The threat of quantum computing on blockchain & cryptocurrencies
Blockchain was originally created as a cryptographically secure chain to protect records and transactions from unauthorised changes. With the onset of quantum computing, things are no longer quite as secure.
Since the first blockchain appeared in 2008, this technology has been used in many industries for example; cryptocurrencies, manufacturing, law, education and healthcare, to name just a few. Industries have been implementing blockchains into their own process, so everyone can query historic data and verify it, but importantly no-one can change any of the data – what is also known as an Immutable Ledger.
Since its original applications, blockchain has evolved as a form of data storage and data management for almost every industry. With quantum computing on the horizon, the focus is shifting to security and whether existing blockchain technology is fit for purpose in the long term – particularly with regards payments and banking infrastructures.
Until recently, blockchains have been suitably secure, outside of human error, where current computing technology cannot break cryptography used on industry standard blockchains.
Blockchain uses a one-way cryptographic function, which means that it’s easy to obtain the output from a function with one (or more) entries, but it’s hard for normal hardware, or even a supercomputer, to obtain the one (or more) inputs (same or others) that will obtain the same output.
Blockchain uses one-way functions for almost everything with the most important one being private key, user signed transactions, which are then verified with the user public key.
So, let’s say Bobby has a wallet with $10 and he wants to pay Alice $2. In the real world, Bobby will take out $2 dollars from his wallet and give it to Alice. This type of transaction is simple and easy to carry out because he holds physical money in his wallet. If someone steals Bobby’s wallet, he/she will be able to use the money without any problem.
In the digital world, you no longer have any physical money in a wallet. Virtual money is instead recorded on the blockchain, a from of ledger, much like a bookkeeper but recorded by multiple parties.
Bobby’s money is secured with his Private Key, a unique identifier for this individual wallet. The private key makes up what is known as a Key Pair; A Public and Private key. The private key is used to sign transactions, where Bobby says he’s sending 2 coins, such as TEM, to Alice and the public key is then used to verify that the transaction was actually created by Bobby (the wallet’s owner) and not someone that’s trying to impersonate him.
In the world of cryptocurrency wallets, the private key is vital for the secure storing and use of funds. Keeping the private key private, ensures the integrity of a wallet, whereas a private key falling into the hands of a malicious party, compromises this security.
In theory, a private key can be generated from the public key, which is accessible by, and visible to anyone, via a cryptocurrency explorer. But in practice, todays hardware is simply not capable of reversing the cryptography of public keys, much to the relief of those who own crypto.
Unfortunately what are considered powerful computers today are very different to the computer of tomorrow, namely quantum computers, more powerful than anything that’s been seen before in the history of computing. And IBM have a commercial one, now (2019).
Quantum computers  are significantly more powerful machines than today’s biggest supercomputers, it’s a paradigm shift for the computing industry. They make use of quantum mechanical phenomena to perform computations, at unfathomable speeds, but speeds that can solve encryption algorithms of today's leading cryptocurrencies?
"So far as we know, quantum computers seem to be theoretically possible, and building them is just a matter of very hard engineering," says Matthew Green, associate professor of computer science at the Johns Hopkins Information Security Institute. "We know that if an appropriate quantum computer can be built, it could run Shor's algorithm and other variants that would break most public-key encryption we use today. Grover's algorithm can also generically break some symmetric encryption, but only if it uses relatively short keys. We can address that by using larger keys."
temtum founder and leading cryptographer Richard Dennis agrees with Matthew Green’s position on the future of quantum computing and it’s threat to current algorithms, although considers longer keys a flawed approach to counteract such a threat.
Richard Dennis, “DES, an encryption algorithm, designed for, and used by banks, was not suitable secure and was even considered weak. To counter this, the key size was doubled to increase security by up to 56 bits. In reality, the increase was just 1 bit, which does pose a problem to Matthew’s theory.”
Current computers can solve a problem with a combination between 10 items but as the number of items grows, this hardware will struggle to solve it, so more computational power will therefore be needed. Quantum computers are so powerful that they’re even used for molecular movements in particular environments.
Quantum computers are different from classic computers, because of two fundamental quantum effects:
Conventional desktop computers work everything down to two states also known as bits, which have become famous as 0’s and 1’s; basically pulses (electrical or optical) representing 0’s (False) and 1’s (True). So, we end up with a combination sequence of 0’s and 1’s that make up the primary output from the computer, ie what a user sees and engages with.
True = 1 False = 2
With the future of computing, quantum computers go further than that, with subatomic particles called Qubits. They have a property where states can exist in what is superpositions of 0’s and 1’s, so you can have much wider states based on the superpositions of them, which means a Qubit can represent a dual combination of 1 and 0 at the same time, depending on the number (N) of qubits.
For example: if 1 Qubit has a superposition of two states, then 2 Qubits can have a superposition of four states and 3 Qubits can have a superposition of eight states and so on.
Qubits can be ‘entangled’ to each other, independently of the distance between them, this means that if one Qubit is measured, it can be predicted what will happen when you measure the second one.
These two quantum effects combined to make a huge difference on how next generation computers solve problems. It makes quantum computers great at optimising mathematical problems, where it can solve them in much less time than computers currently can, making quantum computing a very real threat to blockchain security.
Natalie Fratto, from SVB Financial Group, makes an interesting analogy about how fast quantum computers will be. She compares the way a path algorithm works by testing each possible path to go from point A to point B, each time just randomly trying routes until eventually arriving at the desired destination. This type of navigation algorithm will take a lot of time to find a path that goes from point A to point B.
That’s essentially how most cyberattacks work, hackers try different ways to crack a password or get access to a computer until it finally finds a route. Some attacks require many conventionally powered computers, with a lot of processing power. In both scenarios, it will take time to do it. Days, months, or even years making us call it ‘highly improbable’ to solve it.
Fratto expands on this analogy to suggest that access to a quantum computer would be like using a helicopter to have a better view, from the most suitable perspective, of all routes that lead from point A to point B.
Ultimately this means that quantum computing will soon be able to easily calculate the one-way function used within Blockchain, making the chances of calculating a private key from a public key ‘possible’ rather than ‘highly improbable’ as it is now. This will mean that cracking a digital signature and impersonating a wallet user to make transactions could happen via a quantum computer.
There are at least 15 companies and research labs researching, developing and implementing this new technology including Google, IBM, Microsoft, Hewlett Packard, Toshiba, D-Wave, Intel, and others. For example, IBM, Google and D-Wave have already published a testing ground so anyone can experiment with quantum computing for free.
D-Wave : https://www.dwavesys.com/take-leap
The National Security Agency(NSA)  put out a warning on the real threat of quantum computing solving all ‘classical’ encryption algorithms, such is its code breaking abilities.
Of course threats to Blockchain technology are of great concern, particularly for the future of digital currencies if they’re to disrupt existing finance, but are the risks high enough to kill of cryptocurrencies entirely?
With existing networks, possibly. Although second layers are already being added to existing technologies, making them faster and more secure, these are sticking plasters on underlying platforms that are not fit for purpose.
temtum is built on the Temporal Blockchain, a quantum secure platform and the only network that integrates the US government backed NIST beacon as part of the temtum consensus algorithm. A genuine quantum source of randomness created by light photons, the NIST beacon also updates every 60 seconds, generating a new 512 bit key, providing a completely unpredictable value with an incredibly short time frame with which to attempt predicting the next value.
temtum is therefore securely future proofed, alongside it’s exceptional speeds, scalability and environmentally friendly resource consumption, as a genuine form of payment and store of value.
We invite you to join us on our exciting journey to the future of finance. We have outlined all this and more in our white paper, which you can view here. We’d be delighted to hear from you to ask questions and learn more about temtum.
 https://www.technologyreview.com/s/612844/what-is-quantum-computing/  https://www.theregister.co.uk/2019/03/14/quantum_encryption_debunking/  https://quantumexperience.ng.bluemix.net/qx/community/question?questionId=5ae975690f020500399ed39e&channel=videos  http://fortune.com/2018/01/31/commentary-this-new-technology-will-crack-the-blockchain-like-an-egg/  https://www.predictiveanalyticstoday.com/what-is-quantum-computing/  https://futurism.com/nsa-warns-dangers-quantum-computing