How crypto is preparing for the quantum apocalypse

23 Sep 2022

Dr Leemon Baird, co-founder of Hedera. Image: Jose R Marquez

Dr Leemon Baird of Hedera said the key size of digital signatures may have to increase to be safe in the world of quantum computers.

As the world waits for the first true quantum computers to become a reality, various industries are taking steps to prepare for their arrival.

These powerful machines are expected to surpass modern computers in almost every way, performing calculations that would otherwise be impossible.

This could lead to enormous benefits for humanity, but it could also pose a threat to the current cryptographic algorithms many digital services rely on.

Encryption involves complex maths problems that modern computers cannot solve to keep data secure. But quantum computers could become advanced enough to crack through modern encryption measures. The predicted fallout from these machines is known as the ‘quantum apocalypse’.

One area that could be at risk is cryptocurrencies. As the name suggests, these digital currencies rely on cryptography to verify transactions.

Research from Deloitte estimates that more than 4m bitcoins in circulation could be vulnerable to future quantum attacks. This compares to roughly $77bn in value, based on the current price of bitcoin.

Dr Leemon Baird is the co-founder of Hedera, a public proof-of-stake network designed for enterprises. Baird told that in a “nightmare scenario” where the crypto industry takes no steps to prepare, the results could be very damaging.

“What it would mean is that you could break the signature system that allows you to say whether or not tokens are transferred out of your account,” Baird said.

“Someone could steal everything you have, all of your cryptocurrency, all of your tokens, they could do anything in your name because your name is just a signature and they could forge your signature.

“And you could even do weird things like double spends, where you break the blockchain itself because you’ve broken the hash function.”

However, Baird said that this scenario is very unlikely as the industry is already “fully aware” of the risk that quantum computers could pose. He also explained that it can be relatively easy to protect the blockchain from this quantum threat, though it comes at a cost.

Digital signatures

Baird said certain upgrades that are needed to protect against quantum computers are relatively straightforward, such as hashing. In simple terms, this is when an input string of data of arbitrary length is changed to an output of a fixed length.

This helps to keep transactions secure as it’s hard to find two inputs with the same output. By creating a “slightly bigger hash”, Baird said data can be protected from quantum computers.

The “big issue” is in digital signatures, which are required to prove each transaction taking place on the blockchain is valid.

“It’s all anonymous, how else would you prove it? You have to prove that you have this key by signing something,” Baird said. “Digital signatures are the part where this is painful, very painful.”

Baird said that with larger key sizes, digital signatures can become safe from future quantum computers. The issue is the amount they have to be increased by.

Currently, Baird said a digital signature is around 64 bytes in size, with transactions ranging from 100 to 200 bytes. The Falcon algorithm changes this to 1,300 bytes.

Falcon is one of four encryption algorithms that are designed to be capable of withstanding a quantum computers assault. These algorithms were selected by the US National Institute of Standards and Technology earlier this year to form a new cryptographic standard.

“It means you have to send more bytes, you have to store more bytes, you have to process more bytes,” Baird said. “Everything is a pain.”

He added that this could cause everything in the blockchain to become slower and “a bit more expensive”. However, he believes that over a short period of time, technology advances will make the increased size more manageable.

“No one’s going to die because we have put on 800 bytes or 1300 bytes signatures. We can survive it,” Baird said. This could be done in a few years when there’s an actual standard.

“There’s no particular rush, but we will do it,” he added. “It’s a pain, it’s sort of a tax on all humanity. But we’ll pay the tax.”

Updated, 1.40pm, 26 September 2022: This article was updated to clarify a few details in Dr Leemon Baird’s quotes.

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Leigh Mc Gowran is a journalist with Silicon Republic