With the rise of quantum computers, one of the biggest concerns in the provides protection to crypto wallets, they are viewed as a looming existential threat.
Cryptocurrency gets its name from cryptography, a field of mathematics dedicated to encrypting and decrypting messages. Thanks to cryptography, e-commerce websites, social media, banking apps and pretty much any exchange of sensitive data can exist without the threat of hackers intercepting the data. Bitcoin was the first blockchain in existence, a computer network that uses crypto mining is so energy intensive.
As Decentralized Finance (DeFi) sector holds many billions of dollars in value (as of 2022), there is a tremendous economic gain for anyone who can crack the blockchain's cryptography.
While A Likely Threat, There Is Time To Prepare
This is not a good thing for blockchain technology. While some blockchains were designed to be 'quantum resistant' and will survive the rise of quantum computing in their current form, other blockchains like Bitcoin and Ethereum are not equipped to deal with an attack from a quantum computer. Furthermore, this attack would destroy the security of Ethereum's decentralized applications (dApps) as well as every internet application that relies on AES and SHA-256 encryption, which most of the internet is built on.
Fortunately, a quantum computer would need millions of 'qubits' to break modern cryptography, but currently, they have less than 100 qubits. So while quantum computers can do amazing things like simulating the physics inside a black hole, they cannot yet reverse a cryptographic hashing algorithm and won't be able to for some time. Also, blockchains can be upgraded as long as all the miners/validators running the network agree to implement the upgrade. While blockchain upgrades are extremely rare due to disagreements from independent miners/validators, quantum resistance will be a matter of life or death for blockchain technology. There is no rational excuse for any miner/validator to refuse a quantum resistance upgrade when the threat of a quantum attack becomes plausible.
While quantum computers threaten blockchains, this threat won't become a reality for at least a few decades (barring major technological breakthroughs). Bitcoin's creator(s), Satoshi Nakamoto, did not anticipate the rise of quantum computing, but they did provide Bitcoin with the ability to be upgraded. There is still time for mathematicians to discover better forms of quantum-resistant cryptography and for blockchain miners/validators to implement it.
Source: CoinTelegraph