Can Quantum Computing Compromise Bitcoin Security?
In October 2008, Satoshi Nakamoto, a pseudo name or group, released the white paper of a digital coin that would potentially substitute fiat currency (government-issued money). The name of the virtual currency or cryptocurrency – you guessed right – is Bitcoin. It was assigned the acronym BTC (similar to USD – United State Dollar). Later in January 2009, Nakamoto would later kick off the implementation and creation of the bitcoin network (also known as Bitcoin Blockchain). Well, a blockchain has decentralized ledgers (blocks) distributed across nodes (computers) that are cryptographically linked through peer-to-peer connections (chains). The creator deployed open-source codes that would enable developers to improve on the network in the future. On January 3 2009, Nakamoto announced that its mining, a method used for harvesting new coins by solving certain problems, has started in earnest.
Many years later, similar virtual coins were launched to proffer unique solutions to financial, utility and investment challenges. These new digital coins that came after Bitcoin were collectively called alternative coins or altcoins. Even though Nakamoto’s dream of replacing fiat currency seems like another wild goose chase, Bitcoin and altcoins have so far made both positive and negative impacts. For instance, it must be established here that they have created an entirely new (crypto) industry, made numerous devout traders and investors overnight millions, and have given new jobs to tens of thousands of people worldwide. On the flipside, nobody should turn a blind eye to the fact that Bitcoin literarily has also literally sent some people to their early graves – no thanks to unending market volatility and perceived manipulations.
Admittedly, Bitcoin has some downsides, but the merits by far outweigh them, meaning that a lot is at stake if quantum computing shatters its difficult-to-hack security. So, to better grasp how quantum computing is likely to ruin the preeminent virtual coin in the future, the best bet is to exam its so-called tamperproof security architecture.
Core Security Architecture of Bitcoin Blockchain
The key features discussed explain why Bitcoin proponents claim that its blockchain is unhackable.
- Mining
You see, Bitcoin Blockchain has a reward system known as Proof of Work (PoW). Just as its name connotes, PoW is a reward system (or consensus algorithm) that enables nodes or miners to create a new block after successfully solving a puzzle. As mentioned earlier, this process of solving the problem is known as mining. In real life, completing that task requires a lot of computational power. Additionally, it involves a lot of trial and error. Once a miner has solved the puzzle, it will be propagated in the network, allowing all nodes to verify, agree (consensus) and save the latest copy of the ledger. This means that the entire system is decentralized because a single node or user does not make decisions for the rest or delegate tasks to others. Hence, Bitcoin evangelists say it has an unhackable network. Then again, the network is trustless – that’s why users have to verify and agree before new blocks are added.
- Cryptography
In all fairness, Bitcoin has a good security architecture because it is built around cryptography, a mathematical and computational method of encoding and decoding data to maintain its integrity in a trustless network. Bitcoin uses three different cryptographic mechanisms for generating its keys (both public and private keys) and mining. Thanks to cryptography – users can anonymously send and receive messages across the platform. That’s not all as cryptography also secures transactions, guarantees that the entire system has no room for a central authority, and completely eliminates double spending (the risk that Bitcoin can be spent twice or more).
Can Quantum Computing Break Bitcoin Security?
At the time of writing, Bitcoin market cap stands at $580 billion and 1 BTC exchanges for $30k (Source: Coindesk). If quantum computing can undermine Bitcoin, a market of over $580 billion is likely to go down the drain. To buttress this fact, one study conducted by leading finance and accounting firm Deloitte shows that Bitcoin blockchain is vulnerable to quantum attack. Clarifying their findings, the Quantum Security Lead at Deloitte, Itan Barnes, noted that when large numbers of quantum computers go into circulation, they can systematically threaten the digital coin. But is this true? Well, let’s analyze it together by assessing how quantum computing could affect mining and cryptography.
Now, notice that since the Bitcoin Blockchain is decentralized, there is no central authority that mans the activities taking place on the platform. So, to keep the system safe, an automated system filters and eliminates dishonest users who may want to undermine the trustless network. Because quantum devices can perform higher calculations, it simply means that such machines could outperform classical computers in their quest to solve the puzzle (mining). This means that while miners put in all the work to solve puzzles, quantum devices solve the same problem in the twinkling of an eye. This is a red flag!
However, today’s quantum machines have clock cycle time considerably lower than that of ASIC (Application-Specific Integrated Circuit) miners, which are mainly used for mining. One now wonders why quantum devices, which have lower clock cycle time, perform more calculations than conventional computers. Well, the founder of Quantum Computing UK, Macaulay Coggins, explains that instead of relying on faster clock speed, quantum devices perform tasks faster than the conventional computers because they can combine problems and solve them in parallel. In spite of that, the cheering news is that experts estimate that given the rate of advancement of quantum technology, the world has to wait until 2028 before such machines that can undermine ASIC chip technology will be in commercial quantity.
The Storm isn’t Over Yet
Much as miners don’t have to worry until 2028, cryptography is another cause for concern. To grasp the threat here, you need to know what elliptic curve digital signature algorithm (ECDSA) means. ECDSA is a cryptographic mechanism used to link public keys to private keys. Remember, these keys are important because they are digital destinations in cryptocurrency, so they help users to send, receive and hold the virtual coins in digital wallets. When a user sends some digital coins, the public key of the receiver is propagated across the network, indicating that a transaction has been initiated. If quantum machines can break ECDSA, it becomes pretty difficult to differentiate a user’s public key from his private key. As you know, private keys are not meant to be disclosed to anyone because they are like a crypto holder’s password. When quantum devices break ECDSA, an unauthorized user can easily access private keys, leaving crypto holders at the mercy of cybercriminals. If this happens, in theory, there are over four million Bitcoin addresses at risk worldwide. The good thing, however, is that Bitcoin wallets don’t use the same key pairs all the time.
For more insight into this dilemma, in January 2022, a team of researchers at Sussex University published a report that assessed how vulnerable Bitcoin would be with the advent of quantum computing. The study showed that for the new asset class to be at risk of quantum attack, it could only take a quantum computer of 1.9 billion-qubit capacity to achieve that. Giving more details, the team disclosed that 317 million qubits would take an hour to crack the security architecture of Bitcoin Blockchain. Interestingly enough, today’s best quantum computer, IBM’s Eagle Processor, has just about 127 qubits. So, in conclusion, there is a distinct possibility that quantum computing can crack the tamperproof security of Bitcoin Blockchain, but it will take a long time for the tech world to get to that worrisome stage.
