Bitcoin and cryptocurrency have been subjects of discussion within the financial space for years. The assets’ value and prospects have made many tops, and even smaller market analysts look to invest in crypto. Many have used different prediction algorithms to determine that bitcoin could hit the $1 million value in a few years.
Getting new bitcoin is done through mining and involves many computers solving complex cryptographic equations. However, the emergence of a new computing technology, quantum computing, was seen as a significant threat against Bitcoin and crypto mining.
What is quantum computing?
Oxford Dictionary defines quantum computing as a futuristic class of computing that leverages the quantum state of particles to store data. However, the general idea is that Quantum computing is a field leveraging quantum mechanics to solve complex problems. It’s a unique futuristic field of computing. How does it work?
It works by exploiting the simple principles guiding quantum mechanics. Classic standard computers leverage binary numbers, popularly known as ones and zeros. Traditional computers can store data in bits of 1 or 0.
Contrarily, Quantum computing leverages other data units called quantum bits or qubits. Qubits store multiple values running concurrently. A Quora user and Digibite developers posted a comical explanation of the simple workings of quantum computers—quite a good read.
The distinction in the data units between Quantum and classic computers gives the former a performance advantage. In theory, because of the efficient data units used in quantum computing, the mechanics are faster in solving super complex algorithms that would take a classic computer long to solve.
Furthermore, due to their reliance on binary bytes, classic computers can only run a single complex algorithm simultaneously. Hence, these machines are hard or sometimes impossible to scale.
However, those operating from a quantum level, with qubits as the data unit, can run multiple simulations concurrently and still provide solutions faster and more efficiently.
The risk posed by quantum computers to crypto mining
There have been theories that quantum computing bears some risk to cryptocurrency mining. So, crypto mining is a blockchain activity that involves solving complex cryptographic equations to get the next block. It is the popular mechanism driving the proof of work blockchain networks like Bitcoin. Many technical analysts suggest that crypto mining threatens SHA256 and encryption algorithms.
Quantum computing: Threat to SHA256 Algorithm
As already established, proof of work is the primary algorithm for mining crypto assets. Many PoW blockchains use the SHA256 algorithm. Even the most prominent crypto asset, Bitcoin, uses the SHA256 algorithm to propel the creation of the next block.
An academic paper from Sussex University, written in 2022, warned that the growth of the quantum computing world poses a threat to the SHA256 algorithm. In essence, the author of this paper discovered that quantum computers could completely break the SHA256 algorithm.
In a PoW mining setup, the miner works to find a numerical code that adheres to the SHA256 algorithm. The process involves hashing, where they leverage the SHA256 to get the cryptographic hash.
Solving the equation involves quadrillions of guesses every other second before getting the actual number. The SHA256 mining has been rendered relatively easy by leveraging ASIC devices, which are hardware fashioned for the sole goal of mining. The difficulty of solving the cryptographic equations, even with the ASICs, is what secures the Bitcoin blockchain.
However, the theory is that quantum computers can solve even the most complex equations in seconds. This means that the ‘mining difficulty‘ could be rendered entirely useless owing to the emergence of quantum computers.
Quantum computing: Threat to Encryption Algorithm
Aside from crashing the SHA256, reports indicate that quantum computers threaten Bitcoin’s encryption mechanism ECDSA (Elliptical Curve Digital Signature Algorithm). The ECDSA has resisted breaking with only theoretical vulnerability against Shor’s algorithm.
Interestingly, the theoretical Shor algorithm cannot be run on a base-level classic computer. Theories indicate that the most reasonable computer to run the algorithm must have atleast 3000 qubits, which is the minimum approximation.
Currently, the best quantum computer ranges between 50-150 qubits. Even the latest Fujitsu quantum computer only has about 64 qubits. IBM’s, which is the largest, has about 127 qubits.
Since 3000 qubits are the minimum target, it’s safe to say that the world is far away from a computer that can crack the Bitcoin encryption mechanism. However, the possibility of breaking the encryption is there.
The research from the University of Sussex noted that a quantum computer with 1.9 billion qubits could break the entirety of Bitcoin’s encryption in about 10 minutes. One with 13 million could do the job in about 24 hours.
Indeed, the threat of these supercomputers ultimately killing Bitcoin is there. With enough cubit power, those machines could be a threat to Bitcoin and the crypto industry at large.
However, this threat is highly overrated! But why?
As mentioned, cracking Bitcoin’s code could require a quantum computer powered by thousands, even tens of thousands of qubits. Even then, it will take very long, probably years, for actual damage to be done based on analysis.
The super quantum computer space is too young to threaten Bitcoin and crypto mining. It needs years and decades of development to attain a supercomputer with some remote chance of cracking Bitcoin.
Interestingly, Bitcoin’s technology, the SHA256, can also evolve into a more robust algorithm, probably SHA512.
Buterin’s comments on quantum computing vs crypto. Source: Twitter
Vitalik Buterin, famous as the CEO and Co-founder of Ethereum, highlighted that if, at some point, quantum computers can break a cryptographic algorithm, another more robust and unbreakable algorithm can be adopted.
Some blockchains, including Ethereum, have tested out quantum resistance mechanisms to avoid any apocalyptic event.
Indeed, the emergence and growth of quantum computers threaten crypto mining. Only these machines can run programs that could destroy mining algorithms and even mess with Bitcoin’s encryption system. However, it is equally valid that the threat has been overestimated.
The world is far from launching any quantum computer with enough bits to destroy crypto. Moreover, Bitcoin and other blockchains could quickly adopt more advanced algorithms if quantum computers become a threat. Furthermore, already some blockchains are implementing quantum-resistant systems