What is quantum computing?
Since 1960, machine power has grown exponentially. Computer parts are approaching the size of atoms. In the quantum realm, physics works a bit differently from the traditional one. We are approaching a real barrier to our technological progress.
In normal computers, bits are the smallest units of information.
Quantum computers use qubits. They can be any 2 level quantum system such as the spin, and the magnetic field, or a single photon. Superposition takes place. It has to decide to be vertically or horizontally polarized. That means that as long as it is not observed, the qubit is in a superposition of probabilities of 0 or 1. The instance you measure it, it collapses to one of the states.
These improvements give quantum computers the ability to read through databases way faster, at the square root of the time of a normal computer.
Considering the cybersecurity aspect, quantum computers may be a problem. Your public key, which you use to encrypt the data, is provided and can be used to calculate your private key. Luckily, doing that on a normal computer would take years. In quantum, thanks to its fascinating computer power, it would take drastically less time.
Will quantum computing threaten cryptocurrencies?
Bitcoin, as well as other cryptocurrencies, is secured by cryptographic algorithms. These cryptographic algorithms have special rules upon which cryptosystems rely on. If quantum computers were to break them, the whole crypto world would be in trouble.
Bitcoin’s signature algorithm
The algorithm is used to generate a public-private key pair. That’s what you need to do to sign transactions. This is called asymmetric encryption, which relies on the math property of the difficulty to factor large numbers.
If current computers were to factor those large numbers or try to derive the private key from a public key, that would take 10 billion years, which is a ridiculous effort for people to even try. But with quantum computers and Shor’s algorithm, this can be factored much more easily.
Multiple attacks are possible:
When you send a transaction, the public key is part of it. Therefore, it is visible, and the attacker has access to it. That is no issue if there are 0 cryptos there. If you have spent all the coins at once, you have never sent a second transaction, so they won’t know what to take. When someone sends more bitcoin to the same address, they can use the first one. Do not reuse addresses! It is better and safer to generate a new one.
The blockchain avoids double-spending by separately verifying the transactions with multiple confirmation processes. When you broadcast the transaction, the attacker can do derivations working from public to private keys. They can see the same coin and double-spend that coin, trying to spend the same coins.
Breaking the hashing algorithm
Cryptocurrencies use SHA-256 excessively for generating hashes. They are widely utilized in mining and doing proof of work. If you can break it, it is a mining takeover. You need to randomly guess and mine a lot as well. Although it is unlikely for quantum computers to break these algorithms, the possibility remains.
There is nothing to worry about!
Breaking hash algorithms is much harder. We should also keep in mind that, as quantum computing evolves, post-quantum encryption is in progress. The cryptocurrency world is preparing for a technology breakthrough that may oppose danger.
There are constantly hardware and software changes that improve security and reliability in the blockchain unless they do another breakthrough or an unexpected quantum speedup.