Written by: Akshat Rajesh

Blockchain is a fully secure method to securely transact funds directly between parties without the intervention of an external agent, such as a bank. Through its unique qualities, such as immutable ledger, decentralized network, and cryptographic encryption, blockchain has accelerated to the forefront of digital security technology. While Blockchain and its security measures are safe from cyber-attacks on traditional computers, the new era of Quantum Computers and computing poses a formidable opponent to Blockchain and cryptocurrency entirely.

To understand these threats, one must understand how quantum computing functions and differs from classical computing. Traditional computing is based on bits, which are units of information in binary, either 1 or 0. Quantum computing, on the other hand, is based on quantum bits or qubits, which can store any combination of 1s and 0s (known as a superposition). In turn, quantum computers can run multiple paths of calculations simultaneously, with each superposition flexing between 0s and 1s. In contrast, traditional computers can only run one path of calculations at a time and need to change the value of their bits before running another, making them far inferior to the power of quantum computers as they take much more time to compute the same number of possibilities. Furthermore, traditional bits are isolated pieces of information, while qubits exhibit the trait of entanglement, meaning they can interact with other qubits, allowing even more concurrent calculations to happen.

One of the major ways in which quantum computing can harm blockchain is through its effects on decentralization. Blockchains are decentralized due to their decentralized mining processes. As quantum technology develops into more widescale use, the vast majority of mining will begin to be done by a small number of quantum computers, causing the blockchain to become quite centralized. Large blockchains such as BTC (Bitcoin) utilize a proof-of-work mining (PoW) system where miners compete to validate transactions in return for some cryptocurrency. If the mining processes of a blockchain become too centralized, the miners or group of miners in question will have an excessive influence on the blockchain itself, which can lead to an increase in 51% of attacks. These attacks happen when an entity holds over 50% of the blockchain's hash rate and can make changes to the chain without agreement from the rest of the community. Consequently, an attack will destroy the fabric of the blockchain itself, allowing the rewriting of past transactions and blocking future transactions. Although large, well-established cryptocurrencies like BTC and ETH (Ethereum) have the size and security to make 51% of attacks far too costly to execute, quantum computing in the wrong hands can entirely usurp any modern security metric.

Another pressing issue surrounding quantum computing and blockchains is the impact on asymmetric encryption, which is the basis of encryption that makes blockchain transactions are secure as they are today. Asymmetric encryption is validated through the technology of public-key cryptography (PKC). PKC works as a single-direction mathematical function that is simplistic to compute in one direction, but very difficult in reverse. (Think modulus and trigonometric functions, in which nearly infinite inputs can cause each output). The components of a PKC are the public key, which essentially works as the address that receives transactions, and the private key, which is paired with the public key and proves who the funds' owners are. In the current blockchain space, every user has access to everyone else's public keys, but private keys are exclusive to the owner of a wallet. While private keys are currently nearly impossible to derive from public information, quantum computing can allow users to reverse engineer public keys into private keys, allowing complete and total access to another individual's crypto wallet.

The most widespread form of encryption currently is RSA (Rivest-Shamir-Adleman) encryption, where both keys can encrypt, but only the opposite key can decrypt. The mathematical nuances of RSA involve an extremely large number composed of 2 other large prime numbers. Multiplying the numbers together is extremely easy (encryption), while factoring them from the product is nearly impossible (decryption). Subsequently, 2 major quantum algorithms could potentially damage the basis of cryptography: Shor’s and Grover’s. Shors quantum algorithm outlines a method of factoring large integers that can be used to find the prime factorization. Grover’s algorithm, on the other hand, provides a very fast method to search unstructured data, which can be used to decode cryptographic hashing in a more efficient manner. Both techniques, complemented with the power of quantum computing, can decimate almost every modern RSA encryption protocol, rendering the current security status quo obsolete.

While some of the technical dilemmas of quantum computing in a world of blockchain can seem highly daunting and fearful, there are many solutions being researched to combat the impending threats of quantum computing. One such quantum proofing solution is moving from proof of work blockchains to proof of stake (PoS) and other non-computationally intensive mining models. Unlike proof of work mining systems, as previously explained, which is a competitive mining environment, proof of stake as a consensus mechanism chooses validators based on an algorithm determined by the stake they hold in that blockchain token. Since the validation is not competitive mining, quantum computing’s mathematical advantage does not make it easier to take over a blockchain or commit 51% of attacks. However, this solution also carries its own implications and problems, such as the high barrier of entry and large initial investment to qualify as a validator. This process can progress into making blockchains under PoS mining exclusive to the upper class and wealthy.

Another quantum proofing measure is the theoretical merging of quantum computing with blockchain. While not currently applicable due to the immaturity of quantum research, some experts foresee a blockchain made with quantum encryption, creating a chain of multiple magnitudes of order that is more secure than current blockchains. Specifically, replacing asymmetric key encryption and hash functions with quantum key cryptography. Quantum key cryptography utilizes the transport of photons through optical links, making it so the transaction would be canceled if anyone outside the transaction parties attempted to view it. Some current blockchains, such as Quantum Resistant Ledger (QRL), claim to be completely quantum secure. Utilizing extended Merkle Tree Signature Schemes dependent exclusively on secure hash functions such as SHA256 (believed by some to take quantum computers over a year to crack), QRL is projected to be a quantum-proof blockchain.

At the end of the day, the impacts of quantum mechanics and computing on the world of blockchain and cryptocurrency are almost entirely theoretical. Some experts even believe that traditional cryptography will not be completely obsolete at the hands of quantum computers. While technological developments to test these theories are still lacking, it is important for blockchain developers in the industry to keep on the lookout for how advancements in quantum can impact their world.

Works Cited

Barmes, Itan, et al. “What Does the Dawn of Quantum Computing Mean for Blockchain?” World Economic Forum, 29 Apr. 2022,

www.weforum.org/agenda/2022/04/could-quantum-computers-steal-the-bitcoins-straight out-of-your-wallet/. Accessed 19 Nov. 2023.

Cobb, Michael. “What Is the RSA Algorithm? Definition from Searchsecurity.” Security, TechTarget, 4 Nov. 2021, www.techtarget.com/searchsecurity/definition/RSA. Accessed 19 Nov. 2023.

Davis, Daniel, and Alexander Kim. “Quantum Computing Could Threaten Blockchain, Crypto.” Bloomberg Law, 17 Aug. 2023,

news.bloomberglaw.com/us-law-week/quantum-computing-could-threaten-blockchain-cr ypto. Accessed 19 Nov. 2023.

Frankenfield, Jake. “51% Attack: Definition, Who Is at Risk, Example, and Cost.” Investopedia, 7 June 2023, www.investopedia.com/terms/1/51-attack.asp.

Guillemet, Charles. “Should Crypto Fear Quantum Computing?” Ledger, 14 Feb. 2023, www.ledger.com/blog/should-crypto-fear-quantum-computing. Accessed 19 Nov. 2023. “Is BTC Mining Decentralized? Centralization of Bitcoin?” Doubloin, 10 June 2023, www.doubloin.com/learn/is-btc-mining-decentralized#:\~:text=Bitcoin%20mining%20ens ures%20the%20decentralization,the%20hashrate%20gets%20too%20big. Accessed 19 Nov. 2023.

Maha. “Quantum Resistant Ledger: A Quantum-Proof Blockchain Frontier.” Quantum Resistant Ledger: A Quantum-Proof Blockchain Frontier, 12 Jan. 2023,

www.manageengine.com/active-directory-360/manage-and-protect-identities/identitude/blogs/quantum-resistance-ledger-QRL-and-cryptography-role-in-blockchain.html#:\~:text= The%20QRL%20is%20the%20first,and%20the%20quantum%20computers%20era. Accessed 19 Nov. 2023.

“Quantum Computers and the Bitcoin Blockchain.” Deloitte Netherlands, 10 Aug. 2023, www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-b lockchain.html. Accessed 19 Nov. 2023.

“Quantum Computing and Blockchain: What You Need to Know.” SupraOracles, 6 June 2023, supraoracles.com/academy/quantum-computing-and-blockchain-what-you-need-to-know/ #will-quantum-computing-break-blockchains-and-end-cryptocurrency. Accessed 19 Nov. 2023.

Ravikiran , S A. “What Is Blockchain Technology? How Does Blockchain Work? [Updated].” Simplilearn.Com, Simplilearn, 18 Oct. 2023,

www.simplilearn.com/tutorials/blockchain-tutorial/blockchain-technology#:\~:text=A%20 blockchain%20platform%20is%20a,consensus%20among%20the%20network%20partici pants. Accessed 19 Nov. 2023.

“Shor’s Algorithm.” Home, www.qutube.nl/quantum-algorithms/shors-algorithm. Accessed 19 Nov. 2023.

“What Is Grover’s Algorithm?” Utimaco,

utimaco.com/products/technologies/post-quantum-cryptography/what-grovers-algorithm. Accessed 19 Nov. 2023.

“What Is Quantum Computing?” McKinsey & Company, 1 May 2023,

www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-quantum-computing. Accessed 19 Nov. 2023.