Crypto Sector Preps Defense Against Quantum Computing Threat
The cryptocurrency sector has reportedly begun preparations to defend against quantum computing-related threats.
That’s according to a report Wednesday (July 8) from Reuters, which says this comes as advances in the technology have led to concerns that it could bypass the cryptography protecting crypto transactions and digital wallets.
As Reuters notes, the $2 trillion crypto market already has a history of hacks. Quantum computers, the report said, could exacerbate this problem, as they could be used to unscramble the normal methods of encrypting digital information.
The technology is still mostly experimental, Reuters added, though concerns have grown within the crypto industry in the wake of recent research from Google showing that quantum computers capable of breaking encryption could arrive by 2029. Earlier projections put that development at up to a decade away.
“We want to raise awareness on this issue and are providing the cryptocurrency community with recommendations to improve security and stability before this is possible, including transitioning blockchains to post-quantum cryptography (PQC), which is resistant to quantum attacks,” Google researchers said in a report in March.
As PYMNTS wrote at the time, this assertion counters a popular narrative that decentralized systems are inherently more resilient. Google’s analysis spotlights a structural asymmetry: traditional financial institutions can quietly enhance their cryptographic infrastructure, while public blockchains are bound by “transparency, immutability and social consensus.”
The Reuters report added that research from Citigroup and others has concluded that the combination of quantum computing and advances in artificial intelligence (AI) has also shortened the timeline for crypto becoming largely vulnerable to hackers.
The report added that President Donald Trump last month issued executive orders to strengthen U.S. quantum capability, while acknowledging the risks the technology presents to the public and private sectors.
In May, the Department of Commerce announced plans to provide $2.013 billion in federal incentives to nine companies to support their quantum computing projects.
Meanwhile, some cryptocurrency firms and blockchain developers have begun working on plans to upgrade their networks with quantum-resistant cryptography, Reuters said. This is a potentially years-long effort that could mean sweeping changes to digital assets space’s infrastructure.
“It’s the most direct and existential threat towards cryptocurrencies and crypto networks,” Chris Tam, head of quantum innovation at BTQ Technologies, told Reuters.
As PYMNTS wrote in May, the forces destabilizing digital assets are the same ones moving through a diverse range of sectors, including trucking logistics networks, eCommerce platforms, industrial supply chains, financial institutions and enterprise software ecosystems.
“The infrastructure designed to establish trust online, from passwords and digital certificates to vendor onboarding systems and payment rails, is increasingly vulnerable to industrialized fraud, AI-enabled impersonation and next-generation cryptographic threats,” that report said.
