Recently, Google’s announcement about Willow, its quantum computer, and Bitcoin’s perceived danger has caused a mini-media firestorm. Most of the analysis shows a very superficial understanding of how quantum computing will impact encryption and how bitcoin will survive these advances. We’ll examine quantum computing’s threat to bitcoin. Technicalities are important to scrape the surface and understand the situation.
Quantum Computing and Bitcoin’s Future
Y2K-style computer upgrades will be needed to update Bitcoin’s protocol in the coming years due to quantum computing. Though costly and time-consuming, it will not threaten Bitcoin’s existence. Not only will Bitcoin be affected, but quantum computers can also break all types of cryptography used in finance, commerce, banking, and more.
Some of this bitcoin doomsaying may be “sour grapes” syndrome. Bitcoin critics are using Google’s quantum computing revelation to prophesy its demise. They don’t believe it could ever work, dislike its challenge to government control, or regret not investing when it was cheaper. Sceptics’ reactions frequently reveal their preconceptions rather than Bitcoin’s flaws.
Quantum Computing’s Threat to Bitcoin
Current estimates suggest Google’s Willow quantum computer’s 105 qubits produce correct calculations. Breaking Bitcoin’s encryption would take 200 to 400 million qubits despite 105 qubits’ computing capability. To acquire this capability in 10 years, quantum computation must rise over 324% yearly, which is unlikely.
However, quantum computing threatens bitcoin and must be taken seriously. Bitcoin needs a quantum-resistant protocol soon. Bitcoin developers are already discussing when and how to achieve this. After these ideas are finalized, a Bitcoin Improvement Proposal (BIP) will be submitted online for debate and trial. Once a majority of bitcoin nodes approve a community solution, it will take effect.
Compared to millions of other secure computing protocols and networks, bitcoin’s changes to overcome this difficulty are minor. The global cryptographic protocol upgrade will be orders of magnitude more difficult than Y2K. Focusing on how quantum computing will affect Bitcoin ignores the bigger point: The end of encryption affects everything. The post-quantum world will test modern civilization’s foundation.
Encryption Key to Modern Tech
Cryptography underpins almost every facet of tech-enabled civilization. Financial systems use RSA encryption for online banking transactions to protect credit card data and account credentials. Banking doesn’t exist without encryption.
E-commerce systems protect buyer-seller payment data using the same methods. Without encryption, no e-commerce. Hospitals and medical providers use encryption to transfer EHRs and make payments. No modern medical system exists without encryption.
Government agencies encrypt classified communications to protect national secrets. Without encryption, there is no national security. Encrypted orders protect IoT devices like connected automobiles and smart home systems from hackers. Without encryption, there are no smart devices.
Summary
Google’s Willow quantum computer has raised concerns about the impact of quantum computing on Bitcoin and encryption. While quantum computing could eventually challenge Bitcoin’s security, it is unlikely to threaten its existence in the near future. Bitcoin will need protocol updates to become quantum-resistant, but this process is feasible. The real concern is the broader effect of quantum computing on encryption, which underpins everything from banking and e-commerce to healthcare and national security. The transition to quantum-resistant systems will be critical for all industries, not just Bitcoin.
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