What is a quantum computer and how the machine became a threat to cryptocurrencies

CONTENT

  • Crypto community members fear the consequences of such devices

  • Quantum Computers May Cause Digital Asset Market Doom

  • Machines have created a quantum superiority problem

International consortium of news organizations developing transparency standards.

China has built a quantum computer 10 billion times faster than Google’s prototype. We will tell you why it is important and what it means for the cryptocurrency industry

The editors of BeInCrypto have collected information about the device and the risks it carries for the cryptocurrency market in one article.

What are quantum computers

A quantum computer is a super-powerful computing device that processes information about 100 trillion times faster than a traditional computer. This speed is useful for processing big data, modeling neural networks, and much more from what we call the technologies of the future..  

There is another side to this medal. The developers argue that the quantum computer will destroy the current computer security system. With such a speed of data processing, it costs nothing in seconds to analyze terabytes of information and crack any cryptographic code.  

Here’s an example: Bank transactions and messages are encrypted using the RSA algorithm. It will take tens, if not hundreds of thousands of years to select keys for it on an ordinary computer. Quantum will do the job in minutes.

“Today we are at the stage where we have quantum computers – we can use them, program them. We are looking for sustainable ways to industrialize them and stabilize technology. We also continue to learn to create algorithms for them, “- this is how IBM Ambassador in Europe, Doctor of Computer Science Mark Mattingly-Scott commented on the progress in the development of quantum computers during one of his lectures.

The expert is sure that humanity is ready for such machines and the consequences of their work.

How a quantum computer works

A quantum computer, unlike a conventional one, operates not with bits (a unit of information in the binary number system), but with quantum bits, or qubits. This technology speeds up the device hundreds of times.

At the hardware level, a quantum computer is also more complex than its predecessor. It has more parts and needs constant cooling to work effectively.

What quantum computers are on the market

The prototypes of quantum computers emerged in the late twentieth century. In the fall of 2019, Google presented the latest development, demonstrating the new possibilities of quantum computing.

NASA experiment showed that it took the machine 3 minutes and 20 seconds to make the calculation, which would have taken the most powerful supercomputer Summit (IBM) at that time about 10 thousand years.

Google Quantum Computer Review:

For unknown reasons, the NASA team deleted the report, but journalists from The Financial Times managed to copy it..

Bitcoin Q&A: Is Quantum Computing a Threat?

In early December 2020, a new, even more powerful quantum computer appeared on the market, created by a group of Chinese scientists led by renowned physicist Pan Jianwei. Based on test results published in Science, the performance of the device exceeded the performance of a Google computer by 10 billion times, and a modern supercomputer by 100 trillion times.

Video report with an overview of the Chinese quantum computer:

At the same time, the developers did not tell how much a new generation quantum computer costs..

Quantum computers in the service of the state

The developers of the new quantum computer believe that the creation of such a machine has brought China closer to quantum supremacy. A high-performance device that can quickly solve complex problems will give the country advantages in various industries, from chemistry to artificial intelligence and big data analysis..

In the video below, Pan Jianwei presents the stages of the formation of “quantum communication” based on his own developments and draws parallels with the development of human civilization.

The developer noted that 100 thousand years ago Homo sapiens defeated the more adapted to survival Neanderthals (Homo neanderthalensis) in the evolutionary struggle, because he learned to communicate and exchange information.

In the 21st century, people continue to develop communication, but already at a quantum level. Jianwei is confident that work in this direction will be the basis for the further evolution of mankind.

How quantum computers became enemies of miners

The presence of a super-powerful computing device will give a person or group of people an advantage and control over the network, jeopardizing the cryptocurrency mining industry.

Mining requires high-performance hardware. Digital asset market participants use the computing power of their computers to solve math problems. Some work on household computers, others purchase special devices for mining cryptocurrencies – ASICs.

The reward is received by the one who solves the problem before the others, therefore, the higher the performance of the computer, the more likely it is to get ahead of the competition and get the reward. Sometimes miners combine computing power and solve problems together. The only drawback is that the profit has to be divided among all pool members.

But there are equally many miners, they are scattered all over the world, this is how the effect of decentralization is achieved.

Distribution of mined blocks by miners and pools for the last 4 days. Schedule from December 10, 2020. Data: blockchain.com

The graph shows that the activity of miners in the Bitcoin network is distributed between individuals and large pools. All network members compete for the right to receive the award – therefore there is no unanimous leader in the market.

The total amount of computing power that miners have connected to the bitcoin network is called the hash rate. Due to the rivalry of the parties, equilibrium is maintained in the cryptocurrency mining market – after all, everyone works on approximately the same equipment.

Bitcoin hashrate chart. Data: blockchain.com

Quantum computers can upset this balance by hijacking 51% of the bitcoin hash rate (the so-called 51% attack). Whoever owns this computing power will gain control of the cryptocurrency network.

Such a power grab will disrupt the network and block the confirmation of transactions. In addition, a 51% attack poses a threat of double spending..

To carry out such an attack using computers and ASICs would require a colossal amount of money and electricity. A quantum computer connected to a cryptocurrency network will solve this problem faster and cheaper..

More information about cryptocurrency mining – you can find out its features and work options from our material.

What is a quantum computer and how did a machine become a threat to cryptocurrencies

Read also: Cloud mining – list of the best sites 2020

Why quantum technologies threaten cryptocurrencies

Interception of most of the hashrate on the Bitcoin network and other cryptocurrencies, in the creation of which the developers used cryptography, can completely disable the project. Only users who have devices with similar power ratings will be able to resist such actions..

In practice, such a scheme is unlikely to be available. The fact is that buying a quantum computer today in order to confront the enemy is an almost impossible task. Accordingly, an attack from the owner of such a device on the bitcoin network can be fatal for her..

According to analysts at Deloitte, with the help of a quantum computer, among other things, it is possible to organize the theft of a cryptocurrency (by using its computing power to select access codes). In the course of their work, the researchers came to the conclusion that the level of threat depends on the type of coin storage. According to their calculations, at least 25% of all mined bitcoins are in the high-risk zone..

Graph of the quantum vulnerability of bitcoins. Data: Deloitte

Read also: Rating of the best crypto wallets in 2020

The CEO of the British cryptographic company Post-Quantum, Andersen Cheng, in turn, noted during an interview with DeCrypt that today the members of the crypto community should start developing tools to counter quantum hacking. Otherwise, in his opinion, the destructive power of such machines could destroy Bitcoin..

Interesting fact! At the moment, the team of the US National Institute of Standards and Technology (NIST) is engaged in the creation of post-quantum cryptographic algorithms. With the help of the company’s developments, in theory, it will be possible to program a fork in the cryptocurrency networkIn the cryptocurrency world, a fork is, in fact, a change in the blockchain protocol. Since cryptocurrencies operate on decentralized networks, all parties … More to orchestrate a fork of the blockchain. The new “branch” will be able to continue to work safely on the basis of a new algorithm that is resistant to attacks by quantum computers..

NIST’s development could be on the market by 2022. Until that time, the crypto community will be in a state of “quantum uncertainty” of its future.

Despite the indicated risks, one can also find opinions on the network according to which the threat to Bitcoin emanating from quantum computers is excessively exaggerated..

What else are members of the crypto community afraid of?

Recently popular analyst in the crypto community, author of PlanB’s S2F forecasting model, conducted a survey among his readers. Its topic was the main risks that Bitcoin may face.

Quantum computers, despite their destructive power, were only in second place. At the same time, the most terrible threat, according to members of the crypto community, was the regulatory pressure from the authorities. In the list of other dangers, netizens included the following items:

  • Centralized mining. The fact is that over 70% of the bitcoin hashrate is located in China. In the event that the PRC authorities gain control over local miners, the cryptocurrency network may be under threat.
  • Fraudulent software and hacks.
  • Derivative financial instruments.
  • Forks – new, improved versions of BTC.

What are the biggest risks for #bitcoin? Results of my latest poll show most of you (34%) voted government ban or regulation as biggest risk, followed by quantum computing (21%) and centralized mining in China (18%). Good to see we got rid of forks and futures manipulation fud. pic.twitter.com/zPWlEP4Z3H

– PlanB (@ 100trillionUSD) December 10, 2020

Summing up

Participants of the crypto community are divided into two camps: some believe that a quantum computer poses a threat to the digital asset market, others do not see a danger in the device..

Can Quantum Computers Break Bitcoin? – Quantum Computing Explained

Despite the fact that at the moment such machines function only at the state level, it is possible that in the future fraudsters will be able to get access to them..

What do you think Bitcoin’s top critic would do – Peter schiff – in case he had a quantum computer at his disposal? We propose to discuss the topic in our Telegram channel.

Disclaimer

All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..

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What is a quantum computer and how did a machine become a threat to cryptocurrencies
What is a quantum computer and how did a machine become a threat to cryptocurrencies
What is a quantum computer and how did a machine become a threat to cryptocurrencies
What is a quantum computer and how did a machine become a threat to cryptocurrencies

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