Imagine: It’s 2023, and a leading Chinese tech company has just created a quantum computer that can break the current Bitcoin encryption standard. Despite promises by the company to safeguard its innovative technology, a rogue employee uses it to open the wallets of several large bitcoin investors. The employee absconds with several million bitcoins, and as word leaks, the market crashes. Before Bitcoin can update its encryption standard, investor confidence in cryptocurrency has been shattered. This scenario is the threat that quantum computing presents.
The above scenario is not that far-fetched. Indeed, at the speed at which quantum qubit capacity is increasing (a qubit is a unit of quantum information), it’s merely a matter of time before quantum computing poses just such a risk. Hackers seeking to break Bitcoin’s private key verification scheme (its elliptic curve digital signature algorithm) will likely be able to do so at 1600 qubits capacity. At present, the best quantum computing efforts have reached 72 qubits.
Quantum Computing: A Systemic Risk
For security purposes, Bitcoin owners are currently able to generate both a private and a public key. Although private keys are used to generate public keys, it’s fairly difficult to calculate that private key based upon how the public key was generated. Quantum computers have that capacity to do just that. And as quantum computing power grows, its ability to wreak havoc on cryptocurrency will expand as well.
By having the capability to reveal private keys, quantum computing leaves open the possibility of theft. In particular, quantum computers can overcome what is known as the elliptic curve signature scheme, a technique designed to verify private key ownership. It’s been estimated that the elliptic curve signature scheme “could be completely broken by a quantum computer as early as 2027.” (MIT Technology Review)
Quantum Computing in 2019
In a recent article by Fortune, Vern Brownell, CEO of D-Wave (the “world’s first quantum computing company”), suggests that quantum computing developments will be implemented somewhat gradually:
Often, people learning about quantum computing will point to their smartphone and ask, “So when will this run on quantum?” The answer is: “Possibly sooner than you think.” But the quantum computer will not be in your handset. Instead of a replacement of our classical devices, the quantum future will be hybrid. QPUs
(quantum processors) and classical processors will work together to tackle day-to-day computing as well as complex, enterprise-level problems across industries. So even if smartphones won’t contain a quantum computer, they are likely to access quantum computers for certain applications via the cloud within the next few years.
Brownell argues that quantum computing’s immediate future appears limited to practical applications. He foresees it being implemented in industries “that are most ripe for quantum advantage, like material science, machine learning, and complex optimization problems.” Whether more this technology can easily translate to more nefarious purposes remains to be seen.
Adaptability and Trust As A Security Safeguard
“Quantum Resistant” technology does indeed exist. For instance, XTRABYTES™ currently uses a very secure hash algorithm standard (SHA-512) to safeguard its Zolt algorithm from quantum computing hackers. Its security protocols can also be upgraded as quantum computing advances. With encryption technology, security is often a matter of staying ahead of the curve.
Because blockchain security is partially dependent upon the length of cryptographic keys, creating longer keys as a safeguard is always a temptation. Unfortunately, longer cryptographic keys require additional time for encoding and decoding encryptions. Given that XTRABYTES is aiming for a superior transactions-per-second rate, it might have greater luxury than most with regard to encryption time. Nonetheless, other variables such as time-stamping and encryption methods must be factored in as well.
With its Proof-of-Signature requirement, XTRABYTES creates an additional security layer as well. Using Proof-of-Signature, transactions only proceed if XTRABYTES’ STATIC nodes sign off on them. Because it’s impossible for anyone to know the entire private key used by several thousand STATIC nodes, hackers cannot fraudulently create a signature-verified block. And should a malicious node attempt to compromise the chain, it will be blacklisted automatically.
Well, what about breaking into the STATIC node owner’s wallets? STATIC node owners locate one of their two wallets on their PC. Since this wallet has no coins in it, a hacker has no incentive to hack it. This is the advantage XTRABYTES has with locking its digital coins in cold storage.