The Quantum Threat to Bitcoin: How a Powerful Computer Can Steal Your Cryptocurrency in Under 10 Minutes

The first installment of this series delved into the fundamentals of quantum computing, explaining how these machines differ from classical computers and the unique principles they exploit. However, understanding the mechanics of quantum computers is only half the story; the other half involves grasping what they can attack and how. This piece focuses on the target of these attacks: the encryption that secures bitcoin transactions, and how a quantum algorithm can potentially break this encryption. Recently, a paper by Google has shed new light on the timeline of this threat, suggesting that the time needed to break bitcoin's encryption could be significantly less than previously thought, opening a nine-minute window for potential attacks. To comprehend the nature of this threat, it's essential to understand how bitcoin's security works. Bitcoin utilizes a system known as elliptic curve cryptography to verify ownership. Each wallet has two keys: a private key, which is a secret number, and a public key that is derived from the private key through a mathematical operation. This relationship between the private and public keys is akin to a one-way map, where starting from a known point, taking a certain number of steps leads to a public point that can be shared without revealing the private path taken. The security of this system relies on the difficulty of reversing this process, a problem known as the elliptic curve discrete logarithm problem, which is virtually impossible for classical computers to solve due to the enormous computational time required. However, a quantum algorithm known as Shor's algorithm can solve this problem efficiently, leveraging the principles of superposition, entanglement, and interference to find the period of a function that essentially unlocks the private key. The potential for a quantum computer to run Shor's algorithm against bitcoin's encryption has been a concern for over 30 years, but the feasibility of such an attack has been hindered by the requirement for a large number of stable qubits. Recent estimates have reduced the number of qubits needed, making the prospect of such an attack more plausible. Google's paper introduced a practical attack scenario where parts of the calculation can be precomputed, leaving only the final step to be completed once a target public key is identified. This has significant implications, particularly for the approximately 6.9 million bitcoin whose public keys have already been exposed on the blockchain, making them vulnerable to attack without the need for racing against the clock. The practical implications of this vulnerability and the steps that can be taken to mitigate the risk form the basis of the next part of this series.