The advent of quantum computing, once considered a work of science fiction, may become a reality sooner than expected. In a report published on January 11, 2024, the World Economic Forum identified quantum computing as an emerging threat to the existing technology landscape. While experts agree that it will still take some time to fully develop quantum computing, research in the field is actively progressing.
Both the public and private sectors are heavily involved in quantum computing projects. All G7 countries are actively engaged in quantum computing initiatives, while seven of the top 10 tech companies are either competing for market dominance or involved in some capacity, according to Quantum Resistant Ledger.
The potential threat posed by quantum computing to contemporary cryptography systems, such as those safeguarding cryptocurrencies, is a growing concern. According to a report from Reuters in December 2023, Tilo Kunz, executive vice president of cybersecurity firm Quantum Defen5e (QD5), warned that Q-day, the day quantum computing can break current security standards, could occur as early as 2025.
Major financial organizations have already taken notice of this threat. In June 2023, the Bank for International Settlements launched “Project Leap” in collaboration with the Bank of France and Deutsche Bundesbank to develop quantum-proof payment systems.
With these ominous forecasts and central banks striving to protect payment systems, the blockchain and crypto industry must prepare for Q-day. The question remains: is anyone prepared?
Renowned computer scientist David Chaum, founder of the post-quantum resistant blockchain XX Network, explained to Cointelegraph how quantum computing could “vaporize” a blockchain. One of the primary concerns is the compromise of the SHA-256 algorithm, which serves as the primary defense mechanism for securing access to blockchain-based assets. Quantum computers could easily crack private keys, leaving funds vulnerable to theft.
Vitalik Buterin, co-founder of the Ethereum network, has proposed a solution to address the quantum challenge faced by blockchain. On March 9, 2024, Buterin introduced the idea of a hard fork, sparking a debate on how to prepare the blockchain for a quantum emergency.
According to Buterin, quantum computers could crack an Ethereum account and reveal the private key using only the public key. However, Ethereum accounts that have never completed a transaction and have not exposed their public key would remain safe from a quantum attack. Buterin believes that the technology to make Ethereum immune to a quantum attack could be developed quickly.
Buterin’s proposed solution is based on proving ownership of crypto assets or a wallet by applying a backup key as a fallback. This concept was introduced in 2021 by cryptographers Chaum, Mario Larangeira, Mario Yaksetig, and William Carter in their paper “W-OTS(+) up my Sleeve! A Hidden Secure Fallback for Cryptocurrency Wallets.” In the event of a secret key leak, the backup key would generate proof of ownership and recover funds in an updated quantum-resistant blockchain through a hard fork.
If a quantum emergency arises, users would download new wallet software and prove their ownership with the fallback. Buterin estimates that only a few users would lose their funds in this process. The hypothetical hard fork would roll back the Ethereum network to the block where the large-scale theft occurred.
Implementing Buterin’s solution may introduce some turbulence for Ethereum users, according to Chaum. If Ethereum fails to implement a quantum resistance mechanism before a quantum attack, the emergency solution proposed by Buterin would require the chain to be reconstituted. This would involve building a new chain with quantum-resistant measures and moving assets to a new wallet in the new chain. The Ethereum blockchain would need to be paused during this process, which could take years.
John Woods, CTO of the Algorand Foundation, believes that Ethereum could go further in adopting quantum-resistant measures. Algorand has already implemented a post-quantum mechanism using “Falcon” signatures, one of the signing algorithms selected for standardization by the National Institute of Standards and Technology. Woods encourages Ethereum to adopt Falcon for interoperability with other distributed ledger technologies and blockchains.
While Ethereum seems to have established an emergency protocol to survive a quantum emergency, there are serious limitations to this solution. The Ethereum developer community should prioritize the development of quantum-resistant measures before Q-day arrives.