December 30, 2020 |James Messi
Quantum Computing and Cryptocurrencies
Quantum computing has become a buzzword in the cryptocurrency world. Much talk has gone around about how much less secure cryptocurrency could become once quantum computing becomes commonplace. Let me be clear – this is simply an exaggeration that should be taken as seriously as a colleague bragging about how many “bit coins” he used to own back in the day.
Quantum computing is an interesting development in science and can be studied more closely if that’s something that you’re interested in – however, its effects on cryptocurrency are, at the moment, very minor.
Where Quantum Computing is Today
Traditional computing works with “bits” – just quickly moving 1s and 0s into the right place. Quantum computing works with something called qbits – and uses their unique quantum properties to complete calculations in a fraction of the time that it would take for traditional physical bits to figure out.
Understanding what quantum computing does is not as important as understanding that it can complete some tasks faster than a traditional computer would be able to, but other tasks it simply is not the right tool for. The idea of “quantum supremacy” is a hot topic that could eventually come to pass, but the foundation for quantum computers to be effective still needs to be laid.
Quantum computers are without a doubt faster at specific tasks – but the list of specific tasks that these computers are good at is relatively small at the moment. While quantum computers are better, they are not universally better than traditional computers.
Most, if not all, of functional computing is working on a system that uses traditional computing – for quantum supremacy to be realized, much of the original foundation for what we know of as computing needs to be changed. This means that the days of quantum supremacy are far off in the future – once quantum computers are commonly used it will still take decades for traditional computing to be phased out and will likely never be made completely obsolete.
Quantum Computing and Security Threats
Currently, many coins and exchanges use complex algorithms to secure their user’s data and currency. These algorithms are created extremely well and are so complex that they would take a proverbial lifetime for a traditional computer to crack. This makes the attempt for a computer to crack it almost completely moot.
The concern that comes with quantum computing is that a quantum computer could, in theory, break certain security algorithms that were previously impenetrable by traditional computing. With a large enough quantum computer and enough time allotted, the quantum computer could break an algorithm previously untouchable.
That said, many algorithms are already claiming that they are “quantum secure” meaning that they are sure that even a large quantum computer couldn’t crack it. This is a bold statement to make, given that we aren’t even clear on where the limits of a quantum computer are.
Should the day come when quantum computers are easily able to decode algorithms created by traditional computers, we would then need to enter an age where algorithms created explicitly for quantum computers (and likely by quantum computers).
Security in the Science
Bitcoin is still safe, and will be safe after quantum computers become the norm. Even if a Bitcoin wallet were to be cracked, the safety measures that are being encouraged and applied today are severely reducing the risk of an attack like this. Users are not reusing wallets, using 2FA, creating burner emails for specific transactions – all of these things along with regularly updating your passwords will keep you from an attack.
Even the fastest quantum computer is useless if it hacks an empty wallet. Make sure you’re ready by starting these security practices today.
Quantum computing still does have the potential to change the landscape of cryptocurrency. Bitcoin miners have always had Moore’s law on their side – the prediction that the speed of computing will double every year (paraphrased).
Moore’s law creates a sort of exponential curve in the expectancy of how fast we will be able to compute something. The threat of quantum computing significantly messes with our estimations – and could incredibly increase the rate at which we are able to mine Bitcoin and other currencies.
If quantum computing does change the curve that we have been correctly predicting since 1965, Bitcoin owners could have a bit of an inflation problem on their hands.
Quantum computing could potentially increase the rate at which each coin is mined, and with an unexpected increase in the amount of currency, the price of Bitcoin could do flips.
Quantum computing is a very interesting topic and will likely have a significant impact on the cryptocurrency market as a whole – but the impacts will likely not be the ones that people are stressing about currently. Only time will tell exactly what quantum computing brings to the table, and as our understanding of these things increase so will our understanding of the effects they could have.