Breaking Bitcoin With a Quantum Computer






Breaking Bitcoin With a Quantum Computer


January 6th, 2018

Disclosure: I am long Quantum Resistant Ledger (QRL). Nothing that appears on Cryptogon should be considered a recommendation to buy, sell or hold any financial instrument.

For commentary on this, I’m going to share excerpts from an email that I wrote to friends of mine back in November:

Hi, ***

*** asked me to let her know if I spotted anything interesting in the cryptocoin space.

Cryptocoins could be doomed when quantum computers become a reality. Seeing this piece about it drove the point home:

https://www.technologyreview.com/s/609408/quantum-computers-pose-imminent-threat-to-bitcoin-security

I started looking to see if anyone was working on a quantum resistant cryptocoin.

There is one. It’s called The Quantum Resistant Ledger (QRL).

https://theqrl.org

It has not fully launched yet, but trades in token form on a cryptocoin exchange called Bittrex. When it launches, the QRL tokens will be redeemed for the actual QRL cryptocoins.

QRL tokens can be bought with Bitcoin and sold for Bitcoin on Bittrex in real time. Despite the fact that this coin is virtually unknown, there is decent liquidity on Bittrex. However, pricing could become extremely volatile with news or a whale investor buying or selling.

I have been warning people on Cryptogon that I believe that NSA already has a general purpose quantum computing capability, which threatens Bitcoin and other cryptocoins.

In the QRL whitepaper, I found the following interesting:

Public quantum computer development has not passed beyond 2^5 qubits or the factorisation of small numbers (15 or 21). However, in August 2015 the NSA deprecated elliptic curve cryptography ostensibly based upon quantum computing concerns. It is unclear how advanced quantum computing may be presently or that any breakthroughs in this field will be publicised to allow cryptographic protocols in common usage in the internet to be made post-quantum secure. With somewhat anti-establishment origins, bitcoin could find itself the earliest target of an adversary with a quantum computer.

If a significant quantum computing advance were to occur publicly, node developers could implement quantum-resistant cryptographic signature schemes into bitcoin and encourage all users to move their balances from ECDSA-based addresses to new quantum-safe addresses. To mitigate the proportion of effected addresses it would be reasonable to disable public key recycling at the protocol level. Such a planned upgrade would also result in the possible movement of the 1 million coins belonging to Satoshi Nakamoto – with associated price volatility.

A less favourable scenario would be a silent non-linear quantum computing advance followed by a nuanced quantum computing attack on bitcoin addresses with exposed public keys. Such thefts could have a devastating effect upon the bitcoin exchange price due to new heavy sell pressure and a complete loss of confidence in the system as the scale of thefts become known. The role of bitcoin as a store of value (‘digital gold’) would be very badly damaged with extreme consequences for the world. In this context the authors believe it is reasonable to experiment with quantum-resistant cryptographic signatures in a cryptocurrency ledger and potentially create a backup value store in the event of a black swan.

“It is unclear how advanced quantum computing may be presently or that any breakthroughs in this field will be publicised to allow cryptographic protocols in common usage in the internet to be made post-quantum secure. ”

Well, it’s one thing for me to say it on my lunatic fringe conspiracy blog, but I’m clearly not the only one who suspects a covert quantum computing capability could emerge, or has emerged already. As of 2015, NSA stopped trusting the type of encryption that Bitcoin uses…

Hmm.

In that last paragraph in the excerpt above, they’re laying out a scenario in which intelligence agencies can quietly steal money out of cryptocoin wallets from the public addresses alone! haha Ye olde covert bail in!

If you guys want to acquire any QRL, please keep in mind, this is maximum risk. It might not work, it could go to zero, maybe other coins can manage to implement quantum resistant measures…. Who knows…

However, to summarize:

1) Quantum computers are coming, or are already operational by NSA and possibly other intelligence agencies.

2) Quantum computers threaten all Bitcoin-type cryptocoins.

3) QRL is the only cryptocoin purpose built to resist attacks from attackers with quantum computers.

4) People are holding tens of billions of dollars in Bitcoin and other cryptocoins. If a tiny fraction of those people become paranoid about the the quantum threat, it would be an understatement to say that QRL could become very interesting very fast.

Since I wrote that, other coins are mentioning adding quantum resistant capabilities, but I would take those claims with a grain of salt.

I had been planning to do more extensive research on QRL and their team and present that as a Cryptogon post, but events are moving faster than I anticipated, so this will have to do.

Via: Fortune:

Alex Beath, a Toronto-based physicist and pension fund analyst, is skeptical about Bitcoin but sees one useful purpose for the crypto-currency: It may detect when someone creates a working quantum computer.

“The second someone creates a viable quantum computer, the NP-complete math problems at the heart of Bitcoin mining tech become instantly solvable,� Beath notes. “In other words, one answer to the question ‘what’s the first thing you’d do with a quantum computer?’ is ‘mine all of the remaining Bitcoin instantly.’ Until that happens, nobody has a quantum computer.�

Beath’s off-the-cuff observation, which he made in response to a Fortune query about the security of bitcoin, is amusing. But it also underscores a serious problem: Namely, a new era of computing is fast-approaching and when it arrives, the system that gave rise to many crypto-currency fortunes will collapse.

This threat to Bitcoin and other software systems that use the same underlying encryption technique—a technique likely to crumble in the face of a quantum-based attack—is not new. Indeed, it was predicted decades ago, and Ethereum founder (and former journalist) Vitalik Buterin wrote about how to defend it in 2013.

The difference today, though, is that companies like Microsoft, Google and IBM are making rapid breakthroughs that could make quantum computing viable in less than 10 years.















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One Response to “Breaking Bitcoin With a Quantum Computer”

  1. SanityClaus says:

    Hey, give me your money for this computer virus I invented called “Bit-Coin”. It costs me nothing. You already work for fake money the pentagon prints out of thin air because you will believe anything. Now you can pretend that a credit card account is
    an “encrypted monetary unit” that they created out of thin air.
    SLAVE. Silver is money.
    Don’t you forget it.

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