Can Ethereum Survive a Quantum Accident?

Quantum computing may sound like science fiction, but it could be coming sooner than expected.

In the year January 11, 2024 The World Economic Forum identifies artificial intelligence (AI) and quantum computing as emerging threats in a report that examines how quantum computing could threaten the current landscape of technology.

While computer scientists and developers agree that quantum computing will take a few years to develop, research in the field is very active.

In the public sector, all G7 countries are actively involved in quantum computing projects. Seven of the top 10 technology companies in the private sector are “publicly competing for market dominance in some capacity,” according to Quantum Resistant Ledger.

So when will quantum computing become the power to threaten modern cryptosystems like those that protect cryptocurrencies?

According to a December 2023 report from Reuters, Thilo Kunz, executive vice president of cybersecurity firm Quantum Defense5e (QD5), told Defense Information Systems Agency officials that Q-day — the day quantum computing could breach existing security standards — could come. Soon 2025.

Major organizations in the financial world have noticed. In June 2023, the Bank for International Settlements launched “Project Leap” with the Bank of France and the Deutsche Bundesbank, which aims to develop quantum-proof payment systems.

So, with dire forecasts and central banks scrambling to protect payments, how can the blockchain and crypto industry prepare for Q-Day? Anyone ready?

Why is quantum computing dangerous for blockchain?

Renowned computer scientist and founder of the post-quantum-proof blockchain XX network, David Cham, explained to Cointelegraph how quantum computing could “steam” the blockchain.

Quantum computing could undermine the SHA-256 algorithm – the cryptographic hash function that serves as the primary firewall to protect access to blockchain-based assets such as cryptocurrencies.

Next, quantum computers can break blockchain consensus by creating fake messages, which can disrupt the consensus protocol. Chaum said:

“Quantum computing can kill existing blockchains by falsifying nodes' signatures. You can take them down.

They can also easily break private keys, making funds vulnerable to theft.

Vitalik Buterin's idea to defend Ethereum

Vitalik Buterin, founder of the Ethereum network, introduced a possible solution to overcome the blockchain's quantum challenge.

In the year On March 9, 2024, Buterin proposed a solution involving a hard fork, opening a debate on how to prepare the blockchain for a quantum emergency.

Buterin explained that quantum computers can hack an Ethereum account and reveal the private key using only the public key.

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As Buterin explained, the only Ethereum accounts that survive a quantum attack are wallets that haven't completed a transaction because they haven't exposed their public key.

Of course, this is not a common practice among crypto holders, so almost all wallets are at risk.

For Buterin, the technology needed to defend Ethereum against a quantum attack could be developed “tomorrow.”

“We're already well on our way to making a very simple recovery fork to handle this kind of situation.”

Buterin's proposed solution relies on verifying ownership of crypto assets or wallets by implementing a backup key as a failsafe.

The idea is that in 2021 “W-OTS(+) up my Sleeve! A Hidden Secure Fallback for Cryptocurrency Wallet” by cryptographers Chaum, Mario Larangeira, Mario Yaksetig and William Carter, who proposed a key generation method where users generate a backup key, which is securely stored in a secret key via a signature scheme.

In the event of a secret key leak, the backup key will generate a proof of ownership and transfer their funds to an updated quantum-resistant blockchain – essentially through a hard fork in the blockchain.

So, if a quantum emergency happens, users download new wallet software and verify their ownership with the backend. Buterin mentioned how “a few users lose their money” in this process.

A speculative hard fork will return the Ethereum network to the block where a large-scale theft occurred.

The impact of the quantum solution on the price of ETH

Cham says that Buterin's solution is not perfect and could cause some chaos for Ethereum users.

As Cham explained, the emergency solution suggested by Buterin would force the chain to be rebuilt if Ethereum does not implement a quantum defense mechanism before a quantum attack.

The cryptographer explained the need to build a new chain with quantum-proof measures built into the core. Once found, the assets can be transferred to a new wallet in the new chain.

During this process, the Ethereum blockchain must be suspended indefinitely until it can be switched back to a new quantum-resistant blockchain. Cham said this procedure may take years.

One of the most active blockchains said that the consequences of a sudden stop should not be ignored, which could be disastrous.

“There will be a big time gap. I'm not sure if the price of Ether will survive this gap.

John Woods, chief technology officer at the Algorand Foundation, told Cointelegraph that while he believes Buterin is “highly competent,” Ethereum may take further action: “This post clearly represents an emergency action plan and is not.” A great transition for Ethereum into the post-quantum cryptography era.

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Algorand has implemented a post-quantum method using Falcon signatures, one of three signature algorithms approved by the National Institute of Standards and Technology for standardization.

Woods encouraged the use of Falcon for interoperability, as its implementation is “not limited to Algorithm and has the potential to be adopted by other distributed ledger technologies, blockchains and related systems.”

Ethereum appears to have established an emergency protocol to survive in the event of a quantum emergency.

However, the emergency solution has serious caveats, which should make the Ethereum developer community strongly focus on developing quantum-proof measures before Q-day arrives.