Alex Fedorov: Quantum computers are a threat to cryptocurrencies and blockchain

May 10, 2019 · 10 min read
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Alex Fedorov, a senior researcher at the Russian Quantum Center, in an exclusive interview told LetKnow.News about the threats that quantum computer poses to Bitcoin, what is going to happen after its appearance to BTC, and which cryptographic problems are yet to be solved by blockchain developers.

Alex Fedorov, PhD was one of the first who drew attention to the threat to cryptography from a quantum computer. And together with his team he developed a prototype of a quantum blockchain.

- You have created a quantum blockchain. Tell us what it is and how did you came to it.

- I am engaged in quantum physics and quantum information technologies. This is the research direction that emerged at the junction of physics and computer science several decades ago. The basic idea is to use some properties of quantum systems for computer science problems. For example, in 1994, P. Shor from MIT showed that if we try to build a quantum computer based on such phenomena of quantum physics as superposition (when quantum analogs of information bits, qubits (quantum bits), are both in states 0 and 1 at the same time) and quantum entanglement, such a hypothetical computer can solve the problem of factoring numbers (decomposing a number into prime factors) very quickly — in polynomial time.

It sounds very far from the practice. However, most common cryptography algorithms that we use every day are based on the complexity of this task. In order to protect our data on the Internet, we need to somehow place the cryptographic keys for encryption. And for this purpose, such tasks are used that are easily solved in one direction, but extremely difficult to solve “in the reverse order.” No classic supercomputer can solve the problem of factoring a sufficiently large number in a reasonable time. But as for the quantum one — it can do it. Therefore, if a quantum computer is launched, it can be a threat to information security.

What is blockchain? Blockchain is a kind of distributed system, which is based on cryptographic primitives. There is a troika: my secret key, which I do not reveal to anyone, my public key, which I demonstrate to everyone, and some algorithm for converting a private and public key, which is called a signature. And it turns out that the signature on the public key is easy to verify, but it is very hard to get a private key. Such cryptography is also based on complex tasks for classic computers. But for quantum computers, as we said, this task can be easy. Therefore, if a quantum computer existed, it could have cracked digital signatures in the blockchain.

And on the wave of blockchain hype, as a super-protected system, I scrolled through my head several times, why people believe in it so much, because digital signatures can be hacked by a quantum computer. This was the starting point of our study. And the second thing that is used in blockchain is an algorithm of consensus, i.e., transactions that fall into the block and that do not fall. That’s where a quantum computer can give quadratic acceleration. It is not as big as breaking a digital signature, where a quantum computer gives exponential acceleration. However, if quantum computer existed, it would be powerful enough to manipulate the network in terms of consensus, and, accordingly, mining.

- What is quantum encryption, what problems does it solve? And how does this development differ from the usual blockchain?

- Quantum computer has a strong influence on blockchain. When the question arose whether it was possible to build such a blockchain that would be resistant to contacts with a quantum computer, in other words, that the blockchain would remain protected if all network users had a quantum computer, then we decided to create a layout for such a distributed registry. The most valuable in it is that we have proposed incorporating a system of quantum cryptography into the blockchain.

The organisation of quantum cryptography is based on the fact that cryptographic keys are obtained not by solving mathematical problems, but by exchanging individual quantum objects. Particles of light, photons, are best for this purpose. All users with such a device can distribute symmetric keys and use these keys to form analogs of the signature, thereby signing transactions, and use a mechanism that is resistant to high-power attacks for consensus. So quantum encryption is not a very good term, it is more correct to speak of quantum key distribution.

We came up with this concept and demonstrated it in a proof-of-concept experiment. That’s what a quantum blockchain is. But you need to understand that this is a very research development. In fact, the important thing for the cryptocurrency community was the fact that we were one of the first to notice that with the arrival of quantum computers, blockchain will have problems, and when we create blockchain now, it makes sense to take that fact into account. And because of that, our scientific work has collected a lot of citations in the context of quantum computer that can endanger blockchain work.

- Where is this technology potentially applicable and is there demand for it today?

- Greater demand will appear with the development of quantum cryptography. There is a demand for these devices that can be used for a wide range of tasks and even just for encrypting traffic. Moreover, a quantum network can be used to create a protected distributed registry infrastructure.

This is necessary for data exchange in the interbank system. Banks are the first adopters of quantum cryptography technology. This technology is booming all around the world, and at the same time Russia is at the forefront. In Russia there are quite a few of very strong teams in the field of quantum key distribution technology — one of them is our team in the Russian Quantum Center and the company QRate. And in Russia, the first industrial experiments were conducted in banks, namely Sberbank and Gazprombank. And, of course, they are eager to know whether it is possible to apply quantum cryptography in secured distributed registries in the banking sector.

- How expensive is the quantum blockchain infrastructure? And what are its necessary elements?

- The infrastructure for quantum encryption is still expensive, since this technology has just begun to appear on the market. And this market is just beginning to take shape. Such devices are very expensive, about one hundred thousand dollars each.

In fact, those are two devices, a receiver and a transmitter, they operate in the “point-to-point” mode. A set of quantum cryptography devices can be converted to a network device. And most importantly, no matter what computational power the intruder possesses, he cannot crack such a system. Therefore, the confidentiality of private keys is not based on the complexity of solving problems, like modern cryptography, but on the fundamental laws of physics. Therefore, everything that is based on mathematics, might change its status due to the development of computational technologies, and the status of the laws of quantum mechanics remains the same for the last hundred years. Therefore, quantum cryptography is impossible to crack even at the concept level.

- Many people say that one of the potential threats for the blockchain is a quantum computer. To what extend that is true?

- Quantum computers — a threat to cryptography in principle and blockchain is no exception. It is important to understand that all cryptography with the quantum computers launch will be under threat.

But I am a positive thinker, and believe that cryptography that is resistant to quantum “machines” will appear earlier than similar computers. All the ingredients there are for it. Indeed, besides quantum cryptography, which is based on the creation of devices emitting single photons, that in turn allow cryptographic keys to be created, there is another direction that is actively exploited by blockchain. It is called “post-quantum cryptography”.

This is cryptography, which is based on mathematical problems that both classical computer and quantum solve approximately equally badly. Such tasks, of course, exist. It is not yet known whether it is true — there is no strict proof. Maybe we do not know some kind of quantum algorithm that would solve such problems quickly. And if you create a cryptography based on such problems, it will be absolutely classical cryptography, but based on the “new” mathematics. And if it is incorporated into the blockchain, and the attacker even has a quantum computer, then nothing bad can ever happen to the “network”.

I do not know whether a quantum computer will be used to break blockchains. But, in general, had it already existed and emerged on the wave of cryptocurrency hype, for example, then of course it would have been a serious threat. Imagine, instead of this whole heap of mining centres and pools, it would be enough to have only one, the quantum one. Moreover, it would mine cryptocurrency much faster. So, a quantum computer is of great interest for the blockchain.

I now see that many blockchain projects, survived under current conditions, are thinking of switching to quantum-protected solutions. The Quantum Resistant Ledger is just one example. And there are a lot of such examples, including the ones from Russia. Therefore, I believe that a quantum computer will be developed much later than cryptography and the blockchain will develop the protection against it.

- From your point of view, how much time is needed for quantum encryption to become a reality, not just a theory?

- I am optimistic about it. I believe that it is possible within 5–10 years on a minor scale. When quantum computers will fully enter our lives? It is more difficult, and might take another 10–20 years. So, 5–10 years for research prototypes, and another 15–20 years for the technology to come into our everyday life.

- What will happen to Bitcoin when the quantum computer is developed?

- I think it will have a fork, which will be quantum-stable. And with this fork, everything will be fine. As for the main branch there is a question.

Saying that such system is completely democratic, this is, of course, the question of “who has more computing resources.” Blockchain only works steadily if resources are evenly distributed across the network. If that’s not the case, then the blockchain as a whole, and Bitcoin in particular, has problems.

Therefore, the emergence of such a powerful computing tool must affect the exchange rate of, say, BTC. And, I am repeating myself, however I do believe that quantum-stable forks will appear soon. And it will happen quite soon.

In general, now, when building a blockchain, cryptocurrency and other cryptographic systems, developers are guided by the principle of crypto-agility. I.e., the system is built in such a way that cryptography can be replaced on the fly. Conventionally: a quantum computer is there, and you change your cryptography to a quantum-protected one. These principles are laid in the new blockchain technology.

But as for Bitcoin itself there is a problem, because it is made the way it is. But the fork may well appear. In general, the topic of Bitcoin sustainability is being actively investigated, by our group as well. We recently studied what would happen if we add the ability to detect wallets hacking in Bitcoin. It turns out that inside BTC there are many interesting mechanisms that allow, if someone has hacked something, to detect that fact. Therefore, BTC is quite an interesting system, which is still to be investigated.

- How will the blockchain market change in the next 5 years? What are the fundamental problems with this technology that are needed to be solved?

- I think there is a number of serious problems. First of all, it is a scalability problem. Blockchain is a technology that, on the one hand, provides security based on complex mathematical problems.

But on the other hand, because of those tasks, the blockchain might be quite slow. So, here you need to find the right compromise. And to do so in a way to process a sufficient number of transactions, for example. And to ensure their security at the same time. Because security and time are often in such anti-compromise. It is very hard to remain safe and effective at the same time. And this is not only in blockchains, but everywhere.

In other words, efficiency, given the growth of transactions is the problem. Security, especially in terms of a quantum computer, is also a problem. And these are just technical difficulties. There are a lot of business problems. For example, you need to find where decentralisation provides real benefits. There are just few of such industries now. Moreover, one need not only to find the application, but also to make it profitable.

Now we are at, so to say, the “hype curve”. In other words, hype cycles. There was a peak, then a failure, and then it comes to saturation. Stable saturation will appear when the blockchain is beneficial in some specific industries, and they will be implemented by real businesses. But in terms of technology, two serious problems are efficiency and safety. And they are very difficult to solve at the same time.

- How did the blockchain affect the development of technologies? Indeed, lately a lot of related infrastructure has emerged: new technologies, equipment, and so on.

- In quite an interesting way. To say that it has made a revolution would be an exaggeration. Because it may have started a revolution. Has it finished it at the moment? It’s a very controversial topic. Let’s leave it to the discretion of the historians of the information age.

Anyway, the blockchain has strongly attracted people’s attention to the problems that people usually do not take into consideration. Cryptography problems, for example. That subject has become much closer and clearer to people. People became to be interested in it only when cryptocurrencies and blockchains appeared.

Also, blockchain has raised interest in technological knowledge along with quantum computers and artificial intelligence. The blockchain here is such a “third flag” that is constantly trying to increase the level of people’s interest in technology and this is very important.

Now we do not use bitcoin or blockchain in everyday life. But those are already buzz words, and it is very important for technological development in terms of its potential.

- What is the main purpose of cryptocurrencies and what is their future?

- I think that they will eventually be incorporated into the financial system. Not sure whether they can exist as an alternative financial system.

The purpose of cryptocurrencies is basically the advantages they provide: convenience, control, transparency. It would be great if all the processes of issuing and converting currencies were as transparent as, say, bitcoin. On the one hand, there is transparency, and on the other — privacy.

Of course, there was an ideological purpose as well — to understand the interest of society in technologies. However they have a technological future of course. After all, cryptocurrencies allow to revise the principles on which the current financial instruments are built.

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