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Bitcoin Blockchain and Quantum Computer-III

admin — Sun, 06 Feb 2022 09:41:41 +0000

New research suggests quantum machines with 13 million qubits could crack Bitcoin encryption

Advances over the next decade could pave the way for quantum computers powerful enough to crack Bitcoin encryption, new research suggests.

Scientists from the University of Sussex in the UK estimate that quantum systems with 13 million qubits would be sufficient to break the cryptographic algorithm (SHA-256) that secures the Bitcoin blockchain within the space of 24 hours.

Although modern quantum computers come nowhere close to this level of performance (the current record is a comparatively measly 127 qubits), the researchers say significant developments over the next ten years or so could yield quantum machines with sufficient horsepower.

Cracking the Bitcoin Algorithm

The ability to break the encryption protecting the Bitcoin network would allow an attacker to hijack transactions and reroute coins into their own wallet. In this hypothetical scenario, the market would surely crumble as soon as an attack became apparent, wiping out hundreds of billions of dollars in value.

For the time being, cryptocurrency enthusiasts can rest easy in the knowledge that cracking the SHA-256 algorithm is impossible with current hardware, but that won’t always be the case.

Manufactured by IBM, the current most powerful quantum system is touted as the first whose performance cannot be reliably replicated by a classical computer, but it’s still a long way shy of the 13 million qubits required to break Bitcoin.

However, there is extensive research ongoing into all aspects of quantum computing, from almost all the world’s largest technology companies. A lot of work is going into increasing the number of qubits on a quantum processor, but researchers are also investigating opportunities related to qubit design, the pairing of quantum and classical computing, new refrigeration techniques and more.

In all likelihood, Bitcoin will fork onto a new quantum-safe encryption method long before a sufficiently powerful quantum computer is developed, but the research raises an important point about the longevity of encryption techniques nonetheless.

As noted by Mark Webber, lead researcher on the project, because advances in quantum computing will inevitably render modern encryption redundant, it would be a mistake to assume that information encrypted today will remain secure tomorrow.

“People are already worried because you can save encrypted messages right now and decrypt them in the future,” said Webber. “There’s a big concern we need to urgently change our encryption techniques, because in the future, they’re not secure.”

Source: https://www.newscientist.com

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Bitcoin Blockchain and Quantum Computer – II

admin — Sat, 13 Nov 2021 16:38:35 +0000

Our first article exploring synergies between the Blockchain and Quantum Computing was well received and made us extend it to a series. This is the second article on the section and we will continue writing more on these two potentially coacting technologies. Here we attempt to explore cryptographic algorithms (that no doubt is the center of quantum influence) and their application in blockchain (bitcoin mining). We look forward to your questions and feedback.

What is SHA-256 (Secure Hash Algorithm 256-bit)?

Ever since the inception (and continued advancements) of network security, encryption and hashing have been the core principles for developing additional security modules. The secure hash algorithm with a digest size of 256 bits, or commonly referred as SHA-256, is one of the most widely used hashing algorithms. While there are other variants, SHA-256 has been at the forefront of real-world applications.

Bitcoin is a decentralized digital currency that uses public distributed ledger called blockchain to register the transactions. The network nodes confirm the authenticity of the transactions using “cryptography”. Bitcoin applies SHA-256, a cryptographic hashing function that turns random input data into a 256-bit string (called as the ‘Hash’). This is a one-way function and it is easy to find the hash from an input, but the reverse is not possible.

click here to generate your own SHA-256 HASH

Implementation of Grover’s algorithm in finding the target value

In quantum computing, Grover’s search is sometimes presented as an elixir. It finds with a very high probability the unique input (value) to a black box function that produces a particular output. Hence, it is a perfect solution to finding the target value and has a quadratic quantum speedup. The equation is directly proportional to “t” (time in seconds) and “r” (Hash rate) for quantum miners running Grover’s algorithm. Compared with classical success probability of Trt/2256, the success probability of Grover’s quantum algorithm is sin²(2r_q(T/2²⁵⁶)^1/2), where “r_q” is the number of Grover’s iterations per second or the “quantum hash rate”. Solving for r (Hash rate):

r=sin²(tr_qT^1/2/2¹²⁷)2²⁵⁶/tT; where T!=0

There is a different dynamic between the classical and quantum miner because Bitcoin is designed to find a new block on average every 10 minutes (or 600 seconds). Hence, the nature of the search problem changes in this duration. For high probability of success of Grover procedure, quantum miners should run their algorithm for a time “t” before the problem changes, and then make the measurement. Meanwhile, the classical miner, during this period, has been trying as many nonces as possible. So, the quantum miner is hoping that none of the classical miners have found a solution during the Grover evolution. Since the interval between blocks follows an exponential distribution, the probability that the block is still mineable is t/600 e.

Assuming a constant cost of running a quantum computer for a given amount of time, the profitability of quantum bitcoin mining is then:

Re^-t/600sin²(2r_qt(T/2²⁵⁶)^½)-Ct

where “R” is the reward (currently equal to the price of 12.5 bitcoins plus transaction fees) and “C” is the cost of running the quantum computer.

Is quantum bitcoin mining profitable?

Let us do some estimation to determine whether quantum bitcoin mining is profitable. Assume that the cost of running a quantum computer is the same as that of a classical computer. Using the above equations, it can be determined that quantum mining will be possible at a quantum hash rate of 48 kilo-hashes/s, compared with the existing best classical hardware having 125 kilo-hashes/s.

Classical Bitcoin miners can achieve enormous hash rates because the random guess mining algorithm can be quite easily parallelized. The problem is that the quantum advantage does not exceed the factor of (2²⁵⁶/T)½, irrespective of the number of qubits. Although there is a quantum advantage, it is not insurmountable enough that classical parallelization cannot beat it. For a quantum computer with a slower hash rate than the minimally profitable 48 kilo-hashes/s, quantum parallelization seems to be necessary.

For example, for a quantum hash rate of 3 kilo-hashes/s, one would require1300 quantum computers to be on par with classical best mining hardware available today. Thus, profitable quantum mining would need rather fast quantum hash rates, and/or a much more significant quantum speedup. This may still happen in the future, but for now, classical mining seems difficult to beat.

Bitcoin mining and electricity

As of August 2021, the leader of the global bitcoin network hash-rate is the USA (35.4%), followed by Kazakhstan (18.1%) and Russia (11%). According to the New York Times, bitcoin mining consumes 0.5% of global electricity annually (refer to figure 2) and is seven times Google’s yearly energy consumption. To mine one bitcoin, an individual miner could take up to 5 years and consume up to 21900 kWh.

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ARQIT’s QuantumCloud and Quantum Encryption

admin — Fri, 21 May 2021 07:28:24 +0000

QuantumCloud allows organisations to simplify and strengthen their encryption on a global basis, appliance-free. It uses symmetric encryption that is said to be is better suited for an increasingly connected world, compared with public key infrastructure (PKI) that is used to encrypt most of the world’s communications.

Over the past four years, Arqit claims to have invented and patented technology which provides the benefits of Quantum Key Distribution (QKD) to end point devices. It puts a lightweight agent at any end point device, which is able to create an unlimited number of symmetric keys with partner devices.

QuantumCloud’s reach is due to be expanded further through the usage of pioneering satellite technology. Currently, the symmetric keys used in data encryption are created terrestrially. However, by 2023 Arqit plans to launch two quantum satellites, which will build on established QKD protocols to extend the capability to both create and transmit secure keys to the data centres of Arqit’s customers globally.

Arqit is not disclosing who is building its satellites, which will support quantum encryption technology it calls QuantumCloud. The startup says its technology will secure communications links of any networked device against hacking, including attacks from a quantum computer.

Arqit’s QuantumCloud software generates an unlimited number of encryption keys at the end point of customer devices to protect against hacks.

However, Arqit plans to use satellites to create a backbone of secure keys within data centers around the world.

“This is a deep tech company which is many years ahead of the market. Arqit has protected its IP by remaining in stealth mode whilst filing over 1,000 claims on more than a dozen patent applications.”

David Williams

Chairman at Arqit

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Bitcoin Blockchain and Quantum Computer-I

admin — Wed, 12 May 2021 11:58:24 +0000

What is Cryptocurrency?

Cryptocurrency is a form of contactless payment for online (and in future offline) goods and services. The company issue its own cryptocurrency called tokens for buying its goods or services. It is similar to arcade tokens or casino chips and requires exchanging real currency for the cryptocurrency.

Cryptocurrencies work based on a decentralized technology called blockchain. Blockchain ledger spread across many computers to records transactions making it more trustworthy and secure.

Major Cryptocurrencies in circulation

Bitcoin

Launched in 2009, bitcoin is the world’s largest cryptocurrency by market capitalization
Unlike fiat currency, bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain
Bitcoin’s history as a store of value has been turbulent; it has gone through several cycles of boom and bust over its relatively short lifespan
As the earliest virtual currency to meet widespread popularity and success, bitcoin has inspired a host of other cryptocurrencies in its wake

Ethereum

Ethereum is an open-source blockchain-based platform used to create and share business, financial services, and entertainment applications
Ethereum users pay fees to use dapps. The fees are called “gas” as they vary depending on the amount of computational power required
Ethereum has its own associated cryptocurrency, Ether or ETH
ETH is now second only to Bitcoin in market value

Tether

Tether (USDT) is a stable coin, a type of cryptocurrency which aims to keep cryptocurrency valuations stable
Tether is used by crypto investors who want to avoid the extreme volatility of other cryptocurrencies while keeping value within the crypto market
In April 2019, the New York Attorney General accused Tether’s parent company of hiding an $850 million loss
Tether tokens trade under the USDT symbol

Binance Coin

Binance Coin is the cryptocurrency issued by the Binance exchange and trades with the BNB symbol
BNB was initially based on the Ethereum network but is now the native currency of Binance’s own blockchain, the Binance chain
Every quarter, Binance uses one-fifth of its profits to repurchase and permanently destroy, or “burn,” Binance coins held in its treasury
Binance was created as a utility token for discounted trading fees in 2017, but its uses have expanded to numerous applications, including payments for transaction fees (on the Binance Chain), travel bookings, entertainment, online services, and financial services

Impact on Bitcoin Blockchain

Deloitte Warns 4,000,000 Bitcoin Worth $28.6 Billion Vulnerable to Quantum Attack, presently which is about 25% of the Bitcoins in circulation.

Bitcoin is a decentralized system for transferring value. Unlike the banking system where it is the responsibility of a bank to provide customers with a bank account, the user of Bitcoin is responsible for generating his or her own random address. By means of a simple procedure, the user’s computer calculates a random Bitcoin address (related to the public key) as well as a secret (private key) that is required in order to perform transactions from this address.

Moving Bitcoins from one address to another is called a transaction. Such a transaction is similar to sending money from one bank account to another. In Bitcoin, the sender must authorize their transaction by providing a digital signature that proves they own the address where the funds are stored. It is believed that someone with an operational quantum computer and public key could falsify this signature, and therefore potentially spend anyone’s Bitcoins!

One of the most important features of Blockchain is immutability. Blockchain data, hashes and signatures are perpetual and therefore liable to attacks by hackers. Quantum technology can simply hash calculations and make hash collisions retrieval achievable thereby compromising blockchain security. Also, blockchain signatures can allow attackers to retrieve the associated private key.

So, current blockchains will require its own migration. This will likely take the form of fork or a protocol update, creating a new post-quantum chain or addresses and a limited window of time for users to migrate their data and assets. Even if everyone takes the same protection measures, quantum computers might eventually become so fast that they will undermine the Bitcoin transaction process. In this case the security of the Bitcoin blockchain will be fundamentally broken. The only solution in this case is to transition to a new type of cryptography called ‘post-quantum cryptography’.

Adapting blockchains to the post quantum era will require increased storage and computing resources. The evolution of technology will account for that in most cases. Perhaps IoT applications, where resource constraints are greatest, will have greater difficulty in adapting.

Source: https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-blockchain.html

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Quantum Cryptography- Now To Be a Reality Soon

admin — Mon, 10 May 2021 10:38:01 +0000

Why Quantum Cryptography is Important?

Users place enormous trust in banks and commercial enterprises to keep sensitive information such as credit card details, social security number etc. information safe while conducting online transactions. What if these enterprises can no longer guarantee the security of the private information, using current encryption methods? Cybercriminals are always trying to gain access to secure data, but when quantum computers come online, that information will be even more at risk of being hacked. In fact, hackers have always had head start as they have been collecting encrypted data, but needs significant computing ability to break the code. While decryption is difficult to do with conventional computing, relatively powerful quantum computer will enable breaking of the existing schemes. However, the twist comes when encryption is done using with quantum encryption, as decryption will not be straightforward.

Quantum Cryptography Definition

Quantum cryptography, also called quantum encryption, applies principles of quantum mechanics to encrypt messages in a way that no one outside of the intended recipient can decipher or read it. It takes advantage of “multiple states” and “no change theory” of quantum.

Performing these tasks requires a quantum computer, which has the immense computing power to encrypt and decrypt data. A quantum computer could quickly crack current cryptography schemes some of which are referred later in the article. Unlike mathematical encryption, quantum cryptography uses the principles of quantum mechanics to encrypt data and make it virtually “unhackable”.

Unlike mathematical encryption, quantum cryptography uses the principles of quantum mechanics to encrypt data and making it virtually unhackable.

How quantum cryptography works?

Quantum cryptography or quantum key distribution (QKD) uses a series of photons (light particles) to transmit data from one location to another over a fiber optic cable. By comparing measurements of the properties of a fraction of these photons, the two endpoints can determine the key value and whether it is safe to use. The steps are as follows:

The sender transmits photons through a filter (or polarizer), which randomly gives them one of four possible polarizations and bit designations: Vertical (One bit), Horizontal (Zero bit), 45 degree right (One bit), or 45 degree left (Zero bit)
The photons travel to a receiver, which uses two beam splitters (horizontal/vertical and diagonal) to “read” the polarization of each photon. The receiver does not know which beam splitter to use for each photon and has to guess which one to use
Once the stream of photons has been sent, the receiver inform the sender about the beam splitter used for each of the photons in the sequence they were sent. The sender then compares that information with the sequence of polarizers used to send the key. The photons that were read using the wrong beam splitter are discarded, and the resulting sequence of bits becomes the key

The photon’s state will change if it is read or copied by an eavesdropper and the endpoints will detect the change. In other words, a photon cannot be read, copied or forwarded without being detected.

Following are the list of commonly used encryption schemes

Triple DES

Triple Data Encryption Standard (DES) is a computerized cryptography where block cipher algorithms are applied three times to each data block. The key size is increased in Triple DES to ensure additional security through encryption capabilities. Each block contains 64 bits of data. Three keys are referred to as bundle keys with 56 bits per key.

RSA

RSA encryption is a public-key encryption technology developed by RSA Data Security. The RSA algorithm is based on the difficulty in factoring very large numbers. The RSA encryption algorithm uses prime factorization as the trap door for encryption. Deducing an RSA key, therefore, takes a huge amount of time and processing power. RSA is the standard encryption method for important data, including those transmitted over the Internet.

Blow Fish

Blowfish encryption is a symmetric block cipher (a method that allows encrypting data in blocks) that can be used in place of Data Encryption Standard (DES) or International Data Encryption Algorithm (IDEA). It takes a key that varies in length from 32 to 448 bits. It works for both domestic and exportable use.

Two Fish

Twofish is related to the earlier block cipher Blowfish, which is a 64-bit clock cipher that uses a key length varying between 32 and 448 bits also developed by Bruce Schneir. Twofish is also related to Advanced Encryption Standard (AES), a 128-bit block cipher that the United States government adopted as it’s specification for the encryption of electronic data by the U.S. National Institute of Standards and Technology In 2001. While Twofish was a finalist to become the industry standard for encryption, it was beaten out by AES because of Twofish’s slower speed.

AES

Advanced Encryption Standard (AES) is a cipher, meaning that it is a method or process used to change raw information (usually human readable) into something that cannot be read. This part of the process is known as encryption. The method uses a known external piece of information called “key” to uniquely change the data.

When will Quantum Cryptography become available?

The bigger question is about the availability of quantum computers and how much more time to realize quantum cryptography? There are significant engineering challenges to develop quantum computers that can take decades to solve. The technology is still in its infancy, Google has developed a machine with about 50 qubits and IBM is talking about 70 qubits.

Cracking today’s standard RSA encryption would take thousands of qubits. Adding those qubits is not easy because they are so fragile. Additionally, quantum computers today have extremely high error rates and require even more qubits for error correction. “I teach a class on quantum computing,” says University of Texas’s Brian R. La Cour. “Last semester, we had access to one of IBM’s 16-qubit machines. I was intending to do some projects with it to show some cool things you could do with a quantum computer.” That didn’t work out, he says. “The device was so noisy that if you did anything complicated enough to require 16 qubits, the result was pure garbage.”

Once that scalability problem is resolved, we will be well on our way to having usable quantum computers, he says, but it is impossible to put a timeframe on it. Brian R. La Cour guesses that we are probably decades away from the point at which quantum computers can be used to break today’s RSA encryption. There is plenty of time to upgrade to newer encryption algorithms.

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