The recent change to the prospectus of BlackRock’s bitcoin ETF has reignited the discussion about the threat that quantum computers could pose to cryptocurrencies in the future. How realistic is the scenario of breaking bitcoin encryption and banking systems, we asked an expert in the field.
“Bitcoin’s quantum doom is coming,” “quantum computers will crush cryptocurrencies,” “quantum apocalypse is coming” – headlines in some English-language and Polish media make it clear that quantum computers are a technological breakthrough that investors, especially cryptocurrency holders, should be wary of. The topic has recently gained traction due to the update of the BlackRock Bitcoin ETF prospectus, which lists quantum computing technology as a potential threat.
“The cryptography underlying bitcoin may prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computation, algebraic geometry, and quantum computation, may render such cryptography ineffective. Quantum computing technology is a new phenomenon that, because it is still developing, makes it difficult to predict its ultimate impact on the future value of bitcoin and other digital assets,” the iShares Bitcoin Trust ETF BlackRock reads in the prospectus.
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“However, if quantum computing technology is able to advance and significantly increase its performance beyond that of today’s leading quantum computers, it could potentially challenge the feasibility of many of the cryptographic algorithms used in the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets such as bitcoin,” BlackRock added.
The Issuer points out that in such a scenario, without changing the architecture of bitcoin to make it resistant to quantum computing, the security of the network or cryptocurrency wallets could be breached, and thus adversely affect the fund's shares. Is there really something to worry about and is it time to sell bitcoins and then go to the bank and withdraw all the cash from the account?
This is just the beginning of the journey
According to Dr. Mariusz Sterzel from the Academic Computer Center Cyfronet AGH, quantum computers are currently far from being a threat to encryption systems, including Bitcoin and banking networks.
– Colloquially speaking, quantum computers currently being built are imperfect devices burdened with errors, formally called Noisy Intermediate-Scale Quantum in English. These are actually research devices, capable of performing limited calculations, but not on such a scale as ordinary supercomputers. What's more, we have not mastered their production technology well – says Dr. Sterzel – In addition, the results obtained on them are burdened with large errors resulting from the imperfections of these devices. In terms of hardware, we are only at the beginning of the road, and the second problem is software. There are not yet ready, dedicated software packages for scientists from specific fields, as is the case with classic supercomputers. Each computational problem must be programmed separately and often specifically for a given machine – explains the expert.
Will quantum computers ever be developed to the point where they reach the level of evolution of a smartphone or a regular computer? Dr. Sterzel is optimistic about this. As he points out, scientists have made enormous progress in this field in recent years.
– A few years ago, a few or a dozen qubits were something. Today, a “typical” quantum computer that can be purchased on the market is a device with several dozen qubits. Only a few manufacturers have developed technology whose quantum computers have several hundred qubits, an example of which is the Finnish IQM. In the US, one of the leaders in the industry, IBM, supplies devices with almost 1,000 qubits. These are so-called gate quantum computers, general purpose. At the same time, the D-Wave company creates devices that perform quantum computer tasks based on the annealing phenomenon. Their devices now have over 5,000 qubits and are also available to Cyfronet users – says Dr. Mariusz Sterzel.
The expert emphasizes, however, that these are still devices burdened with very large errors and at this point, the work of scientists is focused, among other things, on the best possible use of various computational techniques, including machine learning methods, so as to minimize the impact of quantum computer errors on the calculation results. Dr. Sterzel emphasizes that quantum computers are devices dedicated to solving specific computational problems, such as those whose computational complexity increases exponentially with the number of parameters studied. Quantum processors installed in laptops, and even less so in smartphones of the future, should not be expected.
When will encryption algorithms become compromised?
– If we manage to create quantum computers with low error and significantly increase the number of qubits and connections between them. Then there may indeed be a threat to such classical algorithms as RSA, which are commonly used on the Internet, or the protocol on which bitcoin is based. There are also studies that have tried to estimate how many qubits are needed to break the currently used RSA cipher. To do this, several thousand logical qubits would have to be used for this purpose – from 5 to 10 thousand – explains Dr. Sterzel.
At first glance, it may seem that scientists are not far from this stage. However, logical qubits do not correspond to physical qubits, which we wrote about in the previous section. Sometimes it takes several dozen or several hundred physical qubits to obtain one logical qubit. Therefore, to break current algorithms, it would be necessary to create quantum computers armed with millions of physical qubits.
Dr. Mariusz Sterzel emphasizes that there is also another side to the coin, namely the development of post-quantum algorithms that will be resistant to attacks by quantum computers. Currently, work is being carried out on such algorithms that will work on classical computers, but will be resistant to attacks by quantum computers, using specific mathematics or mathematical structures – I would not be afraid that quantum computers will be a threat – the expert sums up.
The next technological revolution
At this stage, quantum computers are still research devices and scientists are primarily focused on understanding their capabilities. So far, they have been used in optimization processes, used to test attempts to break various encryption algorithms, and for analysis for industry needs.
– We are working with colleagues from France on a project for the French space agency CNES. We are studying the electronic structure of sulfur dioxide, which occurs in the atmospheres of exoplanets, to check whether quantum computers will provide more information than traditional chemical calculations – comments Dr. Mariusz Sterzel – Their applications are also being studied in the banking and finance sectors. Soon, together with colleagues from Finland and the Czech Republic, we will also conduct research on quantum artificial intelligence – adds the Cyfronet representative.
Will quantum technologies turn out to be a revolution in the future on the scale of artificial intelligence? According to our interlocutor, they have great potential for this, although, as he emphasizes, both fields should not be treated as separate islands. According to Dr. Sterzel, not only quantum computers, but also the market of sensors based on quantum phenomena may turn out to be a big breakthrough.
– Let's imagine that we have a sensor that examines our sweat and on this basis we also get accurate blood test results. The market for sensors based on quantum phenomena may have huge potential – says the AGH expert.
When will we know that quantum technologies have reached their “Chat GPT moment” and a market boom may soon occur? According to Dr. Sterzel, the turning point will be the information about the creation of a quantum computer that is not burdened with such large errors as it is now. – When this breakthrough occurs and it will be possible to easily increase the number of qubits, as is currently the case with transistors in classical processors, then quantum technologies will explode, similarly to the development of artificial intelligence after the appearance of Chat GPT – the expert believes.
Quantum computers for scientists and entrepreneurs
– In Krakow, we do not have our own quantum computer, but thanks to the support of the Ministry of Science and Higher Education, we offer cloud access to the annealer in Poland via the PLGrid infrastructure. The Ministry of Science and Higher Education also co-financed Cyfronet AGH's participation in the construction of LUMI-Q – a gate quantum computer, which was installed in Ostrava just a few weeks ago and where our users will be able to use these resources – says Dr. Mariusz Sterzel. In the future, quantum computers built around the LUMI artificial intelligence factory will also be available to our researchers and entrepreneurs. We would like to advertise access to these quantum computers, so that as many entities from Poland as possible can use them – whether scientists or entrepreneurs. If anyone has an idea for using quantum technology or needs support in calculations, please contact Cyfronet.
