Quantum technology, what is the impact on the blockchain
Blockchain is primarily a financial tool and an enabler of emerging supply chains, smart contract technology, records management and clinical records monitoring; it is a financial asset with extremely high extrinsic value. Blockchain technology powers cryptocurrencies such as Bitcoin, allowing users to conduct virtual transactions online, making cash transactions faster and possible without traditional banking or credit operations.
With the growing demand for technology that can protect data while proving it has not been tampered with, blockchain is considered to be very secure. Due to its decentralized nature, blockchain can be used as a consensus system backed by cryptography to protect data. Due to these factors, it has even evolved into a financial asset for consumers and a large number of institutional investors.
Blockchain is one of the great technological revolutions sweeping the world, and quantum technology helps to enhance the security of blockchain.
In papers, quantum computing is often described as a threat to blockchain security: it is said to undermine the cryptographic foundations, communication protocols and immutability of its records.
Quantum computers can be accessed through cloud computing and purposefully created by hackers to break current cryptography; therefore, it is only a matter of time before attacks against blockchain and cryptocurrencies emerge.
And quantum computers are different from the traditional computers we use today. Quantum computers use subatomic processes such as entanglement and superposition to accomplish calculations that are much more powerful than our current computers.
Traditional computers use conventional processors with a word length of 64 bits (1+N), but quantum computers use quantum bits from quantum processors, which expand the word size exponentially (2N). This is useful for solving problems with a large number of variables compared to the linear processes utilized by our current conventional computers: these variables must be computed as a huge instruction set.
A quantum attack on the blockchain would undermine consumer trust in the blockchain, leading to a financial chain reaction. On the other hand, a successful quantum attack on cryptocurrencies such as Bitcoin would have serious consequences for cryptocurrency owners, according to research by the Hudson Institute.
Key factors and threats in blockchain security
"In 2021, the market capitalization of the entire cryptocurrency community reached a record $3 trillion," according to The Block Research, "demonstrating the global value of blockchain technology."
The cascading effects of a quantum attack could bring the economy to a standstill. Safeguarding this value by addressing the fundamental issues of wallet and node connectivity and basic infrastructure, including strengthening the blockchain's underlying algorithms, is critical.
Here, we can consider two well-known quantum algorithms by Grover and Shor and how they relate to the blockchain.
Grover's approach uses quantum mass to optimize search capabilities through quantum computers, allowing users to determine values among billions of unstructured data points; on the other hand, Shor's approach solves the problem of "finding the prime factors of an integer".
The quantum program in Shor's algorithm
Grover's algorithm is different from Shor's algorithm in that Grover's algorithm poses a greater threat to cryptographic hashing and stored data, while Shor's algorithm poses a greater threat to the communication channels between wallets and blockchain nodes. Traditional computers cannot reverse engineer cryptographic hashes because the processing power is too expensive in terms of time and resources. Performing linear computations on a traditional PC takes too long - even with a GPU swarm.
Now, quantum computers have become a scientific reality. Advances in the past two years suggest that quantum computers capable of outperforming traditional computers could be realized within a few years.
Quantum computers could derive the cryptographic keys associated with any public wallet address on the blockchain, or attack data in transit using Shor's algorithm. This would threaten blockchain users and undermine trust, as attackers could compromise accounts at scale.
Quantum circuit representation in Grover's algorithm
Using hash collision attack (HCA), Grover's technique can break cryptographic hashes faster than conventional computers. When performing a hash collision attack, Grover attempts to find two identical inputs that provide the same hash value; this causes errors and gives the ability to update data protected by the same digital signature to safeguard immutable records.
As a result, trust in the blockchain is eroded as data is manipulated and captured for profit.
Mining is a technique for confirming cryptocurrency transactions and displaying proof of work. Miners can be compensated in the form of cryptocurrency by adding this information to a blockchain block, a database of mining transactions.
Now, they are leveraging the power of quantum machines in combination with Grower's algorithms. Cryptocurrency mining is about solving complex problems to create individual blocks added to the blockchain; it diverts and disrupts the mining process itself.
As more and more people use blockchain technology, the number of blockchain security vulnerabilities has increased proportionally. As a result, there has been an increased interest in understanding the cryptographic hash algorithms used by protected blockchains.
What exactly is cryptography and why is it so important to the security of blockchains?
The purpose of an encryption algorithm is to make it difficult for unauthorized third parties to eavesdrop on secret blockchain-based conversations. It provides a platform to customize protocols and techniques during communication to avoid third-party intervention to access and collect data information contained in private communications.
The use of ciphers to protect communications dates back to the invention of cryptography in ancient times. Cryptography was widely used in ancient Egypt and the Roman Empire. In the 16th century, the Virginia Code is considered to be the origin of cryptographic algorithms: it involves the use of specialized methods to encode and decode communications. During the Second World War, the Enigma machine, built and used by the Germans, was one of the most famous cryptographic devices.
Enigma machine
Over the years, many newly developed encryption algorithms (e.g., the Advanced Encryption Standard algorithm) have provided applications for various use cases.
Nowadays, it is prudent to be cautious about the cryptographic algorithm used for blockchain. It was used during the Second World War and can produce ciphertexts that are difficult to decrypt by evaluating the alphabetic frequency distribution.
Among them, digital signatures and hashing algorithms are most commonly used for blockchain security.
1) Digital signatures
Digital signatures, often referred to as digital signatures, are a good example of asymmetric key cryptography methods. Typically, transactions on the blockchain require a digital signature and are in the form of a private key.
Digital signatures have become a popular method for maintaining blockchain security because it requires cryptography to connect the key pair and the user; and the user is also obligated to provide the key in the transaction, so the key requires an additional level of protection - the additional layer of protection provided by digital signatures is the key to adopting digital signatures as an algorithm for securing blockchain users one of the advantages.
2) Hash Hash Algorithm
The use of hash algorithms as an encryption method is crucial to the operation of blockchains.
A hashing algorithm is a way to encrypt data, making it more secure and allowing for more efficient storage; it can transform almost any kind of data into a string of characters.
When using hashing methods, the same input always produces the same output. No matter how much data is sent through the algorithm, it will always produce the same hash value using the same string of characters.
In summary, hashing algorithms bring significant advantages to blockchains in terms of increased speed while maintaining their security.
In addition to the above mentioned core blockchain algorithms for encryption, other possible cryptographic solutions include distributed p2p network protocols, zero-knowledge protocol, and Consensus Algorithm ......
Finally, it is not easy to determine which algorithm brings the highest degree of security to the blockchain: cryptographic algorithms (e.g., digital signatures and hashing algorithms) prevent unauthorized parties from accessing information; consensus algorithms protect the integrity of blockchain network members and transactions.
Even though blockchains are inherently secure, immutable, and transparent, algorithms are essential to ensure these qualities. By taking into account each user's unique input, these algorithms can also be altered to solve a wide range of problems-each critical in its own right.
In addition, quantum-resistant cryptography (PQC) such as those investigated by the National Institute of Standards and Technology (NIST) uses complex mathematics to protect cryptographic keys as an upgrade and hardening of current cryptosystems. The early stages have little impact on the replacement of the existing security industry, and in the future, there will be a replacement for existing security software or security chips.
Due to all the possibilities that quantum brings to the world, here we have predicted only quantum computing and blockchain.
It is conceivable to use cryptographic systems to protect against quantum threats, such as QSL (Quantum Security Layer ) and communication protocols resistant to quantum cryptography (PQC). It has now been shown that these algorithms are highly resistant to quantum attacks and can be rapidly deployed in networks and data.
It is worth noting that while the current PQC industry is still in its early stages of scale, based on the projected completion point of NIST's PQC standardization work (2024), cutting-edge consultancy ICV TAnk expects 2024 to be a significant point of industry-wide development, after which the industry will enter the fast lane. The global PQC industry is expected to reach $1.77 billion by 2025; the global PQC industry is expected to reach $42.42 billion by 2030
Global PQC Industry Size Forecast (2022-2030E)
Today, the growth of PQC has built consensus among major economies around the world. It is expected that in 2024-2030, major countries around the world will develop documents related to PQC standards as well as gradually migrate to PQC as a response to the threats to security posed by the practicalization of quantum computers around 2030.
[1] https://blockchainmagazine.net/what-does-quantum-mean-for-blockchain-security/
