• Skip Sanzeri

The Quantum Threat to Cryptocurrency

As the cryptocurrency market continues to expand, it's important to understand that the blockchain networks that support cryptocurrency transactions will be vulnerable to quantum attacks. Quantum computers have several attack vectors to cryptocurrency blockchains, most notably through two quantum algorithms known as Shor’s and Grover’s. Shor’s algorithm allows quantum computers to easily factor large prime numbers, the basis of public key encryption, allowing them to break the encryption and access the contents of the encrypted data. In the early days of cryptocurrency, blockchain networks relied on public keys to serve directly as addresses for transactions. These pay-to-public-key (p2pk) transactions are exactly the type of encryption that Shor’s algorithm is designed to break, meaning that the coins held by any of these p2pk addresses could be accessed and spent by someone with a quantum computer. The more current form of blockchain transaction is known as pay-to-public-key-hash (p2pkh), which utilizes a one-way cryptographic hash function to break the public key into pieces. A quantum computer running Shor’s algorithm would not be able to access the public key directly from the p2pkh and therefore would be prevented from breaking the encryption. However, Grover’s algorithm, which is designed to increase the speed of database searches, could potentially allow quantum attackers to exponentially speed up their search capabilities and find the two inputs that make up the hash value, breaking the encryption. The exponential speed boost from Grover’s algorithm also threatens to undermine proof-of-work transactions. In a proof-of-work transaction, blockchain miners solve for the value of a ‘nonce’ to receive cryptocurrencies. A miner using Grover’s algorithm on a quantum computer would be able to quickly guess the value of the nonce long before a traditional miner ever could, thereby preventing traditional miners from receiving cryptocurrencies. Though quantum computers are still in their infancy and their applications have not been fully tested, it is inevitable that quantum computers will one day reach computing speeds that undermine proof-of-work transactions. The only way to protect blockchain networks and cryptocurrencies from future disruption is to transition these digital networks to post-quantum cryptography.

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