Google’s announcement of a technological breakthrough in quantum computing has created a lot of concern and uncertainty about its impact on Bitcoin. Although Google’s new Willow chip is still years or even decades away from having an effect on Bitcoin, it raises a valid question: What will quantum computing do to Bitcoin?
The short answer: Bitcoin will adapt. Quantum computing will not arrive tomorrow. It will take time. Research is already investigating ways to address quantum computing in Bitcoin.
Remember that security in Bitcoin occurs at two levels: within transactions and between transactions. Within transactions, virtual signatures lock and unlock currencies. They are the first line of defense within Bitcoin. Bitcoin’s virtual signature rule set requires a signature. for any user to spend their Bitcoins. All nodes on the network can determine that the user has this signature, without knowing what the signature is. Historically, Bitcoin has used ECDSA, but since Taproot (Bitcoin’s last major update in 2021), Bitcoin has used Schnorr signatures, which use hashing purposes and are conceptually easier and more personal than ECDSA.
Schnorr signatures are not quantum resistant, but their implementation has shown the way forward for an upgrade of the signatures. Taproot was a convenient fork, so it was a backwards compatible upgrade. Any Bitcoin user can choose to use a Taproot payment solution. (p2tr) than the old public key hash or SegWit. If a quantum computer could one day break those Schnorr signatures, then I think core developers would adopt a quantum-resistant signature scheme and implement it as a convenient fork within Bitcoin Core.
Quantum resistance schemes are now possible. Juan Garay, Texas A Cryptographer
The only challenge with this plan is dealing with those who are no longer active. The largest such business belongs to Satoshi Nakamoto, whose millions of bitcoins have not been replaced since they were mined in the early days of Bitcoin. Bitcoin Core developers will have the option to choose how to care for Satoshi coins. One option would be to ban them from the blockchain, which could lead to a hard fork. Hard forks are incredibly unpleasant, but there are perhaps a handful of cases in Bitcoin history where they would be necessary. This would be one of them, along with the timestamp factor (which I will talk about another time).
The other opportunity for a quantum computer would be to break SHA-256, the set of hashing rules widely used in Bitcoin. This is not only used in some Bitcoin addresses, such as public key hashing (p2pkh), and even Schnorr signatures, but it also bureaucratizes the basis of the security of the blockchain itself. Breaking SHA-256 would mean locating hash collisions and, in the most productive case, making the hash serve as invertible. At that point, the quantum computer could cause a 51% attack on the blockchain, which, in the most productive scenario, would allow for a double spend of coins. For those budget Bitcoin internal addresses, the quantum computer would still want to break the characteristic rule set.
Bitcoin Core developers could then use this quantum-resistant hash function in place of SHA-256 throughout Bitcoin Core. All new blocks would be mined using this quantum-resistant hash function.
If a quantum computer could, in fact, break SHA-256, the highest and best use of this technology would be to mine bitcoin, not to perform a double-spend attack. A double-spend attack would be easy to detect and would disrupt the value of the bitcoins that were double-spent. Instead, a quantum miner should just use this new quantum computer to mine all remaining bitcoin, which it would be able to do if it could tailor the transactions and blocks in a way that would generate a sufficiently small number to win the mining lottery every 10 minutes. This would be possible if the quantum computer could invert the SHA-256 hash operation.
Mining would cease to be a globally competitive industry and would simply be an oligopoly accruing to those with access to the quantum computer. Provided that more than one entity had access to this computer, bitcoin mining could continue as an industry, even if it is a duopoly between, say, Nvidia and Google. To avoid this scenario, the easiest fix would be to install a quantum-resistant hash function in place of SHA-256. This is not out of the question, since Schnorr signatures themselves utilize hash functions. Therefore, a quantum-resistant signature scheme would need to be immune to hash functions.
This problem is still a long way away, and with more and more economic value accruing to bitcoin, the incentives will grow year by year for researchers and developers to address it.
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