Photo by Markus Spiske on Unsplash
It’s easy to see the appeal of cryptocurrencies like Bitcoin. Financial transactions can be swiftly conducted between buyer and seller, eliminating the need for an intermediary such as a bank. Bitcoin is also accepted the world over, and its value isn’t subject to government manipulation in the way that national currencies are.
But without the checks and balances offered by, say, a bank, one wonders: is your Bitcoin safe?
For now, the answer is yes. Bitcoins are currently protected by the blockchain system – a digital ledger where each transaction is recorded and visible across a wide network of personal computers. Records are stored in a chronologically ordered series of “blocks.” Every change within a given block is marked by a digital fingerprint; should the records be altered to benefit one party illicitly, the entire network will immediately know about it.
The cryptography that safeguards transactions in the blockchain is so mathematically complex that it’s now considered safe from being hacked, even by a supercomputer. Quantum computers are another story entirely.
Information units in classical computers are known as bits, expressed as zeroes or ones. But quantum bits – known as qubits – can exist in two states at once: they could be zeroes or ones at the same time, a phenomenon known as superposition. As a result, the vast increase in a quantum computer’s informational capacity will also increase its calculating power.
“As soon as the quantum computer is developed, modern cryptocurrencies will become worthless,” says the University of Calgary’s Alexander Lvovsky
, a fellow in CIFAR’s Quantum Information Science
program. But when will quantum computers arrive?
“If you’d asked me two years ago, I’d have said this computer was a matter of the distant future,” says Lvovsky. “But since then, important developments have occurred.” Google, Microsoft and IBM have made investments which have produced results, and then there is D-Wave (a British Columbia company which has produced a prototype quantum computer.) Lvovsky still believes we are a “significant distance” from a computer that can destroy the encryption systems currently protecting not only Bitcoin - but much of our conventional finances.
The trouble is that nobody knows just how long that distance is. That’s why Lvovsky and others have been working to quantum-proof blockchains before the devices arrive. Using a principle known as quantum key distribution (QKD), he and a team from Moscow’s Russian Quantum Centre have come up with a preliminary solution to the problem.
In QKD, two parties (a buyer and a seller, say) generate a secret key over a secure quantum channel. They then use that key to keep their information encrypted while conferring on a public, or transparent channel.
QKD itself is not new. It was first invented back in 1984 by two CIFAR fellows, Gilles Brassard
and Charles Bennett. Since then, other physicists (such as CIFAR Fellow Thomas Jennewein
) have developed new protocols based on the one conceived by Brassard and Bennett, with the eventual aim of keeping not only financial but other highly sensitive information safe.
As Lvovsky puts it, “quantum computers are a sword, but quantum communication is a shield.” To this point, though, quantum communication has not yet been used to secure the blockchain system.
Interestingly, Lvovsky and his team partnered with Gazprombank, one of Russia’s biggest financial institutions to test their research. Though Bitcoin is often considered an “anti-bank” currency, in its digital nature it’s no different than any other currency.
Consequently, “Banks and quantum technology form a natural partnership,” says Lvovsky. “Nowadays, a bank is essentially an information technology company, and information security is a key asset to its success. In Russia they understand this.”
Lvovsky stresses that other countries should follow suit, and that his team’s work represents but one step toward this goal. “Our protocol assumes that each node of the blockchain network is connected to all others via direct QKD links. At the moment, this is unrealistically expensive. Plus, what if some of the nodes try to cheat? The algorithm we use will eventually be able to detect and neutralize the cheaters, but it requires a prohibitively high amount of quantum communication traffic if the fraction of cheaters is significant. So I see our paper largely as a way to alert the scientific community, rather than the final solution. Here is an important problem, and we must work together to develop a practical solution.”
“This is a macroeconomic issue, right?” he continues. “A lot of quantum research is just interesting for physics and has intellectual merit, but the quantum threat to the security of cryptocurrencies is something that will affect all of us, and quite soon. It must be addressed.”