It’s time the crypto community faced up to the challenge of super-computing to their networks, says CoinDesk’s chief content officer.Read MoreFeedzy
One of my favorite descriptions of Bitcoin comes from that great oracle of this space, Andreas Antonopoulos. He called it a “sewer rat.”
Antonopoulos’s unflattering comparison is actually an expression of respect. He means Bitcoin is a survivor; its exposure to threats has allowed it to develop strong resistance to them, akin to how exposure to germs helps people develop immune systems. It has faced multiple crises – from Mt. Gox to China’s mining ban – and after each has emerged stronger, with an expanded hashrate, enhanced economic security, growing user numbers, falling transaction costs and more efficient processing.
You’re reading Money Reimagined, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. Subscribe to get the full newsletter here.
In many ways, the leaderless, amorphous ecosystem that drives Bitcoin forward embodies Nassim Taleb’s idea of an “anti-fragile” system (although Taleb recently became quite a prominent Bitcoin critic). It offers a good reason to believe Bitcoin will again bounce back stronger from the recent setbacks in cryptocurrency markets.
As many die-hard believers will tell you, Bitcoin’s durability is in large part a function of how hard it is to alter its protocol. As we learned from the block size wars, when a lobbying campaign by powerful interests failed to find support to increase Bitcoin’s data capacity, it takes an overwhelming consensus among both users and miners for significant code alterations to be adopted. That gives the system certainty and breeds faith in the provable scarcity it promises.
Still, it would be naive to think Bitcoin is entirely invulnerable to outside threats. In fact, one in particular that gets too little attention now looms larger than ever: quantum technologies. And in this case, Bitcoin’s “hard to change” characteristic could prove to be a bug, not a feature.
Quantum computing has been coming for four decades, delayed because of the highly complicated engineering challenge that sits before it can achieve, at scale, the kind of supercomputing powers it promises. That slow process is why some people, including many in the cryptocurrency industry, believe it will never come.
But recently, computer scientists have discovered uses for the field’s calculation techniques in conjunction with graphic processing units (GPU). They foresee powerful uses without having to wait for the development of an all-out quantum computer.
That has raised excitement around the possibilities posed by rapid processing of massive datasets to accelerate research into areas such as battery technology. It has also fueled concern the encryption systems upon which our digital economy depends are at risk of being broken by attackers wielding quantum tools.
So scientists are collectively working on the release of a set of open “post-quantum cryptography” standards to “quantum-proof” our computer systems. A recent article in Nature by a group of these scientists laid out a transition strategy backed by the U.S. National Institute for Standards and Technology (NIST) and its foreign counterparts.
A Biden administration memo last month outlined “key steps needed to maintain the nation’s competitive advantage in quantum information science (QIS), while mitigating the risks of quantum computers to the nation’s cyber, economic and national security.” It directed “specific actions for agencies to take as the United States begins the multi-year process of migrating vulnerable computer systems to quantum-resistant cryptography.”
One of the scientists behind this drive, Jack Hidary, the CEO of Sandbox AQ, is now on a mission to convince crypto developer communities to start the likely long process of transitioning to post-quantum standards before their blockchain protocols are rendered useless.
“This process of changing all the blockchains could take four or five years, and that’s part of the understanding of why we have to start this process now,” he said during an interview that ran in last week’s special World Economic Forum edition of the “Money Reimagined” podcast.
Bitcoin’s sewer rat resilience will not protect it here. Although its key pair system is built on Elliptic Curve cryptography (ECC), an advance beyond the ubiquitous RSA system of public key cryptography used in most encryption systems, research has shown that EEC will be unable to withstand quantum processing, Hidary says.
That means a third party could use a super-fast “brute force” quantum calculation to quickly uncover the private key you secretly guard to unlock and transact with bitcoins referenced on the public blockchain.
Will blockchain developers buy in?
To upgrade the code in a company-owned website, all that’s needed is for the CEO or chief technology to order their staff to do so. But you can’t meaningfully change a widely distributed, decentralized, open-source protocol whose value depends on a network of users unless a sufficiently large majority of participants adopts the code change.
We know, not only from the block size wars but also from how long it has taken for less-contentious upgrades such as Taproot to be adopted, that finding consensus in Bitcoin can be especially difficult and time-consuming – partly because there’s so much money at stake.
One would think that if these computing advances pose this kind of existential threat, change would happen rapidly. People will preserve something they are invested in, one would think.
But such an upgrade entails much more than just a few lines of code. It means overhauling the entire cryptographic foundation and requires the engagement of all players in the Bitcoin economy. It will take a lot of meetings, and a great deal of argument over Twitter and IRC to get everyone on board. Bitcoin’s resistance to change could prove a barrier.
Inevitably, some will mistrust these scientists making threats and promises. Companies like Hidary’s are offering services to solve these problems for blockchain developers. Is this fix as urgent as he claims? My head hurts thinking of the fights, the accusations, the conspiracy theories.
The truth is no one knows how long it will take for quantum to become advanced and accessible enough to pose a threat to blockchains. But can the community afford to wait?
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.