The Quantum Threat To Cryptocurrency: Why We Need To Act Now

The world of crypto has weathered many storms over the years ; exchange thefts, market collapses, government shutdowns, and myriad predictions of the end of days for it., but there’s a new threat emerging on the horizon that potentially could destroy at its core the very nature of digital assets we now hold dear: quantum computing.

This is no distant science fiction scenario anymore; it’s a rapidly evolving reality that demands our immediate attention.

For years, quantum computing has been science fiction, Star Trek-style, theoretical and way, way off on the horizon, never to be practical. That’s changing fast. The giant technology companies like IBM, Google, and Amazon are investing billions of dollars into quantum research, and the breakthroughs have been advancing at a rate that’s becoming really alarming.

What’s so troubling for cryptocurrency investors is that quantum computers don’t simply provide incremental gains over traditional computers; they offer an entirely different paradigm for computing that could make our existing security precautions obsolete overnight. The tech is accelerating. The crux of the matter is that cryptocurrencies protect our money.

Every Bitcoin transfer, every Ethereum smart contract, every virtual purse is secured by cryptographic routines that are basically impenetrable to hackers using computers now.
These mathematical problems would take classical computers millennia to crack, effectively rendering them impossible to solve.

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Quantum computers, however, operate on entirely different principles, using quantum bits that exist in many states simultaneously. Quantum parallelism allows them to test millions of solutions simultaneously, potentially cracking these “impossible” cryptographic problems in hours or days instead of millennia.

Think about what that means for your Bitcoin wallet. Your private key is now being protected by cryptographic methods that would take conventional computers longer than the universe has currently existed. But an enormous enough quantum computer could possibly break through that protection in hours.

It’s not just Bitcoin, though ,Ethereum, Litecoin, and basically all other cryptocurrencies are built atop similar cryptographic concepts that are potentially vulnerable to quantum attacks. The better news is that the cryptocurrency world is not idly standing by. Ethereum co-founder Joe Lubin has been vocal and adamant about the necessity of quantum-resistant infrastructure, and has had ongoing conversations with sovereign wealth funds and large financial institutions regarding deploying quantum-resilient systems across the Ethereum platform. (source:
 https://decrypt.co/323502/ethereum-co-founder-sovereign-wealth-funds-buy-eth)

These discussions represent a valuable step in the positive direction, considering institutional engagement is likely to accelerate the development and deployment of fresh security solutions. Layer-1 and Layer-2 solutions are looked at as potential ways towards quantum resistance. Layer-1 upgrades involve enhancing the underlying blockchain protocol itself so that it incorporates quantum-resistant cryptographic methods.

Layer-2 solutions, however, might offer quantum-resistant transaction processing atop pre-existing blockchain infrastructure. Both schemes make sense, but they need collaboration throughout the entire cryptocurrency ecosystem in order to work.

But infrastructure upgrades will only take things so far if individual wallets remain vulnerable. That is where everyday cryptocurrency users need to step up and demand change. Wallet providers, whether they be hardware companies like Ledger and Trezor, or software companies building mobile and desktop applications need to be made aware by their users that quantum-resistant cryptography matters.

I have a Ledger Nano X wallet and am now corresponding with them to inquire about what developments that they are focused on.

Too many of the providers are playing a game of “wait and see,” thinking they’ll have sufficient time to incorporate quantum-resistant protocols once the threat is closer. The reality is that progress in quantum computing isn’t on a schedule. It could accelerate.

Advances could come quickly, and by the time a quantum computer ready to crack today’s cryptography defenses is about to be announced, it could already be too late to implement protective technologies.

The crypto community learned this the hard way with many security vulnerabilities being exploited prior to patches being available.

For individual investors, there are some things you can do today to reduce your quantum risk, but they do not remove the risk completely. Never reusing addresses is critical. Every address on a Bitcoin only needs to be used once because reused addresses expose more cryptographic information that could be hypothetically attacked by quantum algorithms.

Maintaining wallet firmware updated guarantees you the most up-to-date security patches and enhancements. Having decentralized swap protocols over centralized exchanges cuts the number of possible attack vectors, although this is more a matter of overall security hygiene rather than quantum-specific defense.

The window of opportunity for being prepared ahead of time is closing. Scientists estimate that the introduction of quantum computers to crack existing encryption measures will occur between a five to ten year period, but with some estimates placing it sooner if breakthroughs accelerate innovation.

Unlike other technological changes, however, this one will offer no gradual transition period. The shift from quantum-vulnerable to quantum-resistant will need to take place rapidly once practical quantum computers emerge.

The crypto sphere has always been convinced of being on the cutting edge and technologically smart. Now it is time to live up to that reputation by demanding quantum-safe technology when it is not absolutely necessary yet. Security for the future of digital assets is what we do today.

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See more about crypto risk management at https://cryptoflowzone.com/

Disclosure: The author holds Bitcoin (BTC).