By Scott Totzke
The financial world is abuzz with talk of blockchain, and for good reason. Blockchain is the technology upon which the Bitcoin digital currency is built. It has the potential to disrupt the finance industry by empowering a group of individuals or companies to maintain a shared ledger with no need for central administration. Transformative uses of blockchain might include:
- fast, peer-to-peer payment, clearing, and settlement
- provenance tracking for supply chain management and real-time regulatory compliance
- inter-organizational record-keeping for title transfer and notary services
Government and business leaders in every corner of finance are experimenting with blockchain solutions. But these projects risk becoming dead-on-arrival if their designers fail to prepare for the looming threat of quantum computers.
Blockchains are vulnerable to the security threat of quantum computers.
Quantum computers threaten blockchain technology because blockchains are made possible through the clever use of cryptography. As with any computer system that relies on cryptography, the security of blockchain rests upon the underlying cryptography being unbreakable. If that cryptography is found to be vulnerable to attack, then all the promise of blockchain would be lost. When quantum computers arrive, the encryption technology blockchain relies on to protect the integrity of a transaction will become obsolete. IT departments will need to implement a subsequent shift, migrating to quantum-safe encryption. The migration process will ultimately take another seven to 10 years to complete, leaving valuable data exposed and vulnerable to attack.
Overhauling financial systems is a massive undertaking that need not be implemented twice.
It takes many years for financial institutions to roll out new computer systems. By the time all those new blockchain projects are ready for the light of day, there might be only a year or two remaining until quantum computers are built. Any blockchain project that relies on today’s quantum-vulnerable cryptography would be unusable at that point.
Meanwhile, academic and industry research teams – including IBM, Microsoft, and Google – are pushing hard to build the first quantum computers to take advantage of their power to make new scientific discoveries. Experts believe we could see commercial quantum computers capable of breaking our cryptography as early as 2026. Once quantum computers make it out of the lab, they could wreak havoc not only upon blockchain, but upon the entire Internet.
To meet the looming threat of quantum computers to cryptography, researchers are designing and testing new cryptosystems that can withstand attacks from quantum computers. NIST, the US government standards body, has put out a call for proposals for quantum-resistant cryptography.
Any institution investing in blockchain solutions cannot afford to ignore the threat of quantum computers to the cryptography upon which those solutions rely. Smart investors in blockchain will do what it takes to have quantum-resistant cryptography baked into their blockchain solutions from day one.
About Scott Totzke
ISARA Corporation’s CEO, Scott Totzke, is responsible for building the organization that is developing and implementing quantum-resistant products. Prior to co-founding ISARA, Scott was Senior VP of Enterprise and Security at Huawei where he was responsible for launching Huawei’s R&D office in Waterloo.