In the long run, the rise of Bitcoin is actually facing a risk that has recently become a hot topic in the stock market, but which most crypto investors may not have paid attention to: quantum computing.
This emerging technology has attracted widespread attention after Google announced a breakthrough with its new Willow quantum computing chip this month.
According to Google, Willow can significantly reduce errors, solving a key challenge in quantum error correction that has been studied in the field for nearly 30 years. In addition, Willow completed a "standard benchmark calculation" in less than five minutes. Even the fastest supercomputers today would take "10 to the 25th power" years to complete this calculation - a number far exceeding the age of the universe.
For the Bit and other crypto markets, the potentially fatal risk behind the development of quantum computing technology is: if this technology is used for hacking, thieves may easily steal Bit from supposedly secure digital wallets, leading to a Bit price crash.
The emergence of a long-term "natural enemy"
Relevant researchers say that quantum computing devices powerful enough to crack Bit may still take a decade or longer to truly materialize. Nevertheless, unless the Bit developer community can further upgrade its encryption technology, the progress of quantum technology will pose a long-term risk to Bit.
Arthur Herman, a senior fellow at the Hudson Institute in Washington, said that if someone acquires the ability to develop quantum computing hackers and decides to use this capability to attack cryptocurrencies, then the crypto world will have a time bomb waiting to explode.
Analysts also warn that quantum computing attacks on Bit could also have harmful spillover effects on traditional financial markets.
According to a 2022 study by the Hudson Institute, a quantum hacker attack on Bit could cause over $30 trillion in losses to the crypto and other markets, triggering a deep economic recession. Herman said that since the release of the research report, the potential losses caused by quantum hackers have continued to expand, as Bit has risen to around $100,000 and is gradually becoming a mainstream investment asset.
U.S. President-elect Trump has also promised to establish a strategic reserve for the government's Bit holdings, calling it the "digital Fort Knox" - Fort Knox is the most important military training base for the U.S. armored forces, and the Federal Reserve's vault is also located there.
However, quantum computing technology may allow hackers to easily raid this "digital Fort Knox"...
In standard computers, all data is fundamentally represented in binary, with 0s and 1s, while quantum computers are different, using "quantum bits" (qubits) to represent data, which can exist in a continuous state of mixing 0 and 1.
This allows quantum computers to quickly solve tasks that would take a standard computer more than a human lifetime. These tasks may include developing new drugs, predicting weather, or cracking encryption technologies used to protect sensitive data.
How will it affect the crypto world?
In the field of cryptocurrencies, for example, the most commonly used encryption method involves what is called a "public key", which is a very large number that is a multiple of two large prime numbers. These two prime numbers combined generate the so-called "private key". Data can be encoded with the public key and decoded with the private key.
Currently, crypto users keep their private keys secret, but public keys can be published or shared with the outside world. The advantage of this method is that a standard computer would take a long time to derive the private key from the public key, because "factorization" - finding the prime numbers that can be multiplied to get the public key - is very difficult.
But quantum computing will make factorization much easier. In 1994, an American mathematician designed an algorithm that, with a powerful enough quantum computer, could "factorize" a large number in just a few minutes.
From a cryptographic point of view, this breakthrough will not only threaten Bit, but also traditional finance, as many online banking systems use variants of public key encryption. But security experts warn that Bit may be a particularly tempting target for quantum hackers.
Skip Sanzeri, co-founder of the quantum security startup QuSecure, said Bit will become a target of frenzied attacks. Banks have some regulation, defense mechanisms, and the ability to protect customers, while Bit is almost the "Wild West". If your Bit is stolen, your wallet will not be compensated.
While hackers have stolen Bit in the past, their attacks have generally involved unauthorized access to crypto exchanges. Quantum computing attacks will be more stealthy, as they will cause people to doubt the security of the entire Bit network, not just the security of a few poorly secured crypto exchanges. Once quantum computers become powerful enough, all Bit will ultimately be at risk.
Some Bit wallets are particularly vulnerable to quantum hackers. For example, in the early days of Bit, Bit was stored in addresses with exposed public keys, including about 1 million Bit believed to belong to Bit's mysterious creator Satoshi Nakamoto. According to Galaxy Digital, about 1.72 million Bit (worth over $160 billion at current prices) are stored in these types of addresses, which have since been gradually phased out.
Many crypto executives have previously stated that Bit can ensure its security in the future by adopting new encryption methods that quantum computers cannot easily crack, but such a complete overhaul may take years. The bigger trouble is that due to Bit's decentralized nature, changing its technology requires widespread consensus among the people around the world maintaining its network - past similar upgrades have progressed slowly and controversially.
Even if the crypto community ultimately reaches a consensus on how to protect Bit from quantum hacking, there is another obstacle: existing Bit needs to be transferred to addresses that can withstand quantum computing. Every individual or business holding Bit needs to execute such a transfer, or risk having their Bit stolen by quantum hackers.
