Bitcoin, block chain currencies, and quantum computing

Bitcoin, block chain currencies, and quantum computing

With bitcoin hitting all time highs and lows, it’s interesting to hear self-described pundits go on and on about the promises of crypto-currency. Surprisingly, one thing you don’t hear about is that the life of these currencies might be very limited now that quantum computers are becoming a reality.

Quantum computers are excellent at breaking mathematically difficult problems – which is the underlying technology for almost all of cryptography and block-chain algorithms. In October 2019, Google announced they have achieved quantum supremacy on a certain class of problems. So what does this mean for crypto-currencies?

I found this very succinct and excellent examination of quantum computers on the security of the Bitcoin blockchain. The results are not encouraging. All coins in the p2pk addresses and any reused p2pkh addresses are vulnerable. This means one should definitely follow the best practices of not re-using p2pkh addresses.

Interestingly enough, the most vulnerable ones are the ones in the p2pk addresses. The coins in this address range were some of the earliest coins mined. The ones still in that range are largely considered to belong to people who have long since lost their keys. This means they could easily be mined by anyone with a sufficiently large quantum computer – and claim 2 million bitcoins worth almost 70 BILLION dollars (assuming bitcoin is worth the current market price of $35,000).

Not only that, if 25% of a currency is vulnerable to be quietly captured by a single investor with a quantum computer – it represents a tremendous amount of power to manipulate the currency.

So, unused p2pkh coins are safe, right? Not really. The moment you want to transfer coins from such a “safe” address, you reveal the public key, making the address vulnerable. From that moment until your transaction is “mined”, an attacker who possesses a quantum computer gets a window of opportunity to steal your coins. In such an attack, the adversary will first derive your private key from the public key and then initiate a competing transaction to their own address. They will try to get priority over the original transaction by offering a higher mining fee.

The time for mining a transaction is about 10 minutes, calculations show that a quantum computer would take about 30 minutes to break a Bitcoin key. So, as long as that is true, your bitcoin transaction is …probably… safe. But that won’t last forever. It is an almost certainty quantum computing will make crypto-currencies worthless at some point – maybe even in our lifetime at the rate quantum computing is making advances.

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