The Quantum Threat to Bitcoin: How Your Cryptocurrency Could Be Stolen in Under 10 Minutes

The first part of this series delved into the principles of quantum computing, but understanding how it works is not enough to grasp the threat it poses to bitcoin. To comprehend this, we need to explore the target of the attack: bitcoin's encryption, and how a quantum algorithm can exploit its weaknesses. This piece will examine the encryption method used by bitcoin, why a quantum algorithm can break it, and the implications of Google's recent paper on the timeline for such an attack. Bitcoin relies on a system called elliptic curve cryptography to verify ownership. Each wallet has a pair of keys: a private key, which is a secret number, and a public key derived from the private key through a mathematical operation. The relationship between the two keys is like a one-way map, where it's easy to generate the public key from the private key but virtually impossible to do the reverse. This is the foundation of bitcoin's security model. However, a quantum algorithm known as Shor's algorithm can break this one-way trapdoor. Discovered by mathematician Peter Shor in 1994, the algorithm solves the discrete logarithm problem efficiently, which is the core of bitcoin's encryption. The algorithm works by converting the problem into finding the period of a function, which is a task that quantum computers are particularly well-suited for. By using superposition, entanglement, and interference, a quantum computer can find the period of the function, and from this, the private key can be derived. The reason bitcoin remains secure for now is that running Shor's algorithm requires a quantum computer with a large number of stable qubits. However, Google's recent paper has reduced the estimated number of qubits needed, making the threat more tangible. The paper introduced a practical attack scenario where parts of the algorithm can be precomputed, leaving the quantum computer in a primed state, ready to finish the calculation once a target public key appears. This reduces the time needed to derive a private key to about nine minutes, which is alarming given bitcoin's average block confirmation time is 10 minutes. The implications are significant, with approximately 6.9 million bitcoin already exposed and vulnerable to an 'at-rest' attack that doesn't require racing against the clock. As quantum computing technology advances, the gap between the theoretical threat and practical reality is closing, posing a significant risk to the security of bitcoin.