Can advanced quantum computing pose a risk to Bitcoin security?

Rapid advances in quantum computing could pose a risk to certain types of Bitcoin transactions.

A wide range of initiatives in post-quantum cryptography works to mitigate unwanted scenarios

Some predict that rapid advances in quantum computing will have key implications in domains that use public-key cryptography, such as the Bitcoin ecosystem.

Bitcoin’s “asymmetric cryptography” is based on the principle of “one-way function”, which means that the public key can be easily reported from the corresponding private key, but not vice versa.

This is because classical algorithms require an astronomical amount of time to perform such calculations and are therefore impractical.

However, Peter Shore’s quantum algorithm in polynomial time, which is performed on a sufficiently advanced quantum computer, could perform such calculations and thus falsify digital signatures.

To better understand the level of risk introduced by advanced quantum computing, we limit ourselves to simple person-to-person payments.

They can be divided into two categories, each affected differently by quantum computing:

  • Pay to public key(p2pk): Here the public key can be obtained directly from the wallet address. A quantum computer could potentially be used to execute a private key, thus allowing a thief to spend money on an address.
  • Pay to public key hash(p2pkh- Pay to public key hash): Here the address consists of a public key hash and therefore cannot be obtained directly. It is detected only at the moment of starting the transaction.

So, until the funds are transferred from the p2pkh address, the public key is not known and the private key cannot be reported even using a quantum computer.

However, if funds are ever transferred from a p2pkh address, the public key is revealed.

Therefore, in order to limit the exposure of the public key, such addresses should never be used more than once.

Although avoiding the reuse of a p2pkh address can limit vulnerability, there may still be situations in which a quantum-capable adversary can successfully commit fraud.

The act of transferring coins even from a “secure” address reveals the public key.

From that moment until the transaction is dug up, the opponent has the opportunity to steal the funds.

What are the theoretical methods of attack?

Transaction hijacking: Here the attacker calculates the private key from the public key of the pending transaction and creates a conflicting transaction by spending the same coins, thus stealing the victim’s property.

The opponent offers a higher fee to encourage inclusion in the blockchain through the victim’s transaction. It must be noted that before the victim’s transaction is mined, the attacker must not only create, sign, and broadcast the conflicting transaction, but also first run Shor’s private key execution algorithm.

It is clear that time is crucial for such attacks. Thus, the level of performance of quantum computers dictates the probability of success of this threat vector.

Selfish mining: In this potential attack vector, an attacker could theoretically use Grover’s algorithm to gain an unfair advantage in mining.

This quantum computing routine helps search for unstructured data and can provide a square jump in the hash rate.

The ability to rapidly mine by sudden quantum acceleration could lead to price destabilization and control of the chain itself, resulting in possible attacks of 51%.

Combined attacks: By combining the above two vectors, an attacker could theoretically build a secret chain and selectively publish blocks to reorganize the public chain.

How to defend against these attacks?

Data collected through the mempool API can be used to run real-time machine learning algorithms to spot anomalies in the transaction fees offered and thus mark transaction abduction attempts.

Such algorithms can also help spot sharp jumps in block hash and raise warnings about possible “selfish mining” accordingly.

Dynamic AI models can calculate the risk of fraud during transactions at any time until confirmation.

These models can infer the potential earnings of a fraudster for each threat vector.

Insurance products can be designed to cover the risk of fraud during the transaction, whose prices can be calculated dynamically based on the probability of fraud in accordance with the models.

In addition, a “reputation score” can be calculated for each node in the blockchain. APIs that collect device details, IP address, etc. can be used to group activities (mining and/or transactions) into homogeneous clusters, and therefore have a high chance of originating from the same users.

Such patterns can also be used to directly detect quantum computers in a blockchain. A “reputation score” could be of particular importance in the case of combined attacks because opponents use a multi-vector approach to stealing funds.

Intelligent user interface design can help alert customers to the risk of address reuse, through the strategic placement of warning messages.

The principles of efficient incentive design can be used to formulate changes in consensus rules, such as applying margins to transaction fees for p2px and reusing p2px wallets.

This would lead users to move to safer behavior. Additionally, this would result in shortening the confirmation time of such transactions because the miners would select them first, thus narrowing the window of opportunity for the opponent.

The growth of quantum computers, with internal states consisting of many qubits, may raise questions about the basic cryptographic security of Bitcoin.

Even users who adhere to best security practices can still be affected in situations where a significant number of Bitcoins have been stolen from insecure addresses, causing increased price volatility.

A wide range of initiatives in post-quantum cryptography is underway to mitigate such scenarios.

It is crucial to note that the emergence of “quantum supremacy” does not necessarily mean the weakening of the bitcoin ecosystem.

Better quantum computing systems will eventually provide opportunities for a slow economic transition to better tools.

While the phase of asymmetric use of quantum computers can generate multiple threat vectors, fraud risk management principles along with user awareness can help design solutions for such a future.

Elon Musk in one word breaks down the value of Shiba Inu: Brutal truth brought down the price by 20%

The price of Shiba Inu (SHIB) fell by a sharp 20% after Elon Musk announced that he did not own any of these crypto-coins.

One of the cryptocurrencies that have had a huge increase in value in the last few months, Shiba Inu has suffered a drop of 20% just after one tweet by Elon Musk.

To put it bluntly, Shiba Inu is a token based on the Ethereum ERC-20 standard and belonging to the meme-coin group.

This essentially means that its value is not determined on the basis of usability, but on the basis of current popularity.

One tweet changes everything

In early October, Elon Musk posted a picture of his Shiba Inu dog Floki, which sparked an avalanche of interest, so the price of Shiba Inu coins began to rise sharply, recording an incredible 500% growth.

With or on a shield

However, just as things like this can boost popularity, so unseen tweets can do just the opposite.

One of the great propagandists of Shiba Inu coins – ShibaInuHodler on Twitter asked Elon Musk how many Shiba Inu coins he has, followed by a short and cold answer: “None”.

While this sounds like the plot of a Latin American series in which Elon eventually learns that she is her own mother, we wanted to show you how much meme-coins are kept on glass legs, and how much they depend on the mood of the celebrities who propagate them.

Without the right laws of price movements

Elon Musk has so far always supported Dogecoin(DOGE) and Shiba Inu(SHIB) coins and has caused their prices to fluctuate, completely contrary to the laws of any financial instrument.

Community reactions were polarized after Musk’s tweet.

And while some have advised Musk to invest coins in Shiba Inu, others have asked the community to “stop bothering celebrities, when the community is great even without such nonsense,” which is true.

Elon Musk, on the other hand, spent a little more time on Twitter the same day, explaining to users the benefits of DOGE coins, saying, “A lot of people I’ve talked to on Tesla production lines or in building SpaceX rockets own Doge.

They are not financial experts or Silicon Valley technologists.

That’s why I decided to support the Doge – because it acts as a cryptocurrency for ordinary people.

A new crisis may come, like the one in 2008: The culprit will be the cryptocurrency

Cryptocurrencies have no real value and regularly record extremely large fluctuations, which threatens the stability of financial markets

the governor said.

The deputy governor of the British central bank believes that cryptocurrencies if they are not subject to stricter regulations, can cause a global financial crisis like the one from 2008.

Sir Jon Cunliffe, the deputy governor of the Bank of England, stated that the value of the crypto-market increased from 16 billion dollars to 2.3 trillion in just five years, as it is worth today.

It reminds him of the growth of the value of the mortgage loan market, which in 2008, before its collapse, amounted to 1.2 billion dollars.

When the value of anything in the financial system grows so fast, and that growth takes place in an unregulated space, the financial authorities have to deal with it.

he said.

Cunliffe believes that the cryptocurrency market should be legally regulated, but he points out that this should not be exaggerated either, so as not to discourage the introduction of innovations in the financial sector.

He believes that the technology on which cryptocurrencies are based has a lot to offer, but it should be used with caution.

In his opinion, and in the opinion of the Governor of the Bank of England, who has already mentioned it several times, cryptocurrencies have no real value and regularly record extremely large fluctuations, which endangers the stability of financial markets all over the world.

Cunliffe reminds that their value can be affected by even one statement of a billionaire, like Elon Musk, or the decision of one country to declare them illegal, which represents a great risk for investors.

If they remained only in the digital world, then cryptocurrencies would not pose a great danger to the financial system, he believes.

But now they are intertwined with the traditional business of banks and other economic organizations. Also, more and more institutional investors are entering this field.

And every field where large sums of money are circulating needs to be regulated and supervised, says the deputy governor.