What does quantum computing mean for Bitcoin?
There has been a bit of a media storm in recent days surrounding Google’s announcement of Willow, its new quantum computer, and a perceived threat to Bitcoin. The bulk of the analysis reveals a remarkably shallow understanding of how quantum computing will transform cryptography and how Bitcoin remains resilient to such technological advances. We will delve deeper into quantum computing and the threat it poses to Bitcoin. It will get technical at certain points, but this is necessary to scratch the surface and truly understand the state of affairs.
In short, quantum computing will certainly require a change to the Bitcoin protocol in the next few years, similar to the computer upgrades sparked by the year 2000. It will be an expensive and time-consuming affair, but not an existential threat to Bitcoin itself. And it won’t just be Bitcoin affected, because we’re actually talking about the ability of quantum computers to crack them everyone Type of cryptography we use today in finance, trading, banking and more.
It’s hard not to wonder if some of this alarm about Bitcoin’s demise is due to some sort of “sour grapes” dynamic. Critics who have long avoided Bitcoin – whether because they don’t believe it could ever work, they’re annoyed that it challenges government control, or they simply regret not investing , when it was cheaper – use Google’s quantum computing news to predict Bitcoin’s demise. These reactions often say more about the biases of skeptics than about the vulnerabilities of Bitcoin itself.
Not just a Bitcoin problem
Google’s Willow quantum computer can perform calculations using 105 qubits, and its results are considered relatively accurate (as of now). Although 105 qubits represents a major advance in computing power over previous quantum computers, breaking Bitcoin’s encryption would require 200 to 400 million qubits. To achieve this capability within 10 years, quantum computing would need to grow by over 324% annually, well beyond expectations.
Nevertheless, quantum computing poses a serious threat to Bitcoin. The Bitcoin protocol needs to be updated sooner than later to be quantum resilient. There are already discussions in the Bitcoin developer community about when and how to do this. Once these ideas are solidified, a Bitcoin Improvement Proposal (BIP) will be posted online for further debate and experimentation. If the community decides on a particular solution, it will take effect once the majority of Bitcoin nodes adopt it.
The changes being made to Bitcoin to meet this challenge pale in comparison to the demands placed on millions of other secure computing protocols and networks. The effort to update cryptographic protocols around the world will be an order of magnitude more complex than preparing for the year 2000.
Focusing on how quantum computing will impact cryptocurrency misses a much more important point: the end of encryption isn’t just a Bitcoin problem, it’s an everything problem. The transition to a post-quantum world will be a fundamental challenge to the backbone of modern civilization.
Encryption is everywhere
Encryption is the foundation of modern life and underlies virtually every aspect of technology-enabled society. Financial systems rely on RSA encryption to secure online banking transactions and ensure that sensitive data such as credit card numbers and account details are protected from theft. Without encryption there is no banking system.
E-commerce platforms use the same principles to protect payment data in transit between buyers and sellers. Without encryption there can be no e-commerce.
Hospitals and medical providers rely on encryption to transmit electronic health records and process payments. Without encryption there is no modern medical system.
Government agencies use encryption to secure confidential communications, protecting national secrets from potential adversaries. Without encryption there is no national security.
Encrypted commands secure Internet of Things (IoT) devices, from connected cars to smart home systems, and prevent malicious actors from taking control of everyday technology. Without encryption there are no smart devices.
Harvest now, decode later
Although the end of traditional encryption methods may still be years or even decades away, preparations for quantum supremacy in the face of the “harvest now, decrypt later” threat have already begun.
One of the key features of encryption is that it enables sending Secure messages over an insecure channel. For example, when you log into your bank account on your home computer, your password is encrypted before it is sent to your bank over the Internet. On the way there it can pass through numerous servers that could theoretically store and store it. However, since the password is encrypted, they would save a lot of nonsense. If you were a bad actor, you wouldn’t be able to decrypt the password, so storing it would be pointless.
That is, unless you store it for years or decades and wait for the day when you can decrypt the data with a quantum computer that has yet to be invented.
This might not make sense for a bank password. Like much other encrypted data, it would likely be irrelevant beyond a certain time horizon, even if decrypted decades later. Passwords are changed, accounts are closed, people die, and companies no longer exist…
