Is Blockchain Already Obsolete? Quantum Computing and the Demise of DLT (2024)

Blockchain technology has long been hailed as the pinnacle of decentralised systems, promising immutable ledgers and secure transactions. However, the emergence of quantum computing presents a formidable threat to this seemingly invulnerable infrastructure. Delve into the looming intersection of quantum computing and distributed ledger technology (DLT), exploring the issue of blockchain’s sustainability in the face of this disruptive force

Government, healthcare, supply chains, media, financial institutions — blockchain promises to be all things to all people. A decentralised and distributed ledger technology (DLT), it allows for transactions to be recorded in a secure, transparent, and immutable manner, ensuring that, unlike traditional systems, no single entity has complete control or authority (proponents often describe it as “trustless”). And it is precisely because of its combination of decentralisation, cryptographic security, and immutability that governments, business, and investors have been racing to adopt blockchain technology. However, in their haste, have they overlooked its Achilles heel?

As with blockchain, the advent of quantum computing has elicited breathless speculation about its potential to re-shape various ecosystems. But continued advances in the development of quantum computing have raised concerns over its potential impact on the security and viability of blockchains. At issue is whether the power of quantum computing will be able to decrypt the complex algorithms — or cryptographic building blocks — that secure every blockchain.

All of this necessarily begs an important question. If the very cornerstone of blockchain and DLT, namely asymmetric elliptic curve cryptography, can be defeated by quantum computing, are we already in a post-blockchain world?

Quantum computing — or the combination of physics and computer science — leverages the principles of quantum mechanics to perform calculations at an exponentially faster rate than classical computers. This computational power, however, threatens traditional cryptographic methods that underpin the security of blockchain networks because these networks use non-quantum resistant cryptographic algorithms.

Among current encryption protocols, the most used asymmetric algorithms for digital signatures and message encryption (i.e., RSA, (EC)DSA, and (EC)DH) will become vulnerable, as quantum computers develop the ability to efficiently solve these problems. According to one study by researchers in Singapore, Australia, and France, the cryptographic algorithm used by Bitcoin, or what is known as the Elliptic Curve Digital Signature Algorithm (ECDSA), to ensure the safe ownership of bitcoin could be defeated in a mere ten minutes by a sufficiently large quantum computer.

It appears that quantum computing may be able to accomplish what the seemingly endless number of scams in the crypto space has been unable to do — to bring about the demise of cryptocurrencies.

Classical computing uses binary digits or “bits” as the basic unit of information, and these bits come in one of two forms, either as the number 0 or the number 1. It might be helpful to think of a light switch that has one of two positions: either on or off. A pair of bits, therefore, has four possible combinations: 0–0, 0–1, 1–0, or 1–1, and virtually all current computing algorithms are based on the processing of these binary digits.

Quantum computing, on the other hand, uses quantum bits or “qubits,” which can exist simultaneously (a property referred to as “superposition”), meaning that they can be 0 and 1 at the same time. A single pair of qubits, then, can accommodate all four possible values of bits, with exponentially more possibilities as the number of qubits increases. In addition, the phenomenon of “entanglement” means that qubits can become entwined or linked (this entangled two-qubit state is known as a Bell state), enabling correlations and interactions that classical bits cannot achieve.

For this reason, quantum computers have the potential to solve certain problems exponentially faster than current computing technology, creating revolutionary possibilities, one of which is arguably the end of blockchain and DLT technology.

For all of its revolutionary promise, quantum computing comes with a unique set of challenges. Qubits, for example, are sensitive to their environment to such an extent that slight disturbances can result in the loss of their quantum properties (otherwise known as “decoherence”). This, in turn, requires reliable error correction techniques (still under development) to redress the accumulated errors and degradation in computational quality.

Scalability also presents a problem. Today’s most advanced quantum computers are relatively small, with between 50–100 qubits, and are difficult to scale due to decoherence and the limitations of currently available hardware and software development tools. Due to these challenges as well as the high costs and a comparatively small quantum workforce, quantum computing is in many respects still in its infancy.

But impressive advances are being made. In 2019, Google claimed that its advanced computer, using a Sycamore quantum processor, achieved “quantum supremacy” for the first time (Sycamore contains 54 qubits). It was able to perform a specific task in 200 seconds. By comparison, it would have taken the world’s best supercomputer 10,000 years to complete the same task. (Yeah, the gains are that impressive.)

IBM appear to be the gold standard at the moment, with its Osprey computer at 433 qubits, but the upcoming release of its Condor processor will up the number of qubits to 1,121. In 2025, the company expects to release their Kookaburra processor, which will create “a quantum system of 3 Kookaburra processors totalling 4,158 qubits.”

Will 100,00+ qubits be realised in the not-so-distant future?

Both Shor’s algorithm and Grover’s algorithm are examples of quantum algorithms that could indeed impact the cryptographic integrity of bitcoin (and other cryptocurrencies), thus compromising blockchains in general.

Named after the American mathematician Peter Shor in 1994, his eponymous quantum algorithm makes it possible to find the prime factors of a large integer efficiently, which could possibly breach RSA encryption, one of the most used encryption schemes (the assumption behind RSA encryption being that such factoring is impossible). Therefore, a powerful enough quantum computer deploying Shor’s algorithm could, at least theoretically, break the vast majority of asymmetric encryption being used today.

Developed in 1996 by Lov Grover, Grover’s quantum algorithm can be used to solve unstructured search problems (sort of like looking for a name in an unordered phone book — remember those?). Because it is faster than classical computing, it could be used to speed up brute force attacks on symmetric-key cryptography.

As CTO Charles Guillemet and Security Engineer Victor Servant, both of cryptocurrency hardware wallet Ledger, summarise, “In essence, both algorithms pose potential dangers to cryptography. Shor’s algorithm simplifies the process of factoring large numbers, making it easier to uncover a private key connected to a public key, and Grover’s algorithm is capable of compromising cryptographic hashing more efficiently than current computers.”

Lasciate ogne speranza, voi ch’intrate. As we stand at the threshold of blockchain’s future, as Dante stood at the beginning of his journey, should we abandon all hope in the face of quantum computing’s sheer power? Not necessarily.

The development of quantum-resistant cryptographic algorithms is crucial to safeguarding blockchain networks against quantum attacks, and ongoing research is yielding promising possibilities. The Quantum Resistant Ledger (QRL) is one example of a blockchain that is secured by XMSS, an NIST-approved post-quantum secure digital signature scheme.

IOTA, a decentralized ledger designed for the Internet of Things (IoT), implements hash-based signatures, specifically the Winternitz one-time signature scheme, and is quantum resistant as a result. (IOTA is not a blockchain, but rather a direct acyclic graph (DAG), though.)

And as researchers reported in an article on quantum-resistance in blockchain networks, “A group of scientists developed the MatRiCT lattice-based quantum resistant protocol built on ring confidential transactions (RingCT) which is the protocol used by Monero cryptocurrency to hide transaction amounts.” The following year, Monero’s developers conducted a research exercise exploring post-quantum strategies to secure the network. According to their findings,

“Promising techniques include zero-knowledge lattice cryptography based on the shortest vector problem. Methods such as hash-based ring signatures, GLYPH (Schnorr-like lattice-based signature scheme), and the cohort of NIST post-quantum candidates were all designed to enable security in a post-quantum world. The quantum resistant ledger is of particular interest due to its extensibility, immutability, and RandomX integration — however no privacy features are currently implemented.”

Nevertheless, despite these positive advances, transitioning to quantum-resistant cryptography still presents a challenge due to the need for network-wide consensus and the potential disruption of existing blockchain protocols.

Is quantum computing friend or foe when it comes to deep tech applications such as blockchain and DLT?

Quantum computing’s enhanced processing capabilities could potentially optimise the consensus mechanisms employed in blockchain networks. By quickly solving complex mathematical puzzles, quantum computers might facilitate more efficient Proof-of-Work (PoW) or Proof-of-Stake (PoS) algorithms, increasing transaction throughput and reducing energy consumption.

And since quantum computing can process large datasets rapidly, it could enable more complex smart contracts and data analytics within blockchain systems, which could allow organisations to leverage blockchain for more intricate and data-intensive use cases (e.g., supply chain optimisation or scientific research).

The potential arrival of quantum computing necessitates a re-imagining of blockchain architectures to ensure long-term security. Hybrid solutions, which combine classical and quantum-resistant encryption, could provide a transitional path to mitigate quantum vulnerabilities while maintaining compatibility with existing blockchain networks.

Whilst we might not (yet) be in a post-blockchain, post-DLT world, the threats posed by quantum computing are significant. Blockchain-based protocols are safe (for now), but how revolutionary will they remain if their vulnerabilities can be exploited in the future?