Quantum Computers and Bitcoin

by Jonathan Underwood, Chief Bitcoin Officer

Lately there has been a lot of buzz around Quantum Computers and Bitcoin. Most of this fear is completely unfounded and is manufactured under the pretense that most holders of cryptocurrency don’t understand the technical part of it and just know that “it uses cryptography.”

So let’s go over the reasons why this is not a problem specific to Bitcoin (and other coins).

Internet Apocalypse

First, let’s assume the fear filled predictions on Quantum Computers and their abilities in the future are true. Some hacker somewhere is going to secretly break all encryption overnight and steal all our bitcoins.

This would mean the internet apocalypse.

If you can calculate a private key from a public key within 10 minutes, then why not capture all HTTPS traffic flying across the internet and decrypt as much as you can, uncovering passwords to online banking and many other secrets that could make you tons of money.

If it was public knowledge that certain cryptographic algorithms were broken, a large portion of internet services would shut down to protect their users. Just visiting their page could be dangerous, since many sites automatically send sensitive credentials with similar power to your password via HTTPS secured, JavaScript-proof cookies (Secure and httponly flags).

In fact, most cryptocurrency exchanges would probably shut down and refuse all connections. Trading would grind to a halt and price discovery would cease. Shorts, Longs, Hodlers, Naysayers, all would be without profits… to be honest, all would be too busy scrambling to save their online credentials to care, really.

But to be honest, it’s not that big of a deal.

The Pace of Innovation

Google announced that they spent tons of resources and a large amount of time, and finally got two PDF files to have a SHA1 hash collision, confirming suspicions that SHA1 was a weak hash algorithm. Similarly, their announcements surrounding Quantum Computing shows us one thing.

The people on the cutting edge are the ones trying to break everything.

Why? Because their business relies on HTTPS, their business relies on encryption and cryptographic hashes and signatures. So if the algorithms they are using can be possibly broken, they want the world to know it ahead of time and allow for transitioning to stronger things. This protects their business, and is logical.

Every step they get closer to breaking encryption, they will tell the world, and as we inch closer, cryptocurrencies along with browsers, internet banking, and other crucial infrastructure will slowly move towards stronger and stronger algorithms.

Satoshi’s Choices

Ever since the early days, public keys were being hashed into what are known as addresses. Also, the Proof of Work hash and many other hashes utilize double hashing and mixed algorithm hashing.

This choice to utilize cryptographic hashing in this way was intentional, and is one way to mitigate certain attacks. For instance, if the Proof of Work hash is a hash of a hash, and the algorithm is broken to a point where you can reverse it… BUT if it requires a lot of trial and error including checking to see if the input “makes sense” to tell if you found the “right answer,” then having another hash in between makes it harder to tell if the first reversal actually is the “right answer” since you don’t know the intermediate hash to begin with.

Similarly, addresses in the beginning mix two completely unrelated hash algorithms, so if one breaks, you have time until the other one breaks as well.

This, of course, is all predicated on zero address reuse. (If you reuse addresses, your public key is known, and the hash algorithms offer you zero protection)

Public Keys and Addresses

If you generate a new address, and someone sends some coins to that address, that transaction will stay on the blockchain forever, for all to see. The address contains a cryptographic hash of the public key. The public key is mathematically linked to a specific private key. That private key is on your device will be used when you want to spend those coins you just received.

The only data revealed to the blockchain when you receive coins, is a cryptographic hash of your public key. So even if quantum computers can calculate your private key from just your public key… no one knows your public key but you… yet.

The public key is revealed to the blockchain once you spend the coins that were sent to you. Since everyone needs to know your public key in order to verify the digital signature attached to the transaction. (Note: In Ethereum, the public key is revealed implicitly through the signature and extra data using some math tricks. But in effect it is the same thing. Revealing the public key.)

So, if you have ever spent coins sent to a certain address you control, that address does not protect your public key anymore. This is one of the reasons why people often say “Don’t reuse addresses” and why a recent BIP proposes to rename “addresses” to “invoices.”

Proof of Work in a Quantum World

This fear usually follows the logic that “When ASICs first started appearing, mining share was largely gained by a few companies that could source those ASICs. In a similar fashion, if quantum computing can speed up Proof of Work hashing, a similar trend might appear. Even worse, if the gains in speed are much higher than the jump from GPU to ASIC, centralization might take hold of the network.”

This, again, is highly unlikely.

Quantum computing in general is based on fuzzy calculations that require testing multiple parameters in parallel and searching for the “correct answer” from multiple results.

The nature of the SHA256 hash algorithm and the fact that mining Bitcoin requires two hashes instead of one increases the difficulty of this calculation for probabilistic quantum algorithms.

Making Sense of it All

So in conclusion, these are the lessons I hope you leave this message with:

1. The doomsday scenario for cryptocurrency is also a doomsday scenario for the internet at large, but don’t worry. It won’t just happen overnight.
2. Satoshi’s design of Bitcoin, while not perfect, accounted for many of these concerns of quantum computing.
3. If feasible, avoid keeping coins on addresses which have spent coins before. Generate a new address every time you want to give someone an address.
4. If a headline sounds sensational, it probably is misleading. Read the article but take it with a grain of salt.

You can view more detailed corporate information of bitbank here.
English disclaimer is also posted on medium.com