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Quantum Computers And Cryptocurrencies

BitForex Editor
Oct 15, 2020

The need to use computers in the cryptocurrency scene is as old as blockchain's inception. In 2009, Bitcoin was introduced and so was its mining, which involves computers.  It started initially with the use of classical computers in verifying transactions forming each block. However, higher work rates and timeliness were demanded from these computers which they could not keep up with.

In the search for more computational power and a solution to speed problems, miners took hold of GPU(Graphics Processing Unit). This discovery did not remain relevant for long as ASIC quickly succeeded it. Now, a similar fate has befallen ASIC with the rise of quantum computers.

Classical Computers

Like the regular computers in our homes, Classical computers are run by the CPU. The CPU (Central Processing Unit) operates solely on the binary mode of 0s and 1s—in a two-way manner—like the "on" and "off" of a switch.

This set of computers encompasses large multipurpose computers used in various sectors including Bitcoin mining. The binary operation works discretely, with logic and sequence, to produce definite results.

The origin of mining accommodated the use of binary computers, but time has changed the narrative. Miners have to amass more computational power and step up their hash rate to stay competitive on the blockchain.  Quantum physics and its infinitesimal possibilities through qubits give them a head start.

Quantum Computers And Bitcoin Mining

A deep foray into the heart of quantum physics has brought about the invention of quantum computers. These computers are created to reign supreme over normal computers and supercomputers as well.

What was once fantasy came to reality at the end of 2018 when Google released the first of its kind, Sycamore. The company's model is recognized processing complex computational that would take normal computers thousands of years in 200 seconds. After the experiment held by a research team from the University of California, it was concluded that improvements on the features of classical computers are not far-fetched as this powerful system takes the world beyond a gradual transition. The quantum model is faster by a trillion times.

Similar to the binary system, quantum computers work with quantum bits or qubits involving 0s and 1s. However, either of zero and one can work as on or off simultaneously. This alternating behavior makes them adapt to the state of materials they come in contact with.

They have the following features:

1.Operation of super-light electrons with minimal power consumption.

2.Particles can exist at multiple, different locations.

3.With the spreading out of the particles, they are still merged resulting in a phenomenon known as entanglement.

Involvement With The Bitcoin

Bitcoin is a network open to miners to decide the transactions that go through or not. This process, in the beginning, was initiated by the founder, Satoshi Nakamoto, to ensure security and transparency on the platform. Constantly, miners busy themselves verifying a batch of transactions, a block at a time. The first person to build a block gets a haul of Bitcoin—12.5 BTC currently. Also, the lucky miner gets a lead on the building of the next block. All blocks in the blockchain are instinctively connected so action on one incites a ripple effect. Mining attracts a lot of computational power and lightning-fast processing to increase miners' chances. Thousands of miners are generating imitations of the target hash by the minute and the block difficulty rises approximately every 2 weeks.

Due to the above factors, newer devices are required in setting up mining rigs. From CPU to ASIC, the revolution of computers doesn't stop. In recent times, quantum computers have been introduced to ease mining in giant, seamless strides.

Advantages Of Quantum Computing Over Classical Computing

Energy conservation

With the employment of electrons, Bitcoin mining can go at an assiduous rate without negative effects on the environment. In the case of the GPU and ASIC, cooling fans alongside other temperature regulations have to be put in place. Large mining companies usually go in search of consistently cold climes so that they can work effectively all year long. Such movements are out of the picture in quantum computing. This technology allows mining at whatever location miners choose without energy challenges.

It is economical

Since quantum computers cut down on huge electricity bills incurred from running mining rigs. It is common to seek companies relocate their data centers to countries with cheap electricity rates nowadays. With quantum tech, they can diversify across different locations while recording more profits.

It imitates the vision of the Bitcoin

Decentralization connects people in different places and brings them together while they keep enjoying independence. It encourages people to desire a shot at Bitcoin mining. Meanwhile, there will be no cause for crowding as it can be done anywhere, and all efforts are cumulative.

How Quantum Computers Are Detrimental To The Blockchain

In no fresh news, Bitcoin is a decentralized system. Unlike the banking system, users are allowed to generate their addresses(accounts) which l serve as their point of transaction.

On the blockchain, accessibility to one's fund is guarded by a public and a private key.  The public key is the address that is visible to everyone on the blockchain while the private key is the combination of words that serves as a personalized passcode.  The pairing of the two keys is referred to as asymmetric cryptography. As is the status quo, public keys are used to verify private keys in a one-way function and only private keys give access to the public key. A reverse attempt, forcefully, is ridiculous as it takes so much time and effort.

Then in 1994, a mathematician Peter Shor formulated a quantum principle that defies the security code of asymmetric cryptography. Essentially, the principle must be carried out with large quantum computers and can be used to derive private keys for duplication of digital signatures.

This principle has ultimately put addresses with mined transactions at risk. Attackers latch onto such transactions and justle for preference by offering higher mining fees than that of the users which usually work out. The only safe option is to create new addresses from time to time. It takes about 10 minutes to mine transactions in comparison to around 8 hours used to fish out private keys so an initial attempt on hijacking a  Bitcoin address falls through. Another transaction on the marked address could be preyed upon.

Conclusion

Quantum computers are adaptive and pave the way for the future of cryptocurrency mining. It is already proving instrumental in the aviation and health care sectors. Surely, quantum computing will solve problems we never imagined could be resolved, with accuracy and timeliness. However, improvements on it may also bring massive destruction to the blockchain in terms of vulnerable transactions. Presently, 25% of the Bitcoin blockchain worth 40 million BTC is susceptible to breakdown by this powerful innovation. Only thoughtful steps taken by blockchain communities will keep them on the bright side of quantum computing.

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