Bitcoin quantum computers
What are Bitcoin quantum computers for? Quantum computers pose a threat to Bitcoin security. The massive computing power of quantum computers could penetrate Bitcoin security within 10 years, security experts say.
Bitcoin is taking the world by storm. The decentralized digital currency is a secure payment platform that anyone can use. It is free of government interference and is operated by an open, peer-to-peer network.
This independence is one of the reasons why Bitcoin has become so popular, and its value has soared. In early 2017, a single Bitcoin was worth about $1,000. By November 2017, the cryptocurrency had risen to around $7,000. In fact, the total value of the cryptocurrency market at various times amounts to an average of $250 billion.
A key feature of Bitcoin is its safety. Bitcoins have two important security features that prevent them from being stolen or copied. Both are based on cryptographic protocols that are difficult to crack. In other words, they use mathematical functions, such as factoring, which is light in one direction but heavy in the other, at least for a commonplace computer.
A problem on the horizon of Bitcoin quantum computers
There’s just one problem with these protocols – quantum computers can easily solve them and the first quantum computers are currently under development.
This raises an urgent question: how secure is Bitcoin for the kind of quantum attack that will be possible in the next few years?
Today we receive an answer, thanks to the work of Divesh Aggarwal and a few of his colleagues at the National University of Singapore. These people have studied the threat to Bitcoin by quantum computers and say that the danger is real and immediate.
First, it’s important to cover some background information. Bitcoin transactions are stored in a distributed GL that aggregates all transactions that run in a given time period (typically about 10 minutes). This collection, called a block, contains a cryptographic hash of the previous block that also contains a cryptographic hash of the previous block, and so on, in a chain, hence the term blockchain. A hash, on the other hand, is a mathematical function that converts a set of data of any length into a set of specific lengths.
The function of Bitcoin quantum computer attacks
The new block must also contain a number called a nonce, which has a special property. If this nonce is hashed or mathematically combined with the contents of the block, the result must be less than a specific target value.
Given the nonce and block contents, this is easy to show, allowing anyone to review the block. But generating the nonce is time-consuming, because the only way to do it is by using brute force – trying different numbers, one by one, until a nonce is found.
This process of finding a nonce, called mining, is rewarded with Bitcoins. The mining is so computationally intensive that the task is usually split among many computers that share the reward.
The block is then placed on the distributed GL and integrated into the blockchain after validation. The miners then start working on the next block.
Occasionally, two mining groups find different nonces and declare two different blocks. The Bitcoin protocol states that in this case, the block where more has been worked is added to the chain and the other is discarded.
This process has an Achilles’ heel. If a group of miners controls more than 50 percent of the computing power in the network, that group can generate blocks faster than the other 49 percent. In this case, they effectively control the ledger.
If the intentions are malicious, they can spend Bitcoins twice, by deleting transactions so that they never get into the blockchain. The other 49 percent of miners do not find out because they cannot monitor the mining process.
Malicious intentions with Bitcoin quantum computers
This creates a chance for a malicious owner of a quantum computer to be used as a Bitcoin miner. If this computing power exceeds the threshold of 50 percent, it can do whatever it wants.
Aggarwal and his colleagues specifically investigate the likelihood that a quantum computer in the network will become too powerful. They look at the projected clock speeds of quantum computers over the next 10 years and compare them to the likely performance of conventional hardware.
Their conclusion will be a relief to Bitcoin miners around the world. Aggarwal and Co. say that most of the mining is done by application-specific integrated circuits (ASICs) from companies such as NVIDIA. This hardware is likely to maintain a speed advantage over quantum computers over the next 10 years.
“We find that the work report used by Bitcoin over the next 10 years is relatively resistant to significant quantum computer acceleration, mainly because specialized ASIC miners are extremely fast compared to the estimated clock rate of short-term quantum computers,” he said.
Another threat from Bitcoin quantum computers
But there is another threat that is much more worrying. Bitcoin has another cryptographic security feature to ensure that only the owner of a Bitcoin can output it. It is based on the same mathematics used for public-key encryption schemes.
The idea is that the owner generates two numbers – a private key that is secret and a public key that is published. The public key can be easily generated from the private key, but not vice versa. A signature may be used to verify that the owner has the private key without revealing the private key, using a technique known as a signature scheme for an elliptic curve.
In this way, the recipient can verify that the owner owns the private key and thus has the right to issue the Bitcoin.
The only way to cheat this system is to compute the private key with the public key, which is extremely difficult with conventional computers. With a quantum computer, however, it is relatively easy.
Conclusion on Bitcoin quantum computers
Quantum computers pose a significant risk for Bitcoin. “The elliptic curve signature scheme used by Bitcoin is much more vulnerable and could be completely bypassed by a quantum computer in 2027,” say Aggarwal and Co.
In fact, quantum computers present a similar risk to all encryption schemes that use a similar technology that includes many common forms of encryption.
There are public-key schemes that are resistant to attacks by quantum computers, so it is conceivable that the Bitcoin protocols could be revised to make the system more secure. But that is not planned at this point.
Bitcoin is not in any difficulty. It has survived various storms over its safety but that’s no guarantee that things will be fine in the future. One thing is certain – the pressure to change will increase as the first powerful quantum computers go online in the next few years.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.