Quantum computers - influence on Bitcoin and other cryptocurrencies
What are quantum computers? How will they influence Bitcoin and other cryptocurrencies? Will they change the world as we know it? You can find all the answers below.
Quantum computing is a topic that raises eyebrows for decades. From the early 80's of the last century, when the first theoretical models were designed.
The largest companies of the world, such as Google, IBM and Microsoft partnered with some of the most prestigious universities - MIT, Oxford, Harvard in order to research and build a quantum computer.
However, progress is slow and difficult. Even a small progress requires enormous investments. Recently Google stirred up quantum waters by publishing that their new quantum computer resolved a problem in record time.
A specific calculation, which the most powerful classic computer of the world would need 10,000 years to solve, was solved by Google's computer in only 3 minutes.
The news published by Financial Times started numerous reactions. In this article we will explore details and potential influence of quantum computers on the world of cryptocurrencies.
What are quantum computers?
Quantum computing is based on quantum mechanics. The simplest way to explain quantum computers is to compare them to classic computers we use today. Classic computers save information in bits.
Each bit can be in the mode 0 or 1, - it can be turned on or off. All information is registered with a series of zeros or ones.
On the other hand, quantum computers store information in quantum bits (qubits), which can be in two modes at the same time. This state is called superposition and it enables exponential scaling, in other words it resolves problems more efficiently.
For example, it would take several million years for the strongest computer of the world to crack a strong password; a strong enough quantum computer would resolve it within a few minutes.
The more qubits the quantum computer has, the stronger it is. Let’s point out that this explanation is oversimplified in order to illustrate a comparison.
Current status of quantum computers
Google and IBM are the leading companies in quantum computing. In 2016 the public acquired access to IBM's quantum computers with 5 and 16 qubits. One year later, computers were upgraded to 20 qubits. Currently they are working on a computer with 53 qubits, and soon it will become available for testing. Google computer, which is the main topic of this article, also has 53 qubits.
Considering the fact that quantum technology is in its early stages, there are many technical problems which need to be resolved. One of the biggest problems of quantum computers is cooling, demanded by each qubit.
It requires cooling to 0.015 K, i.e. close to absolute zero - temperature cooler than deep space. Then, there is a large problem in the percentage of errors which quantum computers make while processing information.
Increasing the number of qubits is necessary for increasing the power of quantum computers. The problem is that increased number of qubits is proportional to the increased number of errors in processing information.
Influence on Bitcoin and other cryptocurrencies
A strong quantum computer would be able to crack Bitcoin and all other cryptocurrencies that use cryptographic algorithms. Cryptic algorithms are non-resistant to quantum computer attacks. This leads to a lot of discussions among the members of the crypto community.
Quantum computers could derivate the private key from a public key. That would make all crypto wallets insecure and for example, the owner of a powerful quantum computer could theoretically get easy access to all wallets.
Quantum computers in theory represent a great threat to all of the most popular cryptographic systems used today.
What does it take to protect Bitcoin?
Bitcoin is a decentralised cryptocurrency, known for its great resistance to changes. That same resistance and safety could also be a two-way street. The good thing is that there isn't central institution which can stop Bitcoin network.
However, the same principle makes harder to make necessary changes, for example to improve security of the network.
Centralised systems have a small advantage because they are agile, and changes are relatively simply implemented.
How can Bitcoin improve the security features?
There could be 2 options.
The first and ideal option is to transfer Bitcoin by hard-forking to a cryptographic system which is resistant to quantum attacks before these attacks even become possible.
However, it will be hard to make this kind of change due to a large dose of scepticism which Bitcoin users have towards quantum technology and earlier mentioned resistance to changes which adorn Bitcoin.
The other and more probable course is to wait for the first quantum attack for which no one can tell when will it take place. After the attack it will be necessary to make a copy of Bitcoin blockchain prior to the attack and implement a new cryptographic system through hard-forking. This way has several disadvantages and problems.
It will be hard to determine the exact time of attack, depending on the type and method of performance. It is most probable that some users will lose their Bitcoins. Damages occurred due to the attack will determine the further course of events.
There is a small probability that the damages will be irreparable, and that some other alternative cryptocurrency takes precedence. You can find more details on them below.
Alternative cryptocurrencies
There are several alternative cryptocurrencies based on cryptography resistant to quantum computers attacks.
Chances for attacks to happen are small, so it is more appropriate to look at these cryptocurrencies possible Bitcoin replacements.
In case of unexpected attacks in the future, cryptocurrencies we mentioned below are ready to take over and continue where Bitcoin left off.
Iota (IOTA)
Iota is the most popular alternative cryptocurrency on this list. It is based on DAG technology which competes with blockchain and uses cryptography resistant to quantum computers’ attacks. If the development continues and technology perfects itself, Iota is one of the more probable Bitcoin alternatives in the post-quantum world. We have already written on Iota, so visit this blog post for more information.
Quantum Resistant Ledger (QRL)
Quantum Resistant Ledger is a competition to Ethereum. It uses one of the most advanced cryptographies, which is considered to be totally resistant to quantum computers’ attacks. QRL algorithms have been checked by several independent agencies, specialised for security. Mainnet was initiated in the mid-2018. You can find additional information on their official pages.
Mochimo (MCM)
Mochimo is a relatively unknown cryptocurrency, not many people heard of it. The first block saw the light of day in the middle of last year. It's interesting because all of its parts are made from nothing.
It was conceived as a direct competition to Bitcoin in the post-quantum world. It is based on cryptography which is resistant to quantum attacks.
Considering the fact that it is new and that its other features are on a more modern level compared to Bitcoin technology, the network can take a significantly larger amount of transactions, mining algorithm is resistant to ASIC miners, etc. You can read more information here.