It has become quite common to hear about all of the ways that cryptocurrencies and blockchain have the power to solve countless problems for businesses and consumers. They're supposed to erase borders in global trade. They're supposed to bring financial access to the unbanked. Even inventory management blogs are inundated with stories about how the technologies are going to increase efficiency and transparency in global supply chains.
On the whole, the coverage of cryptocurrencies and the blockchain has fawned over how revolutionary they should one day prove to be. I should know – I've written countless stories about them myself.
But what if there was a problem lurking – a race, really – that could threaten all of that potential?
What I'm referring to is the rapid development of quantum computing. It has been the holy grail of computer processing power ever since physicist Paul Benioff first proposed it in the early 1980s. Successful quantum computing designs would trigger another digital revolution, empowering everything from next-generation artificial intelligence to pharmaceutical testing. They would also render today's data encryption algorithms obsolete in an instant.
A Looming Problem
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The reason that's such a big deal should be obvious. It's because cryptocurrencies and the blockchains that support them are little more than complex encryption systems. If quantum computing became a reality, about a quarter of a trillion dollars in crypto-assets would be at risk of theft overnight. The same would hold true for business systems that have moved onto the blockchain – everything from cross-border central bank transfers to the trillion-dollar stock market infrastructure would suddenly be very much at risk. And the day when it happens may not be as far off as many might assume.
Recent Quantum Breakthroughs
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In recent months, the companies and research organizations that have been working on developing quantum computing technology have announced one breakthrough after another. Researchers at the University of Science and Technology of China found a way to improve a technique known as boson sampling, increasing the detection of photons from 5 to 14. Those photons form the basis for many of today's quantum computing projects, and the increase represents a 6.5-billion-fold increase in computing power over the previous technique.
That's not the only big breakthrough that's happened recently. Researchers working for Google announced in October that their quantum computing design had achieved what's known as quantum supremacy. That means their computer can now perform calculations that would take so long on classical computers that they would be essentially impossible (10,000 years of calculation time) within mere minutes.
The Race Begins
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All of these announcements mean that the cryptocurrency and blockchain communities are now in a race against time. With powerful, encryption-shredding machines now on the horizon, they need to find ways to retrofit their software to resist quantum decryption to stay safe. The problem is that work has only just begun on creating such countermeasures. Then, there's the fact that there's a high likelihood that quantum-safe encryption standards are going to necessitate a complete redesign on the computing infrastructure that makes blockchains tick – and there's no telling what the cost and complexity of such an overhaul would be (or if it's even possible).
The bottom line here is that there's real reason for worry about the speed with which quantum computing is coming along as it relates to cryptocurrencies and blockchain. To be clear – none of the worst issues I've mentioned here are going to happen overnight – but the clock is ticking. Only time will tell who will win this particular race, but considering the number of assets and investments now tied up in blockchain-based systems, I'd wager that a vast array of industry leaders and governments will find a way to get ahead of the quantum threat before it can do any real harm to their systems. We'll see, though.