Cryptocurrencies and Quantum Computing: An Imminent Threat? | Thoughts on Inside Quantum Technology

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So I recently was a moderator at the Inside Quantum Technology panel in New York on Quantum Computing and cryptocurrencies. Now, I’ve talked a lot about quantum attacks on bitcoin, quantum safety of other cryptocurrencies, so I was really excited to be invited to this panel.

0:00 Inside Quantum Technology
0:45 Why is crypto insecure against quantum?
2:08 GroupIncome.Org job
4:27 When should we worry about quantum computing?
7:03 Post Quantum Cryptography
8:45 Would you keep cryptocurrencies?
10:40 How should crypto custodians prepare?
11:53 Quantum over-hyping

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Now first, let’s summarize. The big thing that we are concerned about is the fact that public keys are exposed when a transaction is made, not the mining side. This is currently just fine because classical computers would take longer than the age of the universe to break elliptic curve cryptography, and the private key, which the public key is derived from, is secret. The problem is that quantum computers, using Shor’s Algorithm, can undo this derivation and get the private key, and then the bad actor can use that key to authorize transactions.

So when should we worry about quantum? That was a big question I wanted the panel to answer. I have my own opinions, as you know. I think it’s going to be a while, at least a decade, and from what I’ve seen scientists in quantum seem to generally agree.

Honestly, I was surprised by these responses. Personally, knowing the state of the commercial quantum computing industry and academic research, I’m not that worried right now, but keeping an eye, you all have seen my crypto portfolio on my other videos..

Now, we have to distinguish between the “commercial” state and the “real state”, and also found that to be interesting, because this is something I get asked a lot. A lot of people ask, what if the government already has a large quantum computer? It’s true - some technologies have been developed by the government and the government has been ahead. The internet, a lot of the foundation of it, was funded and created by DARPA, a government agency. ARPANet was the first wide area network, an intranet, and a lot of the technology set up the web as it is today.

It’s not impossible for the US government, or another country, to be further ahead than we think.

And I do agree with the panelists here, that a government, if they get to a point if they can break encryption, has absolutely no incentive to reveal that they have a quantum computer capable of this. The best thing to do is to silently spy on people. Therefore, the panelists' thoughts here were that the canary in the coal mine is already dead, and we should move on to post-quantum cryptocurrencies.

They also flagged the security of the exchanges and custodians themselves, and their call to action here was to do your own research - look into the security, understand the technology, and look at the types of insurance these custodians have. Most might be surprised how little is covered here or how small the security teams are.

Now, do these people who are very connected to the security side, who have worked in government agencies, cryptography, what are they doing with their own portfolio. Now there was a range of answers.

What I got from this panel (not explicitly, so this is my own take on what they said), that cryptocurrencies, NFTs, and more will be around - digital currency is not going anywhere - however, they are skeptical that even now this is safe. I slightly disagree here, and maybe I’m naive - I don’t think quantum is the biggest risk factor right now, though I don’t think they implied that at all. Andersen Cheng in specific talked about how insecure the platforms themselves are and have absolutely no insurance. Your bank account, for example, is FDIC insured, up to a certain amount, and crypto exchanges don’t have that same protection.

Now that was a lot of doom and gloom, but what can a crypto custodian do?

Now, even if we assume that elliptic curve encryption may be fine, or that Shor’s algorithm is still a while away, we do need to think about end to end security of all points - there’s authentication layers we may need to consider.

Cryptocurrency is still a bit of a wild west here.

However, these crypto custodians should be ready for an upgrade. It takes a long time to upgrade systems, even if the NIST recommendations come out in the next couple of years as promised.

So, having a path to upgrade for a crypto custodian on all points - not just the ledger itself - is critical.

#quantumcomputing #cryptocurrency #postquantum
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