Will quantum computers break the prosperity of Bitcoin?

Source: Forbes
Compiled by: Yu Yu, C114 Communication Network
Arthur Herman, a senior researcher at the Hudson Institute and head of the Quantum Alliance Initiative, recently published an opinion piece. He stated that history tells us that what goes up must come down, especially for commodities like cryptocurrencies, which are driven up by media hype and financial realities. But there is no doubt that regardless of the ups and downs of Bitcoin and Ethereum in the current market, even if the Bitcoin bubble bursts, cryptocurrencies will continue to exist. Quantum-safe solutions can ensure they remain stable and secure for a long time to come.
Here is the full opinion: When New York City's new mayor, Eric Adams, announced his plan to receive his first three paychecks in Bitcoin, everyone was stunned. Over the past year, Bitcoin has dominated financial headlines. Miami Mayor Francis Suarez has also announced that he will accept his first paycheck entirely in Bitcoin.
The mayor's announcement further indicates that cryptocurrencies are no longer a mysterious investment for the super-rich (or super-swindlers), but have entered the financial mainstream. As early as May of this year, Deutsche Bank declared Bitcoin to be the world's third-largest circulating currency, after the Euro and the Dollar.
Mayor Adams himself stated that he intends to make New York City the "center of the cryptocurrency industry."
Of course, history tells us that what goes up must eventually come down, especially for commodities like cryptocurrencies, which are driven up by media hype and financial realities. Whether the current crypto craze will turn into a crypto bubble remains to be seen. For them, the benefits of Bitcoin and other cryptocurrencies come with two advantages:
First, they are not state-valued currencies.
Second, cryptocurrencies rely on blockchain or distributed ledger technology (DLT) to secure and verify their transactions. The ongoing ledger of cryptocurrency transactions is never stored in any single location, meaning there is no centralized version for hackers to compromise. Since the data is hosted simultaneously by millions of computers, anyone on the internet can access it. But it is also protected because after each transaction in the shared ledger; once all ledgers match with every computer in the network; transactions are encrypted along with the rest in so-called blocks. New blocks are then added to the existing previous blocks, forming a chain—hence the term blockchain.
In summary, blockchain is an inherent security system that prevents hackers or attackers from forcibly opening the distributed ledger without anyone knowing.
As technology master George Gilder stated in "Life After Google," using blockchain to share and protect data poses a greater threat to the dominance of internet giants than any government regulation or legislation, just as cryptocurrencies pose a useful challenge to the elites controlling our state-valued currency.
But as always, there is a problem. Blockchain is a sufficient safeguard against existing network threats, but it cannot address the threats posed by future large-scale quantum computers.
As I mentioned earlier, the encryption of blockchain is based on elliptic curve cryptography, which can be easily broken by quantum computers that can decrypt the complex algorithms used to secure almost all electronic data, including blockchain. In an undetectable and ongoing cyberattack, quantum attackers appear to be just another member of the shared ledger.
How vulnerable are cryptocurrencies like Bitcoin?
The total market value of cryptocurrencies in 2020 was $330 billion. Today, it is close to $2 trillion. Among them, institutional investors account for 63% of cryptocurrency trading, compared to only 10% in 2017, meaning that a collapse in cryptocurrency value will inevitably impact the balance sheets of Wall Street and the global economy.
Recent research conducted by the Quantum Alliance Initiative in collaboration with the economic research firm Oxford Economics indicates that quantum attacks on cryptocurrencies would lead to a 99.2% drop in value, resulting in a direct loss of $1.865 trillion for cryptocurrency owners and nearly $1.5 trillion in indirect losses for the overall economy.
In summary, we expect the U.S. economy to suffer a blow of $3.3 trillion.
This is based on calculations of the current value of cryptocurrencies. By around 2030, when large-scale quantum computers emerge, cryptocurrencies will be more deeply integrated into the global financial system, and the losses will be even greater.
Fortunately, there is a solution. The most direct one is post-quantum cryptography, which involves deploying algorithm-based encryption that is unbreakable against future quantum attacks as well as current classical attacks. Cryptocurrency exchanges have already suffered highly destructive attacks, such as the $30 million loss from the 2018 attack on the South Korean exchange Bithumb, and the attack on Poly Network in August of this year, where network thieves stole over $600 million.
The U.S. National Institute of Standards and Technology (NIST) is planning to release post-quantum cryptography standards by 2024, but we have no reason to wait. Companies in the U.S. and Canada can now provide solutions, including offering the best hybrid solutions based on post-quantum and quantum technology, while other companies are creating DLT versions that include quantum solutions from the start.
There is no doubt that regardless of the ups and downs of Bitcoin and Ethereum in the current market, even if the Bitcoin bubble bursts, cryptocurrencies will continue to exist. Quantum-safe solutions can ensure they remain stable and secure for a long time to come.