Bitcoin security may be vulnerable to new quantum computers in 2023

Fujitsu and Riken Research Institute, Japanese multinational technology companies are jointly expected to launch a potential Bitcoin-banking quantum computer for companies in 2023.

The computer, which is significantly more powerful than the Frontier, the world’s fastest supercomputer built by Hewlett-Packard, is initially expected to be used for economic forecasting and the development of new medicines.

Fujitsu’s new computer will use so-called superconducting materials that exhibit zero electrical resistance when cooled to near a temperature known as “absolute zero.”

“Quantum computing has the potential to change the world on an enormous level. You can solve problems in molecular dynamics, in finance, in medicine,” Fujitsu CEO Vivek Mahajan said in an interview with CNBC on October 14, 2022.

According to Mahajan, quantum computers can potentially solve mathematical optimization problems such as Shor’s algorithm or the so-called traveling salesman problem. It can solve other problems considered too difficult for even supercomputers. Shor’s algorithm uses quantum technology to guess the most important factors for technology. While the traveling salesman problem tries to find the shortest route that can be taken to visit each city connected by a local highway system and then return to the starting point.

While companies like Google have made significant progress in developing their own supercomputer, it only sees the commercialization potential of its machine in 2029, which could give Fujitsu a head start.

Fujitsu’s computer has 64 “qubits”, the basic unit of information in a quantum computer, compared to Google’s 53.

Fujitsu heads up Bitcoin’s quantum threat

P2P exchange LocalBitcoins, as well as a 2022 academic paper from Sussex University have warned that quantum computers could break the SHA256 algorithm used in the Bitcoin network.

Miners in a proof-of-work blockchain system like Bitcoin compete to find a numerical solution to the SHA256 algorithm that beats a network measure known as the difficulty. Miners perform so-called hashing operations on the header of a Bitcoin transaction block and a random number. By using the SHA256 algorithm to get a numerical solution that follows a certain pattern. The miner often only guesses the correct solution after performing quadrillion “hashing” operations per second. For Bitcoin mining, the computer of choice for the hashing process is an Application Specific Integrated Circuit (ASIC). The mathematical difficulty of finding the solution helps to secure the Bitcoin network, and without it, the network’s security, which until now has been fairly bulletproof, could be breached.

But quantum computers still struggle to perform long calculations, and recent research into post-quantum cryptography by companies like IBM and Thale is slowly painting a clearer picture of a post-quantum future. The US National Institute of Standards and Technology is leading the way in research into potentially quantum-resistant cryptographic algorithms.

Ideas to combat quantum technology have been proposed since at least 2019 when Google first published results surrounding its machine.

Ethereum co-founder Vitalik Buterin at the time seemed unfazed by the potential threat to crypto. He believed that, similar to how the hydrogen bomb was developed, using nuclear power in everyday applications seems elusive. Quantum computing power must be harnessed carefully for it to be transformative. He also believed that the cryptocurrency community will develop new algorithms.

“But for every cryptographic algorithm that quantum computers can break, we know we have a replacement […] that quantum computers cannot break.”

In 2019, a researcher at the Ethereum Foundation presented ideas about quantum resistance that could be applied to the Ethereum blockchain. Others are building new cryptocurrencies and blockchains like the Quantum Resistance Ledger.

Existing solutions include efforts by IOTA developers to introduce so-called directed acyclic graph technology, and JPMorgan’s quantum key distribution technology.

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