According to OpenAI’s o3 model simulation, threats to blockchain technology might soon be on the horizon from quantum computing breakthroughs. The simulation highlights the potential for quantum computers to reverse-engineer private keys from public data, using algorithms such as Peter Shor's. This presents an enormous danger to all cryptocurrencies, Bitcoin, Litecoin and every other one of them.
With Shor’s algorithm, we have a theoretical proof that one can efficiently factor large numbers. This represents an existential threat to the cryptographic assumptions under which most cryptocurrencies operate. From Bitcoin to Ethereum to Monero, these currencies use the challenge of factoring massive numbers to protect digital wallets and approve transactions. Quantum computers could potentially undermine this security.
As of today, more than 6.2 million BTC worth about $648 billion live in addresses with known public keys. Once quantum computers become powerful enough to decrypt all the necessary information, over 10 million wallets could be at risk.
Several cryptocurrencies face critical quantum-exposure risks. Bitcoin, with its potential 25% of supply trapped in illiquid hands, would be the most susceptible. Litecoin, Bitcoin Cash, Dash, Shiba Inu and a host of other ERC-20 tokens are equally if not more vulnerable to this malevolent menace.
Features such as ring signatures, stealth addresses and zero-knowledge proofs provide strong safeguards against old-fashioned decryption techniques. These can provide only thin protection against quantum attacks.
Technologies used by Monero provide strong protections against flowing water decryption tools. These relatively new protections may not stand up to the rapid advancements being made in quantum computing. The o3 model’s simulation leads us to the conclusion that cryptocurrencies must be forward-thinking in tackling quantum-resistant security measures to protect their networks and currencies from future threats.
Cardano is an interesting counterexample to the quantum computing and blockchain security risk discussion. The o3 model addressed Cardano's situation.
If crypto were judged on whitepapers alone, [Cardano] would thrive. But Q-Day doesn’t wait for peer review." - o3 model
The threat that quantum computing poses to existing cryptographic systems makes the move to quantum-resistant algorithms a requirement, not an option. Simply put, quantum technology is moving fast. To truly safeguard our blockchain assets, we need to be forward-looking and make comprehensive quantum-resistant safeguards a priority.