The Basics of Cryptocurrency
Cryptocurrency provides an option to traditional currency. They are stored on a blockchain so complicated it cannot be cracked by current computer technology. The issue is the blockchain may be at risk from quantum computers in the future. Traditional currency is verified and recorded by an intermediary such as a bank. Cryptocurrency is based on the blockchain which is a public ledger. This is maintained by the bitcoin network. The law requires banks to authenticate the recipient and sender for every transaction. A cryptocurrency transaction can be anonymous. The process begins by creating a private key with a code that cannot be broken. The key is sent to individuals sending cryptocurrency to the owner of the key. This is accomplished with a transaction containing the key. Once the key is verified, the transaction is accepted and the cryptocurrency is sent. This means although the transaction itself is public, the identities of the participants are protected.
If an individual could decipher the blockchain without a private key, they could access the funds. Accessing the blockchain requires a type of signature that is signed electronically and uses a complicated algorithm. This signature would be incredibly difficult if not impossible to create without the private key. Although these signatures cannot currently be faked, this may change with quantum computers. The reason is quantum computers are not limited to digital information. Calculations can be performed with quantum mechanical interactions. Research is being conducted to determine the types of problems quantum computers will have the ability to solve. Two of these problems are finding a number’s prime factor and solving elliptic curves. Elliptic curve cryptography has the potential for using an algorithm to determine the secret code for the key. This is not possible with the current computers.
The Potential to Steal Cryptocurrency
The public key is only currently revealed when a transaction is made in the network. The window of opportunity for correctly calculating the private key using the public key is extremely limited. This means the quantum computer would have to make the calculations very quickly. The problem is the public key is often already stored on the blockchain so it is already a known entity. This eliminates the small window of opportunity and enables a thief to steal from the blockchain without the necessity of a transaction. This would place about one third of the blockchain at risk. This equals tens of billions of dollars. There is no guaranteed way to predict how long it will take until a quantum computer has the strength and speed necessary to attack the blockchain. The most common assumption is a period of approximately ten years. It has become critical that research establish an alternate to elliptic curve cryptography that can resist quantum computer attacks. There is currently no emerging standard. The good news is the developers of cryptocurrency are now taking the potential damage of quantum computers into effect. This means cryptocurrency and the blockchain will continue to thrive despite quantum computer technology.