Quantum Computers and Cryptocurrencies

Technological growth is constant in the world right now, and each day new innovations, ideas, technologies, and implementations of already existing technologies are born into the world. Currently at the top of the list of prominent inventions is quantum computing. The new generation of computer systems is better than the binary systems we have been using for a long time.

What Are Quantum Computers?

Quantum computers are systems that make use of the quantum mechanical phenomenon to store and process data. Rather than make use of traditional bits, quantum computers make use of qubits, or quantum bits, which are able to coexist in the states of 1s and 0s simultaneously.

Two bits have four possible combinations and can only hold one combination at a time, while a single pair of qubits is able to store all four combinations simultaneously. This means they have the capacity to go through way more data.

What is Quantum Computing?

Quantum computing is a new field of computer science that uses the ideas of quantum theory to solve math problems and run quantum models. Quantum computing applies subatomic particles like electrons or photons and pairs them with quantum bits, or qubits, which allow these particles to be in more than one state at a time.

What this means is that connected qubits can make use of the interference between their wave-like quantum states to carry out calculations that would take everyday binary computers forever to handle. The quantum computing field was introduced in the 1980s when it was discovered that specific computation problems could be handled with quantum algorithms rather than the current binary computers.

Quantum computing can figure out a lot of different possibilities and find possible answers to a lot of hard problems. The everyday system stores information in the form of bits, while quantum computers make use of qubits to store information in a quantum stage that applies 1s and 0s in a multidimensional way.

How Do Quantum Computers Work?

Quantum computers are very different from traditional computers. They process information in a way that does not follow the conventional binary bits that we are used to. Instead, quantum computers process information through quantum bits, or qubits.

Qubits have a technique called superposition, which is the ability of a quantum system to be in multiple states at the same time until it is measured. Quantum computers make use of several algorithms to measure and observe. These algorithms are made available by users, and the computer then creates a multidimensional space where patterns and personal data points are stored.

Source: Towards Data Science

One major factor in how quantum computers work is the physical build of the computer. A standard quantum computer consists of three major parts. The first part is the traditional computer and infrastructure that are in charge of the programming and send instructions to the quantum bits.

The second part is a selected method of transferring signals from the computer to the qubits. The third and final part is the storage unit used to safeguard the qubits. This storage unit must be equipped with the tools needed to stabilize the qubits. The storage unit must meet certain needs and requirements, like achieving near zero degrees to house a vacuum chamber.

This part is necessary due to the high-maintenance nature of qubits. Any slight issue could result in the loss of a quantum state or error-prone qubits descending into decoherence. So it is essential to prevent even the slightest vibrations and temperature shifts to avoid the loss of qubits.

What Is Quantum Computing Used For?

The traditional system is used to solve several problems and carry out different calculations. Quantum is no different from it in this aspect since the system is capable of handling challenges. Quantum computing has several use cases, like artificial intelligence, rendering financial services, and complex manufacturing.

Artificial Intelligence

Quantum computing could potentially analyze and process a ton of data faster than the traditional system, which makes it a better option when it comes to being applied to artificial technology. Quantum computers are able to spot patterns that are hard or impossible for traditional systems to identify. They can gather, combine, and rearrange existing ideas in ways humans and the traditional system would not be able to.

Rendering Financial Services

The financial sector is one area that requires the processing power of quantum computers. The large data sets financial institutions have to sort through would be handled by a quantum computer. These could benefit numerous areas of the financial sector, like capital markets, corporate finance, portfolio management, and many more. Lastly, since quantum computers thrive in areas with live data streams, their processing capabilities will make it easier to diffuse the high level of data gathered from real-time equity prices.

Complex Manufacturing

Quantum computers can gather large data sets from failed manufacturing processes and translate them to different combinations of challenges, which when paired with a quantum algorithm can identify which part of a complex manufacturing process led to the product failure.

Types of Attack

Although quantum computing is still in its early stages of development, experts are already predicting the future potential of this technology as well as the potential for abuse.

In the near future, two major attacks could be made possible by new technologies that could pose a threat to digital security.

Storage Attack

This kind of attack involves a malicious person targeting vulnerable addresses (wallets that have their public key stored on the blockchain) to steal funds. This means tokens like Bitcoin and Ethereum will be more vulnerable to quantum computer attacks when equipped with sufficient resources.

This means hundreds of billions of dollars worth of cryptocurrencies could be vulnerable to storage attacks. Currently, quantum computers do not have the 10 million qubits that would be required to carry out such an attack, but scientists foresee such computing power being achieved in around 10 to 15 years.

Transit Attack

A transit attack would require a malicious actor to attempt hijacking a blockchain transaction midway and directing the funds to their own address. This would require a lot of computing power, but on a much larger scale and with greater difficulty, as the hijack must be completed before the transaction is processed by the miners.

For such a task to be accomplished, scientists predict that a quantum computer would require billions of qubits.

Is Quantum Computing A Threat To Cryptocurrencies?

The current supply of quantum computers is a major indicator that the new system doesn’t pose much of a threat to the cryptocurrency sector for now. Although the abilities of quantum computing are numerous, it would need to be free of errors and concerns, coupled with enhanced computational speeds, before it could accomplish such a feat.

Apart from the computational speed, it would also need an unreal level of computational power to be able to launch an attack on the storage facilities. It would need around 10 million qubits before it would be able to launch such an attack.

A transit attack would be a lot larger since the level of computational power needed would be higher. The attacker would have to deploy a massive amount of quantum computing power to gain control of the network before the block creation time runs out. This is a much harder task, considering it would involve attacking all the network nodes. The window for this operation is relatively slim. For example, an attack on Bitcoin would require the attacker to complete the process in a few minutes, while that on Ethereum would have to be completed in tens of seconds.

With the amount of quantum computing power needed, the crypto industry is currently not under threat; instead, they have enough time to come up with an algorithm that is immune to quantum attacks.

Protection Against Quantum Computing

Currently, only the potential threat quantum computing poses is known. Cryptocurrency enthusiasts and blockchain developers are now looking for ways to protect the digital currency world from the threat quantum computers pose. The most popular suggestion is lattice-based cryptography.

Lattice-based Cryptography is the construction of a cryptography that involves lattices, either in the security proof or the construction itself. It is one of the less popular public-key schemes that can stand the attack of both traditional and quantum computers. This is because it is based on a problem that quantum computers might not be able to solve easily.

These questions are called the Shortest Vector Problem (SVP). This type of question generally involves finding the shortest vector in a high-dimensional lattice. Experts out there believe that the SVP is difficult for quantum computers to solve due to the way quantum computers function.

In a quantum computer, only when the qubit states align completely can the superposition principle be used; when the states are not aligned, it must resort to more conventional methods of computation, which is why it is very unlikely to succeed in solving the SVP.

There are projects out there like IOTA that already use directed acyclic graph (DAG) technology, which, according to experts, is quantum-resistant. A directed acyclic graph, unlike blockchains built up with blocks, is made up of nodes and connections. The technology records cryptographic transactions in the form of nodes, and the records of these exchanges are stacked on top of one another.

Weaknesses of Quantum Computers

Most computing systems are not 100% free from faults, and quantum computers are not an exception to that rule. One major disadvantage to quantum computing is that most quantum computers today are largely prototypes and are still bulky, expensive, and not user-friendly.

It is also plagued with teething problems that developers are still having trouble solving. Another major problem is the issue of entanglement. The entanglement of several qubits simultaneously is as hard as ensuring the proper state for quantum processes.

Last but not least, the results of quantum processes still have a very high error rate. If all of these issues were resolved, there would be a security issue that quantum computers pose to encryption mechanisms. The vast computing power would render all currently used encryption mechanisms useless.

Any transaction or any type of secure connection carried out on the internet could be cracked, leading to stolen data that can be misused or sold. This would pose a problem for cryptocurrencies, as it would eliminate the security and anonymity that come with the platform.