Could Quantum Physics Destroy Bitcoin?
[The following post is by TDV Chief Researcher, Justin O'Connell]
[Editor's Note: Be sure to view TDV Week In Review, November 16, 2014, below this week's Wrong Place, Wrong Time Notes.]
Quantum physics and quantum computing have been trendy topics for more than a decade. So trendy, even The Onion, an online satirical magazine, seemingly mocked the rate at which online magazines were publishing articles on the topic in 2001:
At a press conference Monday, Haggar physicists announced the successful development of “Quantum Slacks,” attractive, wrinkle-free pants that paradoxically behave like both formal and casual wear.
By exploiting a rare duality in “Schroedinger’s Pants,” according to The Onion, the non-Newtonian pants could simultaneously behave like formal wear and casual wear. But is the portrayal of quantum computing in most published articles accurate? As Scott Aaronson wrote in Scientific American:
A common mistake…is to claim that, in principle, quantum computers could rapidly solve a particularly difficult set of mathematical challenges called NP-complete problems, which even the best existing computers cannot solve quickly (so far as anyone knows). Quantum computers would supposedly achieve this feat not by being formal and casual at the same but by having hardware capable of processing every possible answer simultaneously.
It has been more than thirty years since physicist Richard Feynman was the first to theorize about quantum computers. One of the first things that comes to mind in terms of what quantum computers could do is their cryptography-breaking abilities. But major obstacles remain in order to harnessing this technology, and in the end, it is unclear if quantum computers would be that much quicker than classical computers at many functions. One considerable obstacle for a quantum computer would be preventing it from interacting with its environment, which would introduce errors.
One-Shot Memory Devices
Many bitcoiners wonder if quantum computing would undermine Bitcoin, which depends on SHA-256, a system of encryption. There is truth to the notion that quantum computing could offer benefits to crypto-assets.
For intsance, research conducted by the National Institute of Standards and Technology (NIST) and Yi-Kai Liu has recently led to a way to make a security device that has proved difficult to engineer: “a ‘one-shot’ memory unit, whose contents can be read only a single time.”
Liu presented the research at this week’s Innovations in Theoretical Computer Science conference, demonstrating how the laws of quantum physics might allow for the development of one-shot memory devices, which provide a wide-range of possible applications like protecting the transfer of large sums of money electronically, including via crypto-asset transfers. As phys.org explains:
A one-shot memory might contain two authorization codes: one that credits the recipient’s bank account and one that credits the sender’s bank account, in case the transfer is canceled. Crucially, the memory could only be read once, so only one of the codes can be retrieved, and hence, only one of the two actions can be performed—not both.
“When an adversary has physical control of a device—such as a stolen cell phone—software defenses alone aren’t enough; we need to use tamper-resistant hardware to provide security,” Liu says. “Moreover, to protect critical systems, we don’t want to rely too much on complex defenses that might still get hacked. It’s better if we can rely on fundamental laws of nature, which are unassailable.”
There is currently no way to build tamper-resistant chips. Scientists have attempted to use quantum mechanics so that information that is encoded into a quantum system acts differently than the classical system.
Liu is exploring an approach which stores data using quantum bits, called “qubits,” which take advantage of quantum properties like magnetic spin to represent digital information. Utilizing a technique called “conjugate coding,” two secret messages – like separate authorization codes – can be encoded into the same string of qubits so that a user can retrieve either one of the two messages. But as the qubits can only be read once, the user cannot retrieve each.
This approach in part stems from the quantum phenomenon known as “entanglement,” in which two particles can affect each other even when separated by great distances.
Liu has noticed in specific kinds of physical systems it is difficult to create and use entanglement. He shows in his paper via a mathematical proof that if an adversary is not able to use entanglement in its attack, that adversary will not be able to retrieve both messages from qubits. Thus, when the right physical systems are used, the conjugate coding method becomes secure in the end.
“It’s fascinating how entanglement—and the lack thereof—is the key to making this work,” Liu says. “From a practical point of view, these quantum devices would be more expensive to fabricate, but they would provide a higher level of security. Right now, this is still basic research. But there’s been a lot of progress in this area, so I’m optimistic that this will lead to useful technologies in the real world.”
How They Work
Conventional computers process binary code – an information currency existing in one of two states: 0 or 1. Quantum computers do not use the two-state contraint, instead using quantum mechanical theories like angular momentum. In a quantum state, an atom maintains a condition known as superposition, holding the value of both zero or 1 or both values simultaneously.
“This juggling trick holds out the possibility of parallel processing on a massive scale.” As phys.org writes, “An algorithm that a conventional supercomputer might take years to break could be cracked by so-called qubits, or quantum bits, in a fraction of the former time.
“The special properties of qubits qill allow quantum computers to work on millions of computations at once,” says IBM. “For example, a single 250-qubit state contains more bits of information than there are atoms in the universe.”
Still, there remain engineering roadblocks to reach that end, like that, in order to achieve the quantum state, “a cloud of atoms has to be cooled to near absolute zero and controlled by pulses of laser.” All of this is expensive. Very much so, with highly protective labs representing “an enormous practical challenge.”
Bitcoiners are well-aware of the technology and, at least, some of its implications.
The Bitcoin Wiki writes:
While ECDSA is indeed not secure under quantum computing, quantum computers don’t yet exist and probably won’t for a while. The DWAVE system often written about in the press is, even if all their claims are true, not a quantum computer of a kind that could be used for cryptography. Bitcoin’s security, when used properly with a new address on each transaction, depends on more than just ECDSA: Cryptographic hashes are much stronger than ECDSA under QC. Bitcoin’s security was designed to be upgraded in a forward compatible way and could be upgraded if this were considered an imminent threat.
See the implications of quantum computers on public key cryptography here http://en.wikipedia.org/wiki/Quantum_computer#Potential
The risk of quantum computers is also there for financial institutions, like banks, because they heavily rely on cryptography when doing transactions.
The same is true for all sensitive internet data. It all relies on cryptography. What we are seeing is something that is common to systems. Darwin’s theory of evolution posits that within a closed system an arm’s race of sorts transpires. Duck genitalia is a good example of this. Male ducks and female ducks have such a sordid sexual history their genitalia has spiraled off into an arm’s race of defenses and offenses. Presumably, in order to stave off would be rapists, female ducks genitalia became corkscrew-like. The male penis followed suit, then becoming corkscrew like. Technology is in a similar feedback loop. While quantum computing might undermine modern cryptography, one can only expect a more robust and securer field of cryptography to respond. This is a qualitatively good thing.
Justin O’Connell is the Chief Executive Officer of GoldSilverBitcoin. He is also the author of the bitcoin book, Bitcoinomics, and administrator of the Bitcoinomics website. Justin is also a co-host at Our Very Own Special Show, a lifestyle podcast about music, news, life and other topics, and head researcher at The Dollar Vigilante. He lives in San Diego, California.
Before we get to the review, be sure to check out TDV Homegrown. In the latest TDV HomeGrown Jeff Berwick addresses understanding accepting change. TDV Senior Analyst Ed Bugos looks at the recent rebound in gold prices while Sinn Hooper continues with her series Drugs, Sex & Rock N’ Roll for Ancaps. Subscribe to The Newsletter today, and receive TDV’s HomeGrown, as well as special reports, including Getting Your Gold Out Of Dodge. This is a true value and will help you learn and understand the times in which we currently live on the financial, economic, political, technological and personal fronts.
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On to the review…
Monday November 10
WHY THIS IS NOT YOUR EIGHTIES’ BEAR MARKET IN GOLD
Senior Analyst Ed Bugos on the gold market.
Third Longest Bear Market in Gold Stock History
We are midway through the fourth year of a bear market in precious metals shares that began shortly after April fools day in 2011. The correction didn’t surprise us; at least not until it continued past 2012.
Tuesday November 11
TDV contributor Mark Jeftovic on war.
It’s that time of year again where we are all encouraged to “Remember the Fallen”. The words “Lest We Forget” adorn everything from bus shelters to fast food wrappers. What is it we’re not supposed to forget? Ostensibly, we’re not supposed to forget those who killed and were killed by, other people (usually “over there”) in the course of “defending our freedom”.
Wednesday November 12
OPERATION ONYMOUS TAKES DOWN TOR SITES AS WE WARNED: WHAT IS THE FUTURE OF DARKNETS?
Jeff Berwick on a TDV warning come true.
Online anonymous marketplaces create a wonderful place for people to engage in as close to a free market situation online as they can get. It’s not perfectly free, of course, because in a truly free market these players wouldn’t have to worry about people in costumes with guns (police) coming after them and throwing them in a cage. As the world has seen, there is incredible demand for online anonymous marketplaces.
Thursday November 13
THE UN TO US POTSMOKERS: YOU CAN’T SMOKE THAT
Legitimately be sovereign is yourself, but let’s save that nugget of wisdom for another day.
That aside, the United Nations (UN) was setup in the wake of World War II. The first iteration of a global governance tool was proposed in the wake of World War I, as the League of Nations, but the US rejected it.
Friday November 14
AN AUSTRIAN GROUNDED WEALTH ADVISOR ON THE SAD STATE OF THE MARKETS & INDUSTRY
An interview with Chris Casey of Windrock Wealth Management.
The End Of The Monetary System As We Know It (TEOTMSAWKI) has never happened before on such a global basis and therefore it will be fraught with all manner of unexpected consequences. Even someone who is well aware of the impending collapse of fiat currencies can still make massive, wealth-destroying errors. Yet, when it comes to investment management, likely not 1 in 100 wealth managers is even aware of TEOTMSAWKI as even a possibility much less are taking active steps to guard their clients from the massive volatility and crisis’ to come.
THE IMPORTANCE OF BEING: WEEKEND VIGILANTE, NOVEMBER 15, 2015
Jeff on his newest realizations…
As you’ve noticed I haven’t been writing regularly on the weekends for the last few months. I alluded to my intention to do this a few months ago when I said that I wanted to spend more time with my family and find a more balanced and connected/deep/spiritual lifestyle.
As with almost everything I write about I don’t just talk about it but I do it and I have been exploring this lifestyle for the last few months and have discovered many insights that you might find interesting.
TDV VIDEO
This week, Jeff interviews Ron of Pulse Firearms, Jeff Siegel, Dan Dicks on the Anarchast.
Have a look at our wide array of informative videos featuring interviews, opinions, and analysis on TDV’s media page.
TDV SERVICES
Don’t forget, TDV is much more than a newsletter. We also offer many of the solutions to the problems we identify in the letter to help people internationalize their self and wealth to protect themselves from The End Of The Monetary System As We Know It (TEOTMSAWKI). Check out all our services designed to help you gain more freedom in your life here:
Remember, if you have any questions, concerns, or issues with what you’ve read on TDV, write us at: [email protected].
Thanks as always for reading or subscribing!
Source: https://www.dollarvigilante.com/blog/2014/11/16/could-quantum-physics-destroy-bitcoin.html#6639
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