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Is Quantum Computing A Potential Threat For Blockchain?

Blockchain and bitcoin are all the rage now in the global market and everyone is trying to get in on the action. Blockchain as a technology almost seems too good to be true because of its impeccable transparency and security measures in place. Bitcoin, which is a decentralized digital currency, is promoting peer-to-peer transactions and setting an example for a monetary system that is free from governmental interference.

Bitcoin is partly popular because of its strict security features which make it next to impossible for people to either steal or copy them. These measures include cryptographic features which are hard to crack for ordinary classical computers.

What is Quantum Computing?

Quantum computing runs on the unique ability of subatomic particles to exist in more than one state at any time. The behaviour of tiniest particles allows for much quicker operations which use less energy than classical computers.

In case of classical computing, a bit is a single piece of information that can only exist in binary- 1 or 0. In quantum computing, quantum bits or ‘qubits’ are used instead. These are quantum systems with two states. They can store much more information than just 1 or 0, because they can exist in any superposition of these values.

How can they threaten Bitcoins?

Quantum computers can solve the cryptographic problems that bitcoins uses for its security purposes, quite easily. Divesh Aggarwal at the National University of Singapore and a few others have studied the threat that quantum computing poses to Bitcoin.

A Bitcoin transaction is stored in a distributed ledger that stores the totals number of deals carried out in a specific time period, which is usually about 10 minutes. This amalgamation is called a block and it contains a cryptographic hash of the previous block, which in turn contains a cryptographic hash of the one before that, and thus forms a chain.

The new block also contains a number called a nonce, which when hashed with the content of the block, will result in something less than some specific target value.

The process of finding a nonce is called mining, which is rewarded with Bitcoins. This process is spread out amongst many computers which are all rewarded with bitcoins.

The block is then put on the distributed ledger which when verified, is incorporated into the blockchain.

A quantum computer comes into play here. It has a computational power much stronger than classical computers that can pose a threat to the process of mining. Additionally, it can disrupt the security measure which guarantees that only the owner of a Bitcoin can spend it. The owner generates a private key and a public key that is published. Quantum computing can potentially calculate the private key using the public key quite conveniently.

Aggarwal says,  “The elliptic curve signature scheme used by Bitcoin is much more at risk, and could be completely broken by a quantum computer as early as 2027.”

Thus, it is quite possible that once quantum computers are developed, it can pose an imminent threat to bitcoins and blockchain.