Traditionally, let’s start by explaining the situation. Cryptocurrencies use a public key cryptographic system. It is an encryption system that uses a pair of public and private keys. The public key is your address on the blockchain, which is used to receive assets. It is also needed to encrypt messages in the blockchain and to verify electronic signatures.


As a reminder, transactions in the Bitcoin blockchain and other cryptocurrencies are essentially messages from address holders indicating their desire to transfer a certain amount of funds to another address. In this case, the public key is needed to encrypt the message and indicate exactly where the asset owner wants to send it.


A private key, on the other hand, allows the individual to be considered the full owner of their assets because it gives them access to the contents of the address and the ability to manage the contents of that address. A private key is needed to sign messages – that is, to provide proof that it is the full owner of the cryptocurrency who has chosen to conduct the transaction. In the context of a public-key cryptosystem, a private key is needed to generate an electronic signature and to decrypt messages.

Keys

It is important to note that an asymmetric encryption system involves a mathematical connection between a private key pair and a public key pair. In other words, they are related, but it is impossible to derive the private key from the public key. That is why users can safely share their public keys without fear of losing money.

However, quantum computers could change this situation because of their abundance of power. That is, their potential, in theory, could be enough to extract a private key from a public key – and that would render Bitcoin and other cryptocurrency networks useless. Still, the coins in such a case could be possessed by the operator of such a device without any restrictions. The specifics of the situation are outlined below.

How secure is Bitcoin?

Bitcoin’s encryption technology is so strong that attackers need to control 51 percent of the combined processing power of all the cryptocurrency’s miners in order to compromise it. This requirement is also true for other blockchains.

Each transaction in the blockchain is assigned a cryptographic key, a random sequence of letters and numbers that is vulnerable during the search period for a new block. In the case of Bitcoin, it is about 10 minutes. This is the amount of time an attacker has to act on a transaction's hash before it can be added to the blockchain.

With enough computing power in the form of the same quantum computer, this key can be cracked. According to Decrypt, if an attacker has a ten-minute window to crack a key, they would need a quantum computer with 1.9 billion qubits. That is enough power to make Bitcoin insecure right now.


A little explanation. Conventional computers use 0/1 bits for computation. Quantum computers, on the other hand, use qubits that can take on both values simultaneously. This feature greatly improves both the performance of such devices and the speed of computation.


Quantum computer from IBM

Given that the largest superconducting quantum computer on the market is IBM’s 127-qubit model, it doesn’t appear that quantum computers pose much of a threat to security and cryptography. That said, Moore’s law states that the number of transistors in a microchip doubles every two years and the cost of computers halves.

In other words, computers become more powerful and cheaper over time. In the world of quantum computing, this rule has been replaced by Neven’s law, which prescribes that the power of quantum computing undergoes a “double exponential growth compared to conventional computing”.

Quantum computer

Webber is confident that with the speed of technological development, it won’t be possible to sabotage Bitcoin’s encryption until a decade from now. Consequently, cryptocurrency investors need not worry about anything anytime soon.


In addition, we think there will be no harm even as quantum computers evolve. Still, cryptocurrency developers are unlikely to sit idly by while blockchain is threatened. More likely, they will figure out a way to make the cryptocurrency network algorithm more complex, change it, or simply shorten the block creation time, which would require more processing power from computing devices to theoretically crack it.

And although the Bitcoin network is decentralised and there are a lot of blockchain users, if there is a threat, they will be able to band together and get out of the situation. The proof of this is a massive network update called Taproot, which was activated in November 2021. At the time, a majority of the network voted to implement the update, and the process went quickly enough. So the blockchain community will come up with something here, too.