Quantum secure cryptocurrencies do not differ much from traditional blockchains in terms of how users interact with them. You can still trade them using a wide range of different tools including crypto automation and artificial intelligence trading. However, they have a much higher level of security and safety preventing bad actors from disrupting the economy once quantum computing becomes a reality. These cryptocurrencies enhance the security of blockchain technology by implementing quantum-resistant cryptography, which is crucial to protect against the vulnerabilities posed by quantum computing attacks.
At the moment, IBM is the closest to a working prototype of a true such computer capable of running the Shor’s algorithm that can quickly crack any cryptography using currently employed approaches:
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The Integer Factorization method where a positive integer is sequentially decomposed into its product until only prime numbers are left. To factorize any sufficiently large number, all existing algorithms have to conduct an enormous volume of operations. The scientific community does not have an efficient solution so this one allows for impenetrable cryptography for now.
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Discrete Logarithm problem used in ElGamal encryption system relies on the fact that mathematicians do not have an efficient common solution to calculating discrete logarithm values for a carefully selected set of large numbers. Since each number requires a different approach, finding an algorithm that can crack an architecture employing a variety of them is close to impossible.
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Elliptic-Curve Cryptography or ECC for short is an approach that assumes that there is no efficient way for existing computational architectures to calculate the discrete logarithm for a completely random EC element when the known base point is publicly known. This particular approach is employed by many chains including Ethereum.
All these concepts rely on the assumption that mathematicians won’t come up with solutions to the problems and that the technology will not advance to the point where Shor’s can be realistically deployed for calculations. While the former is likely true considering the limitations of standard computational hardware, the latter is an actual threat to the global security with may companies and governments racing toward building a usable computer capable of breaking through any encryption.
In an effort to prevent first strikes on existing ECCs and other similar cryptographic systems, several companies are preemptively building ways to protect them. The issue with the current landscape of the industry is that many platforms are playing the waiting game. For example, Vitalik Buterin said that Ethereum will no act until it experiences an actual attack. The plan is to roll-back the state of the network and start implementing protective measures.
The same idea is echoed throughout the whole community. The problem is that rolling back means compromising the immutability of ledgers which is another issue completely and will significantly affect the user confidence. Many experts argue that it is impossible for existing networks like Bitcoin to upgrade their architectures in a way that will be enough to protect them from the eventuality of the Shor’s.
Introduction to Quantum-Resistant Cryptocurrencies
Quantum-resistant cryptocurrencies represent the next frontier in digital currency security, specifically designed to withstand the formidable threats posed by quantum computing attacks. Unlike traditional cryptocurrencies, which rely on encryption algorithms that could be easily broken by quantum computers, quantum-resistant cryptocurrencies employ post-quantum cryptographic algorithms. These include lattice-based cryptography and hash-based solutions, which are engineered to ensure the security of transactions and protect against quantum threats.
The development of quantum-resistant cryptocurrencies is a proactive response to the potential risks that quantum computers present. These advanced machines, leveraging quantum superposition and entanglement, can solve complex problems at speeds unattainable by classical computers, posing a significant threat to current encryption methods. Quantum Resistant Ledger (QRL) is a prime example of a cryptocurrency specifically designed to provide robust security against quantum attacks. By integrating post-quantum cryptographic algorithms, QRL and similar projects aim to future-proof digital currencies, ensuring they remain secure in the quantum era.
Understanding Quantum Attacks
Quantum attacks are a new breed of cyber threats that exploit the immense computational power of quantum computers to break encryption algorithms and gain unauthorized access to sensitive information. Unlike classical computers, quantum computers use principles like quantum superposition and entanglement to perform calculations at unprecedented speeds, making them capable of solving problems that would take traditional computers millennia to crack.
These attacks can target the very foundation of digital security, including private keys, digital signatures, and encryption methods. The potential for quantum attacks to compromise these elements makes it imperative for the cryptocurrency industry to develop quantum-resistant algorithms and encryption standards. Institutions like the National Institute of Standards and Technology (NIST) are at the forefront of this effort, working on establishing post-quantum cryptographic standards to safeguard digital assets against quantum threats. By adopting these new standards, cryptocurrencies can ensure their security and resilience in the face of quantum computing advances.
Quantum-Resistant Blockchain solutions
While the threat from advanced advanced beyond our comprehension hardware is scary, many existing solutions like symmetric cryptographic frameworks and hash functions already have some properties that prevent theoretical instruments like Shor’s to be effective enough to endanger data safety. Even if attackers use workarounds to increase the speed of calculations with Glover’s algorithm or something similar, the answer to the threat is just increasing the size of keys.
Many experts believe that future-proof cryptocurrencies do not have to be different from what we have today but must be based on symmetric cryptography techniques. Otherwise, a complete overhaul of existing architectures is needed to make sure that digital assets are handled safely and cannot be stolen by someone who has access to potent hardware. Achieving consensus among cryptography experts and blockchain developers is essential to standardize quantum-resistant technologies and address vulnerabilities in cryptocurrencies.
Lattice-Based Cryptography
Lattice-based cryptography is emerging as one of the most promising approaches to post-quantum cryptography, offering robust security against quantum attacks. This method relies on lattice problems, which are mathematical constructs that remain difficult to solve even for quantum computers. The strength of lattice-based cryptography lies in its minimal security assumptions, making it a reliable foundation for developing quantum-resistant algorithms.
This cryptographic approach is utilized in various encryption algorithms and signature schemes, providing a high level of security and protection against quantum threats. For instance, Quantum Resistant Ledger (QRL) employs lattice-based cryptography to ensure its transactions are secure from potential quantum attacks. By integrating lattice-based cryptographic algorithms, QRL and similar quantum-resistant cryptocurrencies offer a promising solution for the future of digital currencies, ensuring they remain secure as quantum technology continues to evolve.
Building Quantum-Resistant crypto projects
Many interesting concepts were proposed as alternatives to existing cryptographic methodologies. These are mostly based on advanced techniques of key exchanges and exponential increases in the overall difficulty of mathematical problems required to crack keys. While the implementation of these concepts is still years away, some adventurous and boldly thinking developers are thinking about building their platforms with them in mind.
Here are some technological solutions that can be used to build quantum-resistant cryptocurrency:
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Lattice-based cryptography. In 2011, a researcher from the University of Cincinnati Jinai Ding proposed a new concept that we are now calling LWE (learning with errors) which is a way of encrypting keys with equations that have intentional errors in them to ensure higher security. The LWE problem is very hard to solve and we do not have any viable theoretical ideas on how to make the process of solving it faster. LWE, Ring LWE, and associated key exchanging and signature generation are core components of the Lattice-based method.
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Multivariate cryptographics rely on the complexity of equations, but we do not have ways to use the idea practically. Theoretical concepts like the Unbalanced Oil and Vinegar scheme which is known as the Rainbow are patented ideas that can revolutionize the way we encrypt data. However, only a handful of companies are interested in further development of quantum-resistant crypto projects that can benefit from multivariate equations.
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Hash-based approaches are old and numerous with Lamport and Merkle signatures proposed back in the 1970s. The biggest limiting factor is the number of signatures that can be assigned to a set of private keys. Using them for public decentralized ledgers is unviable. However, some research in this field indicates that it is possible to expand the concept and make it a little bit more flexible with unlimited-time in use schemes developed by the end of the 1980s.
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Code-based approaches make error-correcting systems from the old telecom era work in conjunction with encryption and signature schemes to create tamper-resistant data transferring protocols. While some experts believe that this technique is the easiest to implement in many existing digital infrastructures, meticulous investigations of optimized McEliece signatures based on the code-based approach have shown that they can be vulnerable to all sorts of attacks. Code-based cryptography, specifically the McEliece and Niederreiter algorithms, plays a significant role in post-quantum security. These systems are recommended by the European Commission's Post-Quantum Cryptography Study Group for their robustness against quantum attacks.
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Isogenic graphs of elliptic curves (yes, currently used ECC) can be used to build robust cryptographic frameworks. Some researchers think that this particular way of working with data is the next natural step in the evolution of widely used ECC key exchange techniques employed in a large number of different data-handling entities including decentralized chains and security applications.
The current scale of our industry is relatively small yet we have already experienced a number of spectacular security breaches which are now used as examples of how not to approach security in the DeFi sector. We have to remember that many existing solutions are very young and have to improve with trial and error. On the other hand, figuring out all the necessary security measures that can be used to protect users today only to be obliterated by the Shor’s ten years from now seems like a short-sighted agenda.
The battle of cryptocurrencies against quantum computing is not yet happening but it is on the horizon. Considering the fact that the number of crypto users is estimated to be around 550 million globally, it is more than important to start building resistant solutions today instead of tomorrow. A retail trader running a crypto AI bot or a huge institutional investor with a massive market making scheme — everyone will be in danger if the community of developers is not equipped to fight against innovative types of attacks.
The quantum computing cryptocurrency list
Despite what many enthusiasts say about their favorite chains and how they are secure and safe against all sorts of attacks, the number of chains that actually implement advanced cryptographic approaches in their architectures is incredibly low. At the dawn of the Bitcoin craze, developers were not concerned with the eventual evolution of computers and created digital environments without appropriate security measures. In the wake of the announcements from IBM and Google, many currently used architectures seem outdated. Other cryptocurrencies, like Cardano and Ethereum, are investigating the implications of quantum computing on cryptocurrency security and developing plans for future upgrades related to quantum resistance.
On the other hand, a handful of projects are using sophisticated cryptography hoping to become pioneers of the growing sector of the robust decentralized data-handling market in the future. Below are several interesting projects that may catch your attention if you are into the technological aspect:
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RL is the most notable name in the current race toward impenetrability with its use of hash-based signatures. The research in this field is still ongoing, as we mentioned previously, but many practically applicable solutions are used by QRL to create a truly secure decentralized architecture that prevents all types of attacks. The platform is marketed toward the general crypto audience as the next step in the evolution of the ecosystem and a potential competitor to networks that are unlikely to quickly respond to emerging threats.
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Nervos CKB is another interesting project that aims to implement various new cryptographic tools in the future. The biggest difference making its promise to protect users from potential future threats is that the very architecture of their virtual machine operating on a RISK-V computer is more flexible and allows for quick implementation of new technology without disrupting the interoperability. Note that the last point is one of the challenges that developers struggle to solve as making quantum-safe cryptocurrencies may affect their ability to share data with others hurting the ecosystem as a whole and isolating QS chains from peers.
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Algorand is considered by many the only project that is truly QS. However, the protection is afforded only to the data stored on the decentralized ledger while tokens in wallets are still in danger. The technology used by the developers of ALGO is shaky and needs to be further improved. On the other hand, the very fact that Algorand wants to look far into the future and build itself as a competitor to other chains ten years from now already puts it in a separate category of networks. Among projects named in this list, this one has the most valuable token in the market $ALGO with a $1.2 billion market cap. Hopefully, with enough time, holdings in wallets will become quantum-resistant crypto investments.
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IOTA with its unique Tangle architecture claims to be fully protected from all sorts of attacks thanks to the use of Winternitz One-Time Signature Scheme or WOTS for short. While the research of the method is still going strong, we do not have any theoretical types of attack capable of breaking through. While the current architecture is already secure, IOTA is focused on adding more layers of safety without compromising the performance. Right now, the native token has a sizeable $556 million market cap and reaches over $10 million in daily trading volumes.
The common denominator for these tokens is that they are mostly underappreciated and seem to struggle in the crypto market. The focus on providing security and development tools may sound great to an enthusiast, but there is no selling point to the general audience of end users who just want to use a safe and convenient token for their financial activities.
We strongly believe that the community should be supportive of initiatives aimed at improving the overall safety of digital infrastructures, but investing in tokens that do not have good track records is not something that anyone would honestly suggest. Among dev teams bragging about building the new quantum proof cryptocurrency, only Nervos CBK seem to be doing find. Other tokens have been on the downtrend for a long time despite loud promises.
Challenges that the industry faces
The implementation of appropriate response measures to the evolution of computational technology is riddled with difficulties. Imagine trying to steer a boat headed into an iceberg. If you notice the threat early and get the crew up in time, a tragedy can be avoided. Otherwise, the outcome looks grim. The problem is in the issues with controlling a boat that was designed to hit the iceberg initially and must be rebuilt while its traversing the ocean. Balancing efficiency with security and achieving consensus among stakeholders during the implementation process is crucial to ensure the successful implementation of quantum-resistant technologies.
Here are some problems that concern developers:
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New cryptographic systems based on sophisticated approaches like lattice-based or multivariate quadratic equations are nothing like currently adopted RSA or ECC. At the same time, they are far from maturity and commercial viability as promising systems like NIST are still in the phase of standardization and won’t be available until 2025. Making sure that existing digital architectures are ready for heavy modifications is another big issue. The process may prove to be too time-consuming and complex for many development teams.
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The calculations tend to be resource-intensive and make everything more expensive than what we have previously experienced increasing transaction prices across the board. Using some of the approaches results in longer keys and more demanding computation with some key sizes being literally a thousand times larger than existing RSAs. The increased computational load is one of the reasons why many experts predict economical unviability of many chains that will adopt these overly complicated methodologies as transaction times will increase and prices skyrocket.
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Issues with interoperability and backward compatibility will significantly reduce the effectiveness of decentralization as a whole. Legacy chains may not be compatible with the next generation of platforms. The necessity to preemptively build hybrid solutions to allow different infrastructures to communicate without compromising safety and performance is what makes many developers hesitant to start working on QS architectures. At the same time, stakeholders and DAOs must act in a coordinated manner to ensure quick implementation of new technology.
Current estimations of the timeline for actual threat are roughly 10 — 20 years leaving not much time to prepare if decisions are not made quickly and implemented effectively. In 2021, Deloitte conduced a survey of the multiple industries and found that over 61% of all organizations have plans to implement some form of QS measures in their digital infrastructures within the next five years. Unfortunately, we are firmly behind this deadline.
The importance for investors
The diversity of investment instruments in the decentralized economy allows retail traders to employ a wide range of strategies. It is quite normal for an individual investor to run a crypto trading bot for TradingView and work with hundreds of tokens simultaneously. The problem is in the sheer variety of digital assets that seem promising. Their numbers will likely only grow in the future with many projects lacking any meaningful protection from future attacks. The current price of Bitcoins is at risk due to vulnerabilities to quantum computer attacks, with over 4 million BTC potentially affected, highlighting the significant financial implications of these vulnerabilities. If we want to enjoy the same diversity years from now, it is a good idea to support developers focusing on QS solutions.