How quantum computer can increase bitcoin

Copyright © HT Digital Streams Limit all rights reserved. About a quarter of all Bitcoins are now protected with algorithms that can be cracked by quantum computers within five or ten years, (AFP via Getty Images) Summary Hackers can get a superpower. Will the crypto industry be ready? Two of the breakthrough technologies of this century are on a collision course. Investors in Bitcoin should pay attention. Experts believe that Ultrap Governed Quantum computers can eventually crack the security codes of Blockchain, the underlying technology for bitcoin. It would be a dream of a hacker. And it can handle a serious blow to investors’ confidence in the $ 2 trillion plus for the leading cryptocurrency. About a quarter of all Bitcoins are now protected with algorithms that can be cracked by quantum computers within five or ten years, Gartner analyst Avivah Litan tells Barron’s analyst. It is mostly older bitcoins dating back to digital safes, or wallets, up to 15 years. As quantum computer continues, the damage can spread to newer wallets, and then to the broader structure of the market. The computers “can eventually get so fast that they will undermine the Bitcoin transaction process,” experts wrote at Deloitte. In consequence, hackers can begin to rewrite the history of trades. The crypto industry knows about these risks and prepares them to defend itself. “There are very strong incentives to protect the value in bitcoin’s network and drive the development of quantum -resistant technology,” says Litan. In the end, the best weapon of the industry for the fight can be quantum calculations. Some firms are already working on it. The large, unanswered question is how quickly quantum develops. That is, how soon can the Blockchain security features meet their match? Will the industry complete its preparations on time? Of the two technologies, blockchain is the easier to understand. It is essentially a digital record -keeping system consisting of ‘blocks’, each of which contains details about validated transactions. Every time an entry is created and verified, a block is added. This is the beating heart of the Bitcoin market. The concept of a blockchain has been in existence since the 1990s, when computer scientists Stuart Haber and W. Scott Stornetta proposed the first system in the time stamp data using cryptography. In October 2008, a mysterious, faceless developer (or developers) published the name Satoshi Nakamoto a white paper containing a ‘peer electronic cash system’ that would become the prototype for the blockchain network. While this is happening, Nakamato’s interest-the most bombastic estimates at 1.1 million Bitcoins or about $ 128 billion can be vast for the first wave of any quantum-based attacks. This is because it is believed that the assets have been hidden in the kind of older, digital safes that are considered the greatest danger since 2010. Quantum computer science, under development since the 1980s, is derived from quantum mechanics. And what exactly is it? The pioneering physicist Richard Feynman may have put it the best: “I think I can safely say that no one understands quantum mechanics.” The remark, which is part of a lecture at Cornell University in 1964, cried from the audience, but the sentiment is still true today, even if hype is about the technology on Wall Street. A collection of small, volatile quantum computer stocks has become some of investors’ favorite speculative toys. Generally, the quantum computer aims to take traditional computer to a completely new level. It seeks to solve major, complex statistical problems by investigating large numbers of variables at the same time. A typical quantum system consists of a bulky, fridge -like shell containing a nesting hardware. At its core, a quantum processor sits, usually no bigger than a pettyness. Information is coded by quantum pieces, or ‘Qubits’, created by manipulating and measuing subatomic particles such as electrons, photons and ions. As Qubits make these particles exist in multiple conditions at the same time, quantum computers can perform calculations beyond the reach of traditional machines. Theoretically, it can be used for everything, from the traffic jams of a city’s traffic jams to the discovery of new cancer treatments. And for cracking of cryptographic algorithms. “This is one of the cases where the features of quantum mechanics are used to do things that are very hard or time intensive-and basically impossible-other,” says Thomas Ehmer, co-founder of the quantum interest group at Merck Kgaa. For attackers it is the ‘Holy Grail’, says Ehmer. Quantum computers, he adds, can work in a ‘hyper-effective’ way to peel away the low numbers that form the core of blockchain coding. For most cryptocurrencies, the core is based on pairs of keys – a public key and a private key that is mathematically linked. The public key is used for coding, or to scramble data to protect it from greedy eyes, while the private key is used for decking, or turns it back into a readable format. Think of a public key like ‘NE mail address or a username. Anyone can see and share it, and each can use it to encrypt data. However, only the containers of the corresponding private key can decrypt the data. The security of coding depends on the problems of importing large numbers, or dividing a number into smaller prime numbers that, if multiplied together, equals the larger number. Current technology cannot do this, but a fully realized quantum computer can and in a surprisingly short time. “It’s like having a superpower that allows you to quickly choose a lock that would take a normal person to try for millions of years,” Ehmer says. Attempts have been made to crack the code. In an article of 2024, Chinese scientists claimed to have used a system of D-wave Quantum to break RSA coding, which is used in online bank transactions and VPN connections. However, the experiment was performed on a relatively small scale and was not considered a great progress. Yet the fear is clear in the consciousness of the crypto industry. Blackrock, the world’s largest asset manager, warned against the arrival of more powerful computers when he was prepared to launch a bitcoin scholarship fund in 2024. In a filing at the Securities and Exchange Commission, the firm noted that ‘quantum computer science could result in the cryptography underlie the bitcoin network that becomes ineffective, which, if realized, can lead the security of the Bitcoin network for shareholders. Similar language appears in BlackRock’s filing up to 2023. How real is the risk? Some three -quarters of Bitcoins have an extra layer of cryptography that keeps them out of imminent danger. However, according to Michael Osborne, chief technology officer at IBM Quantum Safe, the threat is nothing to mock. “Assets can be stolen from existing wallets if no simple actions are taken to protect them,” says Osborne. The most immediate solution may be to move funds from old or reused addresses to new wallets that have not exposed their public keys, pending the day that quantum computers get the ability to determine a private key using a public key. As Quantum develops in the coming years, protective measures may be more difficult to devise. Hackers can get the tools to disrupt Bitcoin mining and the basic market operations, such as rewriting transaction history. Gartner’s Litan says some experts place the chance that it takes place at 50% by 2037. “There is a strong consensus in the Bitcoin community that preparation is now essential to prevent future disaster, although some consider the threat as overheated,” Litan says. Regardless of the difference of opinions, developers do not sit idle. On the contrary, they kicked off a digital arms race even before the true conflict began. “It is very well known that the bad actors will try to use quantum computers to break classic coding,” Rajeeb Hazra, CEO of Quantinuum, tells Barron’s. “But the same tool can also be used to create better algorithms.” The child of Honeywell Quantum Solutions and a boot of the UK, based in the UK, was created by a merger in 2021. The firm received an initial $ 300 million investment from Honeywell International and released its first product-a random number-generator with cyber security applications in December of that year. In March 2025, Quantinuum worked with researchers at JPMorgan Chase for an experiment that demonstrates how a quantum computer can make a classic machine best at a random number-generation problem. As random numbers are used in everything from computer simulations to cryptography, the study had important implications in the real world. “The race will remain forever, isn’t it?” Said Hazra with a crazy. “We see it in the classic world, and we will see that it is taken to the next level with Quantum.” Researchers at D-Wave Quantum have approached the challenge by developing a blockchain architecture that works on quantum computers. “The distributed nature of the Bitcoin network is based on a lot of miners working together and anyone doing a hard cryptographic puzzle, who requires a lot of classic calculation power,” explains Trevor Lanting, D-Wave’s chief development officer. Blockchains rely on hashing, a mathematical function that acts like a digital fingerprint by turning an input into a string of characters. Hashing is used to cod transactions, and ‘proof of work’ algorithms confirm the transactions. D-Wave aims to replace this process with a quantum voucher of work, which describes the company as a new way to create hashes safe and efficient. In a pre-print presented to the ArxIV research division platform in March, scientists showed how they tested a prototype blockchain on four D-wave processors spread across North America, “demonstrating a stable operation over hundreds of thousands of quantum operations.” The race is far from over. IBM insights suggest that cryptographically relevant quantum computers can arrive over a decade, while some organizations expect it to take up to 12 years to become quantum resistant. There is an expression in the crypto community that can be appropriate here: ‘hodl’, or keep on for dear life. Write to Mackenzie Tatananni on mackenzie.tatananni@barrons.com, catch all the business news, market news, news reports and latest news updates on live currency. Download the Mint News app to get daily market updates. More Topics #Bitcoin Read Next Story