster than even the most powerful supercomputer, an event known as quantum supremacy.
Instead, Cheng speaks of the dangers posed by secret government projects, which can be purpose-built to solve a specific problem—like encryption—without concerns of commercial viability. “It can be the size of the football stadium, underground somewhere in the lab with all kinds of bandages around it. As long as it can start cracking encryption, who cares?
“Those guys never want to launch it. They will always want to keep quiet about it. Why would they tell the world that they got it working when they can start cracking the communications between the US and the UK, or the stock exchange trading information, or Bitcoin transfers,” he said. By the time the commercial world’s heard about it, it’s probably too late.
Impact
A quantum-enabled hack of Bitcoin’s underlying public key system (namely ECDSA breach by a QC Shor’s algorithm) would be catastrophic for the global financial system and the UDS GDP real economy. Few research shows predictions of this “greyrhino” event to materialize in this decade, scientific academic papers from 2024 to 2030. Losses in unrealized gains and original investment capital would total over $2 trillion, representing a loss of approximately 95% of the cryptocurrency market’s valuation.
These direct costs of a quantum-enabled hack of Bitcoin’s underlying system would also have significant secondary impacts on financial volatility, equity prices, and credit conditions throughout the US economy, leading to a decline in aggregate demand and corporate profits and an economy-wide contraction further recession. There is no path forward for BTC, other than tank and rebuild, like the US economy would act. There few cryptocurrencies use nowadays Post-Quantum encryption public key signatures, the most notable one is called The Quantum Resistant Ledger which uses a NIST approved eXtended Merkle Signature Scheme. Risk analyst, specially those who administer big pension funds exposed to cryptocurrency should start paying attention to the emerging QC threat.
Post Quantum Technologies
His company, Post-Quantum, has worked on top-secret counter-terrorism departments of organizations including Nato, GCHQ, and NCSC, and he’s the former head of TRL, which was the leading counter-terrorism technology supplier to the UK government.
Besides the development of quantum computers themselves, there is also advancment of quantum algorithms that are less sensitive to error rates. And existing algorithms are reinvented and/ or improved and new ways of deployment are discovered. For example this optimized version of Shor’s algorithm for prime factoring. That factors 2048 bit RSA integers in 8 hours using 20 million noisy qubits. The previous method was about 100 times slower. This shows the importance of these kinds of developments since these also advances a critical timeline.
In Oct 2017 paper, Researchers mostly from Singapore claimed that key protocols securing technology undergirding bitcoin are “susceptible to attack by the development of a sufficiently large quantum computer”, in their paper “Quantum attacks on Bitcoin, and how to protect against them (Quantum),” made available through the Cornell University Library.
Now researchers at the Victoria University of Wellington in New Zealand, have proposed to secure cryptocurrency futures for decades using a quantum blockchain technology. Therefore the solution to store a blockchain in a quantum era requires a quantum blockchain using a series of entangled photons. Further, Spectrum writes: “Essentially, current records in a quantum blockchain are not merely linked to a record of the past, but rather a record in the past, one that does not exist anymore.”
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