Why quantum computers pose a threat to Bitcoin's security
Bitcoin, the world's largest cryptocurrency, is at a risk from the new frontier of quantum computing. The technology could theoretically allow hackers to break the encryption protecting Bitcoin and cause its value to plummet. The threat stems from the fact that quantum computers could break into secure digital wallets and steal coins.
Quantum computing: A double-edged sword
Though still in its infancy, quantum computing has recently piqued interest after Google announced a breakthrough with its new Willow quantum-computing chip, which exponentially reduce errors. Unlike conventional computers that represent data in binary (zeros or ones), quantum computers represent data using "qubits." These qubits can exist in a continuum of states that are mixtures of zeros and ones, allowing quantum computers to perform tasks at an unprecedented speed.
Quantum computing's potential impact on encryption
Now, here's the catch: Quantum computing could easily crack the encryption that protects sensitive data, including that of Bitcoin. This is because of an algorithm developed by a US mathematician in 1994, which enables factoring large numbers in minutes with a powerful enough quantum computer. The threat goes beyond Bitcoin as many online banking systems use variants of public-key cryptography, making them potential targets for quantum hackers.
Bitcoin's vulnerability and the need for security upgrades
Bitcoin could be a particularly attractive target for quantum hackers because of its lack of regulatory protection. Skip Sanzeri, co-founder of QuSecure, warns that "Bitcoin is going to get targeted like crazy." He adds that while banks have some regulation and defense mechanisms in place, Bitcoin operates like the Wild West with no reimbursement guarantees if coins are stolen.
Quantum computing could undermine confidence in Bitcoin
Notably, a quantum attack on Bitcoin would not just lead to theft but also compromise the trust in the security of the whole Bitcoin network. This is a major concern because some of the early Bitcoin addresses with exposed public keys are especially susceptible to quantum hacking. Galaxy Digital notes that nearly 1.72 million bitcoins—worth over $160 billion—are stored in such addresses.
The future of Bitcoin security in a quantum world
Despite the looming threat, some experts think Bitcoin still has time to fix its vulnerabilities. Emin Gun Sirer, the founder of Avalanche cryptocurrency, says, "There is definitely a quantum apocalypse on the horizon at some point in the future, but that point is a sufficiently long time away that there is no need for panic." However, securing Bitcoin against quantum attacks could take years due to its decentralized nature and the need for global consensus on any technological changes.
