Blockchain and Quantum Threat Will Quickly Spread Beyond Cybercurrencies

IQT Research foresees major commercial opportunities arising to protect blockchain against future quantum computer intrusions and agrees with the White House National Security Memorandum NSM-10, released on May 04, 2022, which indicates the urgency of addressing imminent quantum computing threats and the risks they present to the economy and to national security in our latest report “The Quantum Threat to Blockchain: Emerging Business Opportunities.”

Although primarily associated with cryptocurrencies, blockchain has been proposed for a wide range of transactions, including in insurance, real estate, voting, supply chain tracking, gaming, etc.  These areas are all vulnerable to quantum threats, which lead to operations disruption, trust damage, and loss of intellectual property, financial assets, and regulated data.

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Quantum computers threaten classical public-key cryptography blockchain technologies because they can break the computational security assumptions of elliptic curve cryptography. They also weaken the security of hash function algorithms, which protect blockchain’s secrets. This new IQT Research report identifies not only the challenges, but also the opportunities in terms of new products and services that arise from the threat that quantum computers pose to the “blockchain” mechanism. According to a recent study by the consulting firm Deloitte, approximately one-fourth of the blockchain-based cybercurrency Bitcoin in circulation in 2022 is vulnerable to quantum attack.

• With NIST announcing a new set of PQC standards in July 2022, PQC firms will soon be receiving major investments in the near term much of which will apply to blockchain. However, not all NIST-based PQC solutions will be feasible for blockchain use. Given the nature and intricacy of PQC, it will take years of planning for a successful migration to PQC-backed Blockchain protection.
• The earliest of expenditures on quantum safe technology in the blockchain market will go to protecting data from attacks later, when quantum computing resources become mature. This issue becomes more important as we grow closer to the day when powerful quantum computers become a reality. But data theft today requires preemptive action. The quantum threat to the blockchain means that the business opportunities in this space are emerging right now.
• There is a need for low-cost information-theoretically secure (ITS) solutions that instantly strengthen standardized cryptography systems used in blockchains. Already much discussed in this context are quantum-enabled blockchain architectures based on Quantum Random Number Generators (QRNG) and Quantum Key Distribution (QKD). Another important concept is quantum-enabled blockchain, which refers to an entire blockchain or some aspects of the blockchain functionality being run in quantum computing environments.
• Mining is another aspect of blockchains vulnerable to quantum attacks. Mining is the consensus process that certifies new transactions and keeps the blockchain activities protected. One risk with mining is that miners using quantum computers could launch a 51% attack. A 51% attack is when a single entity controls more than half of the computational power of the blockchain. A quantum attack on mining would undermine the network’s hashing power.

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