Quantum computation represents a threat to many cryptographic protocols in operation today. It has been estimated that by 2035, there will exist a quantum computer capable of breaking the vital cryptographic scheme RSA2048. Blockchain technologies rely on cryptographic protocols for many of their essential sub-routines. Some of these protocols, but not all, are open to quantum attacks. Here we analyze the major blockchain-based cryptocurrencies deployed today—including Bitcoin, Ethereum, Litecoin and Z Cash, and determine their risk exposure to quantum attacks. We finish with a comparative analysis of the studied cryptocurrencies and their underlying blockchain technologies, and their relative levels of vulnerability to quantum attacks.
Blockchain and Distributed Ledger Technology (DLT) markets are predicted to be valued at $7.59 billion by 2024 [9]. Industries that have strong use cases include finance [10], logistics [11], and legal fields [12], with many large global corporations getting on board and integrating the technology: for example IBM [13], Morgan [14] and Amazon [15], with Facebook also announcing their own cryptocurrency Libra [16]. This technology removes the need for a trusted third-party to enable the transfer of data and assets.
Blockchains work on group consensus; the validity of a transaction is determined by a group of nodes that need not trust one another. The blockchain is managed by independent nodes that must reach consensus before updating the ledger with newly validated transactions. There are many mechanisms that enable a network to gain consensus, the most popular being Proof-of-Work (PoW) [17]. This consensus mechanism and underlying cryptographical techniques give blockchains their trustless ability. In general, blockchains work through the linkage of blocks in chronological order. These blocks are groups of transactions of information or cryptocurrency that nodes have broadcast to the network. This forms an immutable series of information, or a chain. Each block in the chain will contain a group of transactions and their information that has been declared to the network. This is generally through the transfer of tokens (cryptocurrency). These tokens hold intrinsic value like traditional fiat currencies—rather than simply hold information about that value like, say, a bank account balance. However, unlike tradition currencies, they are not minted by a central bank. Tokens are distributed to miners, who are nodes that form the group consensus and as such perform work on the network, as a reward for good work. This work primarily consists of creating the blocks in the chain as well as validating that the transactions are well-formed and are mathematically fair on the network, i.e. not creating or destroying tokens and not spending more than the user transferring tokens can afford. It is through this group consensus that the network and underlying economy of the network can function fairly and independently of any central authority.
Blockchain technologies can be simplified down to two constituent parts, the consensus protocol and the transaction mechanism. The transaction mechanism is how actors transfer tokens and information; this requires them to provide a digital signature in order to authenticate that they possess the public and private key used to create the digital signature. The consensus mechanism dictates how the verifier or mining nodes on the network agree on the next blockchain update, which transactions are added, and whether the transactions and the block are cryptographically and structurally valid.
PoW is the most commonly used consensus mechanism within a blockchain. PoW requires a miner to prove that they have committed a certain amount of effort through the expenditure of computing resources to generate the new block. This mechanism was adopted by Bitcoin forcing the miner, while compiling transactions into a block, to perform some work, i.e. spend computational and financial resources to solve a problem. This incentivizes the miner to generate a valid block containing only valid transactions. This work is also easily verified by any node connected to the network. This expended energy guarantees that a cost is associated with creating a block. Careless or malicious miners that expend the energy to complete a PoW algorithm but have created a bad block (a block that includes at least one transaction that if included into the chain would create a wrong state, e.g. spending over a user’s balance) will be discovered by other nodes in the network. The block will be invalid and this would not be considered by other miners as part of the main chain, leaving the miner financially worse off, as they would receive no mining reward. This ensures the validity of the information contained within the block that is considered by the network as the head of the current longest chain (the block to which miners will attempt to append the next block in the chain). The hardness of this PoW determines how quickly each block is added to the chain: if the hardness of the problem increases, then it will take miners longer to solve the problem, as it will require more work to be performed by the mining nodes [18].
The Chinese blockchain platform, Chain Maker, recently declared that the company has successfully built a new technology that can withstand assaults from both conventional and quantum computers. Developers of the company’s blockchain network, also known as Chang’An Chain, demonstrated that the new technology aims to secure information transmission between financial forms, making online transfers more efficient and secure. The system was released in China back in January 2021, as the country’s first independent blockchain platform, developed by the state-backed Beijing consortium, which is the Beijing Academy of Blockchain and Edge Computing.
The company used some of the smartest tech algorithms. Quite similar to other blockchain networks, the digital list of records will be maintained in blocks, each will include the transaction time and date, which will be difficult to update after being discovered. With the growing dominance of quantum attacks, this initiative might just provide the perfect opportunity for businesses to protect their blockchain networks. To counter potential quantum computing attacks, the company has developed classical cryptographic algorithms called post-quantum cryptography, along with a quantum key distribution system.
The world needs much stronger, yet simpler encryption to tackle robust quantum attacks. According to reports, the consortium of developers has installed about 96-core blockchain processors that make signature verification 20 times quicker and smart contract processing 50 times faster on the network. With China’s growing dependence on blockchain, this technology might just be the right step to advance the industry.
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