Crypto Assets and Quantum Computing
In The Code Book: The Science of Secrecy from Ancient Egypt to Quantum Cryptography, Simon Singh takes the reader on a journey through the history of encryption. He traces the evolution of cryptography and details its dramatic effects on wars, nations and individual lives. In reading The Code Book, it becomes clear that throughout history, there has been a constant tension between codemakers and codebreakers. At times, the codebreakers have had the upper hand. Other times it has been the codemakers.
The codemakers are currently winning the battle. Current encryption methods appear impregnable, successfully securing our online transactions, data and messages. Popular messaging services like WhatsApp offer “end-to-end encryption”, meaning messages can only be seen by the sender and receiver. If a message were to be intercepted, it is nearly impossible to decrypt. While words like “cryptography” and “encryption” often attract sinister connotations, they are used more widely and more positively than people might think.
Crypto assets are governed and protected by cryptography. Indeed, “crypto assets” are so-called as they are based on cryptography. Crypto assets combine knowledge of several academic fields including mathematics, computer science, finance and cryptography.
Cryptography is fundamental to the security and operation of crypto assets. And that cryptography is very strong. We like this infographic which shows the likelihood of cracking a Bitcoin private key.
While modern day codemakers have the upper hand on codebreakers, what are the threats to this position? Will quantum computing be the secret weapon of the codebreakers? Could this affect the security of crypto assets?
Quantum computers are powerful machines that are an order of magnitude more powerful than today’s most advanced computers. Without delving into the detail, quantum computing allows computers to work through problems by performing calculations in parallel, rather than sequentially.
Google has claimed “quantum supremacy” over the most powerful supercomputers in the world, by solving a problem considered virtually unsolvable for modern day computers. It’s quantum computer, called Sycamore, has claimed to have completed a complex calculation in 200 seconds. The same calculation would take the world’s most powerful supercomputers 10,000 years.
Threats to Crypto Assets
It is impossible to predict how technology will evolve. It is tempting and attention grabbing to make wild predictions, but we will focus on what we know.
Blockchain networks appear safe. Blockchain ledgers are distributed to thousands of participants. It is impossible to simultaneously alter everyone’s copy of the record. No data block can be removed or modified without affecting all other blocks, requiring consensus.
Quantum computing might pose as a threat to public key cryptography, the backbone of blockchain security. Put simply, incredibly powerful quantum computers might change the equations in the image above.
Many experts believe the threat of quantum computing will arise in the next ten to 15 years. The preceding paragraph applies assuming quantum computing advances, but cryptography stands still. Today’s quantum computers exist only in the lab. Accordingly, the codemakers are adapting with proposed countermeasures in the form of quantum-proof cryptography. By the time quantum computers are available to the wider public, it is reasonable to expect that most cryptocurrencies will have already made the leap into a quantum-resistance movement.
The Code Book by Simon Singh has at least one clear lesson: encryption methods are safe, until they are not. Codemakers have throughout history developed impregnable encryption methods, to realise that they are in fact breakable. Leading cryptographers and crypto asset projects will need to stay on top of these developments. However, perhaps unlike previous users of cryptography throughout history, with a market value of a quarter of a trillion dollars, the bounty on the security of crypto assets, and the value that needs to be protected, might be historically unprecedented.