Quantum computers will eventually break much of today’s encryption, and that includes the signing algorithm of Bitcoin and other cryptocurrencies.
“If coins are eventually stolen in this way, then trust in the system will be lost and the value of Bitcoin will probably go to zero,” he says.
Today’s cryptocurrency market is valued at approximately $3trn and Bitcoin reached an all-time high of more than $65,000 per coin in 2021, making crypto the best-performing asset class of the past ten years, according to Gemini’s Global State of Crypto report for 2022.
There are four million Bitcoin addresses that could in theory be hacked by a quantum computer large enough to derive the corresponding private key to unlock and transfer the value to another address.
The second kind of attack – a transit attack – attacks Bitcoin transactions in transit.
In January 2022, a team at Sussex University spin-out company Universal Quantum published research on transit attacks, which calculated that it would require a quantum computer with a 1.9 billion qubit-capacity to break Bitcoin’s encryption in the required ten-minute window .
Cybersecurity is top of mind for those within the quantum community, but many industry insiders, including Barmes, believe there is not enough communication between the quantum computing community and the Bitcoin community to ensure future cybersecurity on the Bitcoin blockchain.
Barmes believes that as long as cryptocurrencies migrate on time then everything should be fine.
“Achieving this consensus is extremely difficult, so the governance issues are possibly equal to the complexities of the technical problems – agreement takes much more time than people think,” says Barmes.
Barmes is advocating awareness of the issues as the first stage in addressing the problem.
“That will give investors the information they need in order to make decisions.” The hope is that this transparency could encourage a more robust mitigation strategy.
While more mainstream investors may not be aware of the potential security issues arising from quantum computing advances on Bitcoin, Miko Matsumura, general partner at San Francisco-based Cryptos Capital, says most knowledgeable investors have priced in the risk of quantum cybersecurity breaches.
On the point of consensus, Matsumura is much more buoyant than Barmes.
On this more positive note, Duncan Jones, head of cybersecurity at Cambridge Quantum, says the conversation about risk needs to be more focused on how quantum technologies can enhance digital asset security.
This is a view reiterated by Charles Hayter, CEO and co-founder of CryptoCompare, who believes quantum computing cyber risk is not on the radar of the cryptocurrency investment community.
As for quantum cybersecurity mitigation strategies on cryptocurrency exchanges, he believes it is far too early for quantum computing to be an issue.Transitioning to post-quantum algorithms and conversations between the Bitcoin community and the quantum computing community will be key to mitigating the cybersecurity risk to cryptocurrency investment.