The blockchain and the rise of quantum computing

Despite the rise and the fall of crypto-currencies in 2018, Bitcoin and more generally the blockchain technologies supporting crypto-assets are continuing to be looked as an alternatives to the existing transactional systems, due to the their multiple advantages such as decentralisation, persistency, anonymity and auditability. 

A considerable number of enterprise wide initiatives related to their adoption are starting to be consolidated (even if still unstructured and lacking strategic vision), covering different sectors like finance (digital assets, remittance, online payment), IoT, reputation systems, public and social services.

From the technology point of view, there is still much to do: some businesses are reluctant to invest in the "immaturity" of the blockchain, even because usually it is missing the focus on a specific use case with a real commercial value, and the switching cost (in absence of a clear strategical approach based on market dominance and regulatory requirements) becomes hard to justify.

Some consideration in terms of security and privacy, especially in absence of mature governance models, arise in the last period and the main concerns about its longevity is related also to the emergency of other new technologies, among which, presenting the highest disruptive potential, has to be mentioned the quantum computing. 

Inherent quantum weakness

Today customers (like bank's clients) are protected by multi factor systems: plastic card, digital/physical token, security questions, biometric factors... But blockchain's customer? Its sole line of defence is the one-way function (digital signature) whose cracking is no far to be achieved via the emerging effectiveness of quantum computing (Shor's algorithm). Today, the existing quantum computing systems are much less powerful than the classical computers, but the design of new algorithms (for example the variational quantum factoring) reveals that such kind of attacks could be successful sooner than expected. 

Proof-of-works, like the one used by Bitcoin, are also showing weakness and could be hackable under a quantum attack. In particular, the usage of Grover's search algorithm, reveals the possibility to perform proof-of-work using quadratically fewer hashes than the classical version.

Even if the the more optimistic estimate says that it could not happen prior a decade, a modest improvement could put feasible certain attacks to mining pools (quantum clock speed is presumed to increase following a quantum version of Moore's law).

Quantum resistance and "quantum internet"

Fortunately new quantum signature scheme are emerging, representing a valid alternative to the actual securing schemes used by the blockchains. Quantum-safe encryption schemes has been already investigated (e.g. XMSS, Rainbow, DILITHIUM), and they could offer the robustness and effectiveness to provide prevention against tampering.

Regarding the proof-of-work, alternative form of consensus algorithm are being studied. The most important that are gaining attention are Momentum, Cockoo Cycle, Equihash.

Many initiatives in the chain landscape has been already started for answering to these new requirements, even if they haven't still provided concrete effectiveness. BlockDAG, for example, inspired by the IOTA ledger technology, makes usage of the tangle modeling that stores transactions as a stream of individual transactions entangled together (a directed acyclic graph, DAG), and it is affirmed that it will offer, other then scalability benefits, also quantum attack resistance.

Another approach is the Quantum Resistance Ledger (QRL), that uses a secure hash-based pseudo-random function, build on the XMSS scheme, to ensure resistance to quantum computing attacks.

An important aspect is that quantum communication is inherently authenticated: the state of particles used for encoding qbits and enabling communication cannot be copied without being altered. The possibilities to enable quantum enforcement in the communication permits the definition of a new kind of internet protocols for supporting the needs of direct interactions of the involved parties. This means that the blockchain can benefit of an improvement in terms of security, speed and throughput through the definition of a quantum internet, a network based on quantum teleportation where security, confidentiality and integrity are ensured by quantum technologies, like the quantum key distribution (QKD).

Improving the value chain

All these exciting improvements offer to the blockchain the possibility to overcome the continuous statements of death, which are launched after every collapse of a crypto-asset related to it and for the lack of strategic vision that still persists at enterprise level.

Solving these security concerns through the convergences of quantum security capabilities on top of the decentralised peer-to-peer network, can help to promote its wider adoption and increase the value chain it promised to offer in the last two years. Especially for the public permissionless models, the shift from the short-term value of reducing cost (predominant) to a long-term new business models generator, is strictly related to the robustness and trustworthy required for attracting users, and the advantage of the inducted network effect that would be generated.