Chapter 13 investigates cryptocurrency and quantum computing. Bitcoin – the world’s first cryptocurrency - was released by Satoshi Nakamoto in 2009. Unlike conventional money, Bitcoin transactions are anonymous - maintained by a worldwide collection of computers operated by volunteers. Bitcoin took off on the black market but then migrated to legitimate business. The current value of all bitcoins is a staggering $41 billion. Strangely, no one knows who Nakamoto is – he, she, or they have yet to reveal themselves. Quantum computing was first proposed by physicist Richard Feynman in 1981. His idea was that the weird behaviour of sub-atomic particles could be exploited to perform computations. In theory, quantum computing allows huge numbers of calculations to be performed simultaneously. Google, IBM and others are now in race to build a practical quantum computer. Such a machine might well crack the encryption algorithms that currently underpin both the Internet and Bitcoin.
Chapter 13 investigates cryptocurrency and quantum computing. Bitcoin – the world’s first cryptocurrency - was released by Satoshi Nakamoto in 2009. Unlike conventional money, Bitcoin transactions are anonymous - maintained by a worldwide collection of computers operated by volunteers. Bitcoin took off on the black market but then migrated to legitimate business. The current value of all bitcoins is a staggering $41 billion. Strangely, no one knows who Nakamoto is – he, she, or they have yet to reveal themselves. Quantum computing was first proposed by physicist Richard Feynman in 1981. His idea was that the weird behaviour of sub-atomic particles could be exploited to perform computations. In theory, quantum computing allows huge numbers of calculations to be performed simultaneously. Google, IBM and others are now in race to build a practical quantum computer. Such a machine might well crack the encryption algorithms that currently underpin both the Internet and Bitcoin.
Quantum mechanics principles underpin quantum computing, signaling a major shift in how we process information. While it offers immense processing power and potential advantages, it also presents significant challenges for the cryptocurrency industry. This sector has grown rapidly, supporting decentralized finance and empowering users worldwide, but it also attracts malicious actors looking to exploit its vulnerabilities. Traditional cryptography remains strong, yet increasingly sophisticated computational attacks threaten security. As the cryptocurrency market expands, quantum computing offers both opportunities, such as improved transaction security, and risks, like easier decryption for hackers. Understanding quantum technology’s benefits and challenges is crucial as it develops. Currently, data is protected by traditional cryptography, but future, more powerful quantum computers could weaken this security. This article explores potential uses of quantum computing in daily life and business, explains its functions simply, and discusses societal impacts. Its goal is to help students and general readers understand how quantum technology might transform our world through clear language and real-life examples. Topics include the basics of quantum computing, its present and future applications across industries, and its societal effects. We provide a thorough analysis of how quantum computing could reshape society through mathematical insights, practical examples, and future perspectives.
The digital currency Bitcoin has had remarkable growth since it was first proposed in 2008. Its distributed nature allows currency transactions without a central authority by using cryptographic methods and a data structure called the blockchain. Imagine that you could run the Bitcoin protocol on a quantum computer. What advantages can be had over classical Bitcoin? This is the question we answer here by introducing Quantum Bitcoin which, among other features, has immediate local verification of transactions. This is a major improvement over classical Bitcoin since we no longer need the computationally-intensive and time-consuming method of recording all transactions in the blockchain. Quantum Bitcoin is the first distributed quantum currency, and this paper introduces the necessary tools including a novel two-stage quantum mining process. In addition, we have counterfeiting resistance, fully anonymous and free transactions, and a smaller footprint than classical Bitcoin.
Bitcoin is a digital currency and payment system based on classical cryptographic technologies which works without a central administrator such as in traditional currencies. It has long been questioned what the impact of quantum computing would be on Bitcoin, and cryptocurrencies in general. Here, we analyse three primary directions that quantum computers might have an impact in: mining, security, and forks. We find that in the near-term the impact of quantum computers appear to be rather small for all three directions. The impact of quantum computers would require considerably larger number of qubits and breakthroughs in quantum algorithms to reverse existing hash functions.
The key cryptographic protocols used to secure the internet and financial transactions of today are all susceptible to attack by the development of a sufficiently large quantum computer. One particular area at risk is cryptocurrencies, a market currently worth over 100 billion USD. We investigate the risk posed to Bitcoin, and other cryptocurrencies, by attacks using quantum computers. We find that the proof-of-work used by Bitcoin is relatively resistant to substantial speedup by quantum computers in the next 10 years, mainly because specialized ASIC miners are extremely fast compared to the estimated clock speed of near-term quantum computers. On the other hand, the elliptic curve signature scheme used by Bitcoin is much more at risk, and could be completely broken by a quantum computer as early as 2027, by the most optimistic estimates. We analyze an alternative proof-of-work called Momentum, based on finding collisions in a hash function, that is even more resistant to speedup by a quantum computer. We also review the available post-quantum signature schemes to see which one would best meet the security and efficiency requirements of blockchain applications.
This chapter examines the power of quantum computing, as well as the related concepts of quantum cryptography and teleportation. In 1982, the Nobel prize-winning physicist Richard Feynman noticed there was no simple way of simulating quantum physical systems using digital computers. He turned this problem into an opportunity—perhaps a computational device based on quantum mechanics could solve problems more efficiently than more traditional computers. In the decades that followed, computer scientists and physicists, often working together, showed in theory that quantum computers can solve certain problems, such as factoring numbers, much faster. Whether one can actually build large or even medium-scale working quantum computers and determine exactly what these computers can or cannot do still remain significant challenges.
Quantum computing is the primary concern against security and privacy issues; And it is known that no digital assets have provable ownership in the post-quantum age. As a digital asset or investing method, cryptocurrencies are not far from this fact. This study presents a practical and comprehensive framework to secure current cryptocurrencies against quantum computers by offering a hard fork. The currently-using cryptocurrencies can apply the mentioned hard fork for providing security in the post-quantum age. To keep the currencies’ previous values in their post-quantum forks, the mentioned hard fork is designed based on a 1-to-1 proof of burn (PoB) consensus: a hash function and hash-based signature as two quantum-secure tools, are applied to prepare the migration to the quantum-secure fork. For example, and to show that the hard fork works, the quantum-secure fork of Bitcoin (QBTC) will be presented and analyzed in the heuristic form.