Can Governments Stop Bitcoin With Quantum Computers?

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Most governments love Bitcoin (CRYPTO: BTC) as much as we love walking with stones in our shoes. Recent ransomware attacks, where hackers have targeted vulnerable infrastructure such as gas pipelines and demanded a ransom in the form of Bitcoin, add even more scrutiny to the cryptocurrency. There are also numerous regulatory controls over the use of Bitcoin for illicit activity and money laundering. Additionally, Bitcoin mining energy consumption has spiraled out of control in recent years and poses a direct threat to climate change initiatives.

The rise of quantum computing may soon give governments a way to crack down on Bitcoin and other types of cryptocurrency. The information encoded in “quantum” supercomputers, called qubits, exist in infinite states due to something called superposition, because there are infinite decimals between 0 and 1, which greatly increase their speed over to binary computer systems. Governments could potentially decrypt digital currencies or launch hash attacks to take over their network for a regulatory shutdown with these machines. Let’s analyze this risk in detail.

Image source: Getty Images.

Bitcoin cryptography in two minutes

Before understanding Bitcoin’s quantum vulnerability to government surveillance, we must first understand how the network works. Consider this first basic analogy for digital currency encryption: draw two points on a circle and name them A and B. Then draw a series of intermediate points on the circle (C, D, E, etc.) and connect a line through all these points from A to B. Points A and B are visual representations of the public key of his wallet address while the number of steps it took to get from A to B are representations of its private key. For an outside observer, there are almost endless paths one can take from A to B, and it would take until the end of time to guess the right path with ordinary computers. Bitcoin’s cryptography is similar, except that it uses elliptical curves, which are harder to crack, in a process called the Elliptic Curve Digital Signature Algorithm (ECDSA) to secure its wallets.

Then consider this analogy to understand the vulnerability of hash attacks: try opening a three-digit combination padlock without knowing the passcode (no bolt cutters are allowed). The puzzle itself (known as SHA-256) isn’t at all complex, but it takes a lot of trial and error to find the right combination. It’s similar to miners who verify Bitcoin’s obfuscated transactions, except the network uses a secure process to make sure they aren’t compromised. What’s different is that the difficulty is variable and can reach ridiculously high numbers.

The impending quantum invasion

Let us return to the two examples. Cracking both ECDSA and SHA-256 is simple but repetitive: someone guesses a possible path or combination, tries it, and it’s either good or bad. But imagine being able to trace all the possible solutions to the combination lock, then try them all at once. This is what a quantum computer is capable of doing.

Keep in mind that it takes a 5,000-qubit quantum computer to penetrate Bitcoin’s encryption and resolve private keys. At present, the most advanced quantum computers can only achieve 66 qubits because their quantum states are very difficult to control. So the idea of ​​any government’s quantum computers deciphering your crypto wallets should be the least of your worries for at least the next 100 years.

Should i be worried?

Fortunately, crypto is one area that overwhelmingly favors the defender, not the attacker. The fear and uncertainty of quantum computing is quite remote given its slow development and the Bitcoin network’s ability to scale to resist attacks, such as with encryption upgrades. Keep in mind that there are other priorities that governments may want to use their quantum computers for, as many incidents of hacking and ransomware still occur beyond the world of Bitcoin.

However, the same cannot be said of other altcoins developed in a less secure manner with much lower network hash rates than Bitcoin. This would mean that even a less sophisticated quantum computer can launch 51% hash attacks (meaning it only needs to control 51% of the network’s mining power) against them. Ultimately, don’t be surprised if the U.S. Securities and Exchange Commission gets their hands on one and uses it to start shutting down some of the overdue regulatory cryptocurrencies as soon as possible.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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