Home Bitcoin News Bitcoin Report: The Impact of Quantum Computers on Bitcoins

Report: The Impact of Quantum Computers on Bitcoins

The Impact of Quantum Computers on Bitcoins
  • Google has acheived quantum supremacy this year and it poses a potential threat to bitcoin.
  • Deloitte in it’s latest report warns about google’s quantum supremacy  and risk to bitcoin’s blockchain.

Since Google claimed quantum supremacy later this year, the impact of quantum computers on bitcoins and the blockchain network has much speculated. Deloitte in it’s latest reports Quantum computers can break the mathematical difficulty underlying cryptography and can thus put the bitcoin operations under risk. Let us look into how this pans out.

 The secret private key used to create a digital signature that can be verified using the public key and secured through the mathematical principle called “one-way function.”

Under this principle, the public key can be derived from the private key, but the other way around requires an astronomical amount of time and is hence not practical. But, in 1994, mathematician Peter Shor published a quantum algorithm that can break this security feature with a sufficiently large quantum computer.

Bitcoin is a decentralized system of transferring value where a digital signature is generated by the user to authorize transactions. But if someone with a public key could falsify this signature, they could potentially spend anyone’s bitcoins. The bitcoin network runs on the decision of miners who form chains of bitcoin blocks.

The simple person-to-person payments using bitcoins classified into two categories. The ‘pay to public key’ (p2pk) was used in the earlier days and had drawbacks such as long addresses, considerable processing time, etc. But the major problem with this address type is that anyone can obtain the public key, which can, in turn, used to derive the private key using quantum computers. Thus, all transactions under this address type are under risk.

The second type is where the address is composed of a hash that does not directly reveal the public key and implemented through the ‘pay to public key hash’ (p2pkh). Here, the public key is not visible until the user initiates the transaction, which means that as long as addresses are not reused, the private key is safe. But addresses are often reused, putting such transactions under risk.

Data suggests that almost 4 million bitcoins worth 40 billion USD are currently under risk. That is 25% of the total bitcoins available. One way to secure these will be to reach a common consensus within the community not to use p2pk addresses and move all vulnerable coins from p2pkh addresses to safe, unused addresses. It is difficult because of the sensitivity of the issue and many users have forgotten their private key.

Even if we assume that this is done, in non-reused p2pkh transactions as well, there is the window of opportunity to steal coins between the time the transaction initiated and it is completed (10 minutes) when the public key is available. Currently, it takes 8 hours for a quantum computer to derive the private key, but with technological progress, nothing is out of danger.

deloitte
Image Source: Deloitte

 As quoted in Deloitte’s latest report on the quantum computing and the bitcoin blockchain.

Download our App for getting faster updates at your fingertips.

en badge web generic.b07819ff

Steve Anderrson
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain. Join the official channel of thecoinrepublic, For the latest news updates: https://t.me/thecoinrepublic

We Recommend

Top Rated Trading Platforms

Top Rated Cryptocurrency Exchange

Partners

Must Read

XRP jumps around 30% in 24 hours

The price of XRP jumped around 30% in the last 24 hours, at $0.4XRP surpassing the major cryptocurrencies over the week in...

Paradox Group launches new Crypto marketplace

Many blockchains and digital asset companies find it hard to advertise effectively. Not only have these companies been barred from mainstream advertising...

Digital change is essential however we don’t uphold private cryptocurrencies- German Finance Minister

Germany's Finance Minister Olaf Scholz has referenced secretly given cryptocurrencies resources.The European Union (EU), including Germany, is quickening innovative work on the...

Utilizing blockchain to screen the COVID-19 vaccine supply chain

Blockchain offers a changeless, decentralized information base that can enable all gatherings to ensure that antibody supplies are being put away and...

Leaked Citibank details Reveals Bitcoin Could Rocket To $300,000 Price By End Of 2021

Bitcoin has detonated in the most recent couple of weeks, adding to increases through 2020 that is seen more than twofold in...

Airbnb plays blockchain popular expression bingo in $ 1B IPO documenting with SEC

Crypto firms are genuinely attempting to restore the gravely hit travel area utilizing conveyed record innovation. The record rolls out an elite of...

Related News

Utilizing blockchain to screen the COVID-19 vaccine supply chain

Blockchain offers a changeless, decentralized information base that can enable all gatherings to ensure that antibody supplies are being put away and...

Billionaire Boss of World’s Largest Hedge Fund Warns Bitcoin Will Be ‘Banned’

The bitcoin cost has taken off as its standing as a possible fence against swelling has developed.  Bitcoin has somewhat broken out of...

Is Bitcoin Heading for New All-time High in 2020?

Bitcoin price trading above the price levels of January 2018, after breaking multiple resistance over a yearly chartBitcoin Dominance is currently at...

3.5 Billion Yen Bitcoin Seized by Dutch Police

Dutch Police have seized 2,500 Bitcoin, which is about 3.5 billion Yen involved in money launderingTwo men and women have been arrested...

UNI Slipping Continuously Making New Lows

UNI stands at $2.38 making new lows of $2.29 over the monthly chart resulting in the formation of a falling channel pattern The...