Technology and Innovation Community

New report from BlackRock on Quantum Computing and Blockchains (link below).

report

Exec summary:

• Quantum computing is likely to be a manageable risk for blockchains, subject to the industry's ability to upgrade swiftly and proactively to post-quantum cryptography in the coming years.
• Nearly half a century after Quantum Computing's conception in the early 1980s, the field is making progress on its journey from theory to reality, driven by ongoing hardware scaling and algorithmic innovation. 
• Cryptographers and security researchers have long recognized emerging security risks posed by future quantum computers. Perceiving the quantum threat early, the National Institute of Standards and Technology (NIST) launched its Post-Quantum Cryptography (PQC) Standardization initiative in 2016, scrutinizing dozens of encryption candidates against both classical and quantum cryptoanalysis through a multi-year, global competition. This culminated in the selection of the first three lattice- and hash-based federal post-quantum standards in 2024, with additional evaluations underway. Concurrently, government agencies and large technology organizations worldwide have refined their postquantum transition roadmaps and target migration timelines as more credible PQC standards emerge.
• Cryptocurrencies are often one of the first topics discussed in the context of future risks from quantum computing, in large part because they represent the most readily monetizable "honey pot" for an attacker with a future CRQC to target.  Evident in the name, Cryptocurrencies rely on cryptography to secure their blockchains, record transactions, and prove ownership. In the case of Bitcoin, the cryptographic hash function used to secure the core blockchain transaction history is called SHA-256, which is generally considered to be substantially resistant to quantum computing, with Grover's Algorithm (developed by Lov Grover in 1996) offering only a modest speed advantage for a quantum computer over classical computing.  However, the cryptography used to secure individual transactions on Bitcoin and most other major blockchains, including Ethereum, currently employs digital signature schemes secured by Elliptic Curve Cryptography, making them likely quantum-vulnerable at some point in the future. 
• PQ migration for cryptocurrencies is eminently addressable from a technical standpoint, and the key challenge is one of timely coordination and implementation.
• Different blockchains face varying challenges of technical difficulty and development coordination for PQ migration. 
• Ultimately, the team at BlackRock views implementation PQC signature schemes in Bitcoin as a much lower hurdle compared to the many remaining technical challenges towards a functional CRQC, recent algorithm progress not withstanding. 

#Quantumcomputing #Digitalassets #innovationcommunity

- Todor