Over the past decade, cryptocurrency has grown into an asset class that has provided a system, removing interference from external third parties.
As such, crypto holds the key to changing finance as we know it. But there is a security threat to cryptocurrencies like Bitcoin.
This threat comes in the form of Quantum computers, which could exploit certain vulnerabilities in the Bitcoin network.
But just how serious are these new supercomputers?
What is quantum computing?
Quantum computing represents a huge leap forward in the way computers solve problems. They do this by using quantum mechanics, which allows them to solve problems that even today’s most powerful computers cannot.
Quantum computers use “superfluid” to cool superconductors – about a hundredth of a degree above freezing.
This allows the computer to be powered by manipulating data stored as charged atoms, called qubits. The more qubits, the more powerful the computer.
Quantum computers today only allow a small number of qubits, but as technology advances they could harness the power of thousands of qubits.
Without getting into too much technicality, it allows computers to solve much more difficult real-world problems.
For example, quantum computers have been used to develop a new generation of highly advanced electric vehicles through the use of quantum battery technology.
The threat of Quantum computing to Bitcoin
As exciting as this new technology is, the power of these new computers could potentially be used to exploit weaknesses in the Bitcoin network.
Bitcoin’s technology, namely its SHA-256 algorithm, currently protects it from traditional hacking techniques.
However, a quantum computer could pose a security risk, depending on the vulnerability to the elliptical curve and how the Bitcoin network processes transactions.
As crypto becomes more mainstream, it looks like quantum computers will also become mainstream over the next decade, potentially putting crypto and financial markets in general at risk if this technology falls into the wrong hands.
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How Bitcoin is Vulnerable
Anyone who owns Bitcoin uses a private key, which basically works like a password and consists of a unique private number.
These keys are also used to sign transactions and prove ownership of any type of blockchain address.
Public key cryptography prevents any hacker using any of today’s technologies from cracking the code.
However, if quantum computing continues on its forward trajectory, there will almost certainly be a day when one of these computers could crack the code.
This poses a potential threat to the cryptocurrency, as some of them are valued at hundreds of billions of dollars. Bitcoin alone has a current market cap value of US $ 922 billion.
Addressing the problem of quantum computing
Fortunately, the problem of cryptographic security in the face of this powerful and constantly evolving technology is solved.
The problem can be solved through the adoption of post-quantum cryptography technology. In fact, the US government’s National Institute of Standards and Technology (NIST) has been working on a way to find quanta-proof cryptography algorithms.
Additionally, many other blockchains, like Ethereum, have worked tirelessly to produce quantum resistant software.
However, for these already existing blockchains, due to the decentralized nature of crypto, more than half of its users must be convinced to develop a new “fork” of the existing blockchain.
This means that the biggest problem could be adjusting the governance structures of various blockchains.
The bottom line
The emergence of blockchain technology in conjunction with quantum computing, is sure to forge new security concerns as we move into the 2020s.
There has always been a battle between security systems and who wants to break into them. One zigzags, the other zags.
Ultimately, the organic development of blockchain technology means that it will likely be updated to protect against threats posed by quantum computing.