Bitcoin: New Quantum Computer Could Crack BTC Algorithm By 2023

Fujitsu and the Riken Research Institute are expected to launch a quantum computer in 2023 together with Japanese multinational technology companies. This is theoretically capable of cracking the Bitcoin encryption algorithm. So do quantum computers herald the end of crypto?

Fujitsu’s quantum computer is said to be significantly more powerful than the Frontier built by Hewlett-Packard (the world’s fastest supercomputer to date). Initially, the Japanese model will be used for economic forecasting and the development of new drugs.

For the development, Fujitsu uses so-called superconducting materials, which no longer exhibit any electrical resistance when cooled to a temperature close to “absolute zero”. Vivek Mahajan, CEO of Fujitsu stated in an interview with CNBC on October 14, 2022:

“Quantum computing has the potential to change the world enormously. It can solve problems in molecular dynamics, finance and healthcare.”

According to Mahajan, quantum computers may be able to solve mathematical optimization problems such as Shor’s algorithm or the so-called traveling salesman problem. The Shor algorithm uses methods from quantum computer science to calculate prime factors, which, among other things, play a large role in encryption.

The Traveling Salesman Problem, on the other hand, is about finding the shortest route by visiting every city connected by a local road network and then returning to the starting point. Other problems considered too demanding even for supercomputers can reportedly be solved with the new quantum computer.

Other tech companies like Google are already making significant progress in developing their own quantum computers. However, Google does not see commercialization potential for its own model before 2029.

Fujitsu’s quantum computer may well turn out to be the market leader. Furthermore, Fujitsu’s quantum computer scores with 64 “qubits”, while Google’s quantum computer only has 53 qubits of processing power.

Why are quantum computers a threat to Bitcoin?

P2P exchange LocalBitcoins and the authors of a 2022 University of Sussex paper have already warned that quantum computers could crack the SHA256 algorithm used in the Bitcoin network.

In a proof-of-work blockchain system like Bitcoin, miners compete to find a numerical solution to an algorithm like the SHA256 algorithm. The parameter called Difficulty determines the difficulty of guessing such solutions. Miners perform hashing operations on the header of a bitcoin transaction block to find the randomly generated number. They then get a numerical solution using the SHA256 algorithm.

A miner often guesses the correct solution after performing quadrillion “hashing” operations per second.

The computer of choice for bitcoin mining is currently an application-specific integrated circuit (ASIC). The mathematical difficulty of finding a solution helps secure the Bitcoin network. Since a quantum computer can perform many more calculations than a conventional computer, this threatens the security of the bitcoin network, which until now as almost bulletproof is valid.

However, quantum computers still have trouble performing long calculations. However, recent research by companies such as IBM and Thale into post-quantum cryptography has begun to paint a clearer picture of a post-quantum future. The US National Institute of Standards and Technology is currently at the forefront of research into potentially quantum-resistant cryptographic algorithms.

Ideas for cryptographic defenses against quantum technology have been around since at least 2019, when Google first published results on its machine.

Ethereum co-founder Vitalik Buterin was unfazed by the potential threat to cryptocurrency security posed by quantum computers. He compared the development of quantum computers to the development of nuclear energy. Finally, years after the development of the first hydrogen bomb, nuclear energy did not become an integral part of our daily life either. Buterin made a similar prediction for quantum computers.

Furthermore, according to Buterin, the power of quantum computers must also be harnessed carefully before it can actually have the potential to change reality. In addition, the crypto community is already working on new, quantum computing-proof algorithms:

“But for every cryptographic algorithm that quantum computers can break, we know we have a replacement (…) that quantum computers can’t break.”

Vitalik Buterin

In 2019, a researcher from the Ethereum Foundation already presented the first ideas to increase the quantum resilience of the Ethereum blockchain. Other crypto projects are also already developing new quantum-safe cryptocurrencies and blockchains such as the Quantum Resistance Ledger.

Existing solutions include the so-called directed acyclic graph technology from IOTA developers and the quantum key distribution technology from JPMorgan. So if a quantum computer that can crack Bitcoin actually appears, it doesn’t necessarily mean the end of crypto.

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