Many cryptocurrency experts are wondering: can the crypto industry survive the next technological revolution? This article explores modern cryptographic methods used to secure financial transactions and the internet, which may prove powerless against a sufficiently powerful quantum computer. It also discusses how vulnerable cryptocurrencies with market capitalizations in the hundreds of billions of dollars may be. Research shows that the Proof-of-Work (PoW) algorithm used in Bitcoin will remain relatively resistant to quantum attacks for the next 10 years, thanks to the high speed of specialized mining hardware. However, the elliptic curve digital signature system used in Bitcoin could be compromised as early as 2027.
As an alternative, the Momentum algorithm is considered, which is more resistant to quantum computing. Other security methods are also analyzed that could ensure the safety and efficiency of blockchain applications in the future.
Overall, research results indicate that quantum computers pose a serious threat to cryptocurrencies, and new protection methods must be developed to ensure their security in the future. As an example, the article examines the process of compromising and extracting the secret Nonce K value from a vulnerable RawTX transaction using BitcoinChatGPT machine learning.
Bitcoin is a decentralized digital currency, secured by cryptography, that has existed since 2008 and inspired the emergence of many other cryptocurrencies. Its security is ensured by the Proof-of-Work mechanism and elliptic curve signatures. However, the development of quantum computers presents a serious threat to Bitcoin and all modern cryptography used on the internet and in financial transactions. Research shows that Bitcoin’s Proof-of-Work algorithm is relatively resistant to quantum attacks for the next decade, but the elliptic curve digital signature system is vulnerable to Shor’s algorithm and could be cracked as early as 2027. This would allow attackers to obtain secret keys from Bitcoin transactions. As a solution, alternative algorithms such as Momentum for Proof-of-Work and quantum-resistant signature schemes are proposed. In general, quantum computers are a serious threat to Bitcoin, and new protection methods must be developed. Quantum computers could crack Bitcoin within five years, potentially resulting in the loss of more than $3 trillion on cryptocurrency and other markets and triggering a deep recession.
Bitcoin Fundamentals and Security Principles
This section explains how Bitcoin works to make it easier to understand possible attacks using quantum computers. All transactions are recorded in a public ledger-the blockchain. Transactions are grouped into blocks, which are considered to have occurred simultaneously and are arranged in a chain. Each block contains a reference to the previous one in the form of its hash. New blocks are added by miners using the Proof-of-Work (PoW) mechanism. Bitcoin uses the Hashcash algorithm. Miners look for a block header such that its hash is less than a certain value. The header contains information about the transactions, the previous block’s hash, a timestamp, and a random number (nonce). The difficulty is automatically adjusted so that a block is found approximately every 10 minutes. Bitcoin uses double SHA256 hashing.
Miners choose which transactions to add to a block and receive a reward in bitcoins for doing so. When a miner finds a suitable header, they notify the network, and the block is added to the blockchain. Verifying the correctness of a PoW solution is simple-just calculate the hash once. The PoW mechanism ensures that no one can forge the blockchain, for example, by double-spending coins. The blockchain can branch, but miners continue working with the longest chain. A transaction is considered confirmed when six more blocks have been added after it. The article discusses what advantage a quantum computer might have in solving the PoW problem and whether it is possible to forge the blockchain. The structure of transactions is also considered: to send bitcoins, the recipient creates a key pair, and the public key is hashed to save space. To send bitcoins, the sender specifies the transactions in which they received coins and proves ownership by providing the public keys and a signature with the private key. Using the hash of the public key instead of the key itself affects Bitcoin’s resistance to quantum attacks.
Attacks on Bitcoin’s Proof-of-Work
A quantum computer can be more efficient than a conventional one in mining Bitcoin, as Grover’s algorithm allows for much faster hash searching. However, modern ASIC miners are so fast that this advantage of quantum computers is offset by their currently low speed. In the future, if quantum computers can operate at 100 GHz, they could solve the PoW problem about 100 times faster than now. But this is unlikely in the next 10 years. By then, classical computers will also be faster, and quantum technologies will be more widespread, so no one will be able to monopolize mining. To assess blockchain security, it is important to understand how much computing power a quantum computer would need to solve the PoW problem with a probability above 50%. Thus, although quantum computers could theoretically speed up mining, in practice, due to technological limitations, they do not yet pose a serious threat to Bitcoin. However, in the future, this threat may become real, and appropriate security measures must be developed.
Calculating SHA256 on a quantum computer requires converting logical operations into reversible quantum ones, which complicates the process. Quantum computers also require error correction, which demands additional resources and time. The mining speed on a quantum computer depends not only on Grover’s algorithm but also on many other factors: clock speed, error rate, complexity of error correction algorithms, and the number of qubits used. The article introduces the concept of “effective hash rate” for a quantum computer, taking all these parameters into account. Analysis shows that, at the current level of development, quantum computers are significantly slower than specialized ASIC miners in terms of hash rate. However, quantum technology performance is expected to grow.
It is clear that it will take time before quantum computers can surpass classical machines in mining. Even when this happens, no single quantum computer will have overwhelming advantage. However, even a slight power advantage could make certain attacks profitable, such as on mining pools that use smart contracts.
Attacks on Signatures
Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA) on the secp256k1 curve. The security of this system is based on the difficulty of the Elliptic Curve Discrete Logarithm Problem (ECDLP). Classically, this problem is considered hard, but Peter Shor proposed an efficient quantum algorithm for solving it.
This means that a sufficiently powerful universal quantum computer will be able to efficiently compute the private key from the public key, making such a scheme completely insecure.
- Address reuse: To spend bitcoins from an address, you need to reveal the associated public key. Once it is revealed and quantum computers exist, the address becomes insecure, so it should not be reused. In practice, this rule is often violated, and such addresses become vulnerable.
- Spent transactions: If an address that has not previously spent coins sends a transaction and it is confirmed by several blocks, such a transaction is relatively protected from quantum attacks. The private key can be computed from the published public key, but since the address is already spent, the attacker would additionally have to overcome the PoW protection to double-spend.
- Raw transactions: After a transaction is sent to the network but before it is recorded in the blockchain, it is vulnerable to quantum attack. If the private key is computed before it is recorded in a block, an attacker can send a new transaction from the same address to their own wallet and, if their transaction is included in a block first, steal all the funds. This is considered the most dangerous scenario.
To assess the risk, it is important to know how long it would take a quantum computer to solve the ECDLP and whether this is comparable to the block generation interval. According to modern research, under certain parameters, a quantum computer could crack a Bitcoin signature in 30 minutes, making the system extremely vulnerable. The article’s graphs show that by 2027, a signature could be cracked in less than 10 minutes.
Prospects for the Development of Quantum Attacks
The article describes attacks on the Bitcoin protocol using known quantum algorithms and error correction schemes. Although some estimates of quantum computers’ speed and scalability may seem optimistic, it is important to remember that there are several ways to increase their performance. For example, using other error correction codes can significantly speed up calculations. It is also possible to reduce the number of logic gates in quantum circuits as technology advances. Some quantum algorithms allow for faster solutions to the discrete logarithm problem through parallelism.
Although quantum attacks on Bitcoin now seem difficult, we should not relax: technology will develop, and attacks will become more realistic.
Countermeasures: Alternative Proof-of-Work Schemes
Quantum computers can use Grover’s algorithm to perform Proof-of-Work in Bitcoin, allowing them to search options in quadratically less time than classical computers. This section considers alternative Proof-of-Work schemes that may be less vulnerable to quantum attacks. The main requirements:
- Ability to adjust the difficulty of the task.
- Asymmetry: verification of the solution should be easier than finding it.
- No significant quantum advantage.
Alternatives include memory-hard schemes such as Momentum, Cuckoo Cycle, and Equihash. They are based on finding collisions in hash functions or subgraphs in random graphs. For such schemes, a quantum computer does not get the quadratic speedup provided by Grover’s algorithm, making them more resistant to quantum attacks.
Post-Quantum Digital Signature Schemes
Many public key digital signature schemes have been proposed in the literature that are believed to be resistant to quantum attacks: hash-based (LMS, XMSS, SPHINCS), code-based (CFS, QUARTZ), multivariate polynomial (RAINBOW), and lattice-based (DILITHIUM, NTRU). In the context of blockchain, the length of the signature and public key, as well as the verification time, are important. The most reasonable options are hash-based and lattice-based schemes.
To protect against quantum computers, hash functions and mathematical lattices are most often used.
- Hash functions: provably secure, but quantum computers can speed up their cracking.
- Lattices: appear more promising, but some algorithms (such as BLISS) are vulnerable to side-channel attacks.
Assessing Overhead for Error Correction in Quantum Attacks
To estimate the resources required for a quantum attack on a blockchain or digital signature, the number of specific quantum operations (T-gates, Clifford gates) and error correction methods are considered. Under optimistic forecasts, the cracking speed could increase significantly if quantum computers learn to correct errors quickly and efficiently.
Modeling the Growth of Bitcoin Network Power and Quantum Computers
The article analyzes how the Bitcoin network’s computing power (hashrate) changes and how this affects mining difficulty. Two scenarios are considered: optimistic (exponential hashrate growth) and less optimistic (linear growth). The higher the hashrate, the higher the mining difficulty.
For quantum computers, forecasts are also made: in the optimistic case, the number of qubits doubles every 10 months; in the pessimistic case, every 20 months. It is expected that the frequency of quantum gates will increase to 50 GHz (optimistic) or 5 GHz (pessimistic). In addition, the error rate will decrease, but there is a limit below which it will be difficult to improve accuracy.
Example of Finding a Critical Vulnerability in a Transaction
To find a RawTX vulnerability, machine learning methods can be used, such as BitcoinChatGPT. This tool helps analyze Bitcoin transactions for vulnerabilities using cryptanalysis and artificial intelligence methods.
As an example, the creation of a vulnerable Raw transaction for a specific address is considered, obtaining the hash of the public key, forming a vulnerable transaction structure, and analyzing its data. Then, using services and scripts, it is shown how to extract the Nonce K and private key values from the vulnerable transaction using a formula and specialized calculators.
Result Verification and Conclusion
After obtaining the private key, it can be verified using machine learning and specialized services. The article shows the full process-from creating a vulnerable transaction to extracting the private key.
