• TennHedge

Is Quantum Computing a Threat to Bitcoin?

One of the most common criticisms of Bitcoin is that its digital nature makes it potentially vulnerable to software hacks. When discussing attack vectors to the Bitcoin open-source software, most of the time we are talking about the SHA-256 algorithm used for things like mining and address generation. With the desire to not get too technical in this article, for I am no computer scientist and also like to keep my writings short, we won't delve too deep into the background of SHA-256 and how it is implemented in Bitcoin, there are far better sources than I for such information. My purpose at the present time is to talk about a Bitcoin software hack in more general terms (with a primary focus on the quantum attack vector), but we should keep in mind that SHA-256 is unlikely to be broken by conventional computers anytime soon; however, many posit that the nascent quantum computing space will one day be able to do things that are impossible to do on current computing hardware.


I suppose I should briefly describe what quantum computing is, again keeping in mind that I have a very limited understanding of computer science (though I'm working to improve that). Basically, quantum computers have a different hardware configuration than classical computers, using 'qubits' instead of conventional bits. Qubits allow quantum computers to leverage quantum physics to increase the computational ability of a machine far and above that which any classical machine could ever dream of reaching. A calculation that might take a classical computer thousands of years could theoretically be performed on a quantum computer in a matter of minutes. Truly, such a prospect is difficult to grasp, though a quantum future seems distant, and lacks certainty as well.


So, is quantum computing really a threat to Bitcoin?


Assuming that quantum will become a grave threat to Bitcoin is a pessimist's view, as it assumes that security protocols will not keep pace with the threat. It is an assumption that quantum computing moves forward, while everything else stays the exact same. Bitcoin skeptics make the erroneous assumption that the network will not adapt to new threat vectors. This is an opportune time to quote Satoshi Nakamoto:


"SHA-256 is very strong. It's not like the incremental step from MD5 to SHA1. It can last several decades unless there's some massive breakthrough attack.


If SHA-256 became completely broken, I think we could come to some agreement about what the honest block chain was before the trouble started, lock that in and continue from there with a new hash function.


If the hash breakdown came gradually, we could transition to a new hash in an orderly way. The software would be programmed to start using a new hash after a certain block number. Everyone would have to upgrade by that time. The software could save the new hash of all the old blocks to make sure a different block with the same old hash can't be used."


There is ample time to develop quantum-secure algorithms and technology before any quantum computer becomes viable as an attack vector. Satoshi designed the network in such a way to allow it to respond to many attack vectors with varying degrees of sophistication.


A quantum hacker would most likely seek to recover previously lost bitcoins (as opposed to the enormous task of undermining the network), as a quantum computer could brute force old, lost Bitcoin wallets that were still using legacy encryption. It is true that quantum computing could thus lead to an increase in the bitcoin float, as a hacker could access lost/unmoved coins (including Satoshi's sizable coin hoard) in old wallets; however, this is not a fatal blow by any means. Such an event would have some downward pressure on the price, but Bitcoin's supply cap will remain unchanged at 21,000,000, and there will be ample demand to absorb new supply.


Quantum computing as a threat vector to Bitcoin is purely theoretical, and very well could be impossible in practical reality. Everything you have heard or read about quantum computing in terms of Bitcoin is purely theoretical, period. It is a testament to Bitcoin's robust design that it would take a theoretical miracle to launch a semi-viable attack. If you're not buying Bitcoin because you are afraid of what quantum could do 50-100 years from now, that's fine. Many others will participate in Bitcoin on your behalf.


Let's also remember if/when quantum computing becomes a threat to Bitcoin, it also becomes a threat to the digital ecosystem at large. Nuclear missile silos, airports, military computer networks, etc. Quantum computing is not just a Bitcoin issue at that point.


-TH


You should always consider seeking financial advice from a licensed advisor before making decisions with your money, and you should not consider anything I write as financial advice but merely my opinion. Getting your financial house in order is a prerequisite for Bitcoin saving, in my opinion.


Disclosure: nothing in this article should be considered financial advice and I am not a financial advisor. Do your own research as everything in finance carries risk.