Quantum Computing and Blockchains

Key Takeaways

• Recent advances in quantum computing have brought forward expectations for a future quantum threat, accelerating post-quantum planning across governments, tech companies, and blockchain networks.
• Today, viable post-quantum standards exist, with the focus increasingly shifting from research to implementation.
• In our view, quantum computing is a manageable risk for blockchains, with the primary challenge centered on coordinating and executing a timely and orderly migration across decentralized networks.

Quantum Computing Is Becoming a More Relevant Cybersecurity Consideration

The emergence of a real-world Cryptographically Relevant Quantum Computer (CRQC), often referred to as “Q-Day,” would mark the point at which a quantum computer becomes capable of breaking widely used public-key cryptographic systems. Recent advances in quantum have shortened expectations for when such a milestone could be reached. While no functional CRQC exists today, and significant physics, technical, and engineering hurdles remain before one becomes feasible, these developments have increased the urgency of post-quantum planning across governments, tech companies, and blockchain networks.

Quantum Risk Extends Far Beyond Digital Assets

The same public-key cryptography used by blockchain networks is also widely deployed across government networks, financial systems (e.g. SWIFT interbank transfers), and internet protocols that facilitate secure online activity (e.g. HTTPS).

Digital assets often receive disproportionate attention in discussions around quantum risk because they represent a readily monetizable target for potential attackers. However, the broader transition to post-quantum security is a broad cybersecurity challenge well beyond blockchains.

The Transition to Post-Quantum Security is Already Underway

Over the past decade, researchers, standards bodies, governments, and tech companies have worked to develop and validate quantum-resistant cryptographic standards. Today, multiple viable post-quantum standards exist, and focus is increasingly shifting from research towards implementation. Governments globally have established migration roadmaps, while major tech companies including Google and Cloudflare have accelerated their own timelines for deploying post-quantum security measures.

Coordination and Execution are Key to Successful Blockchain Migrations

Blockchain networks face different challenges than governments and tech companies as they prepare for post-quantum migrations. The scope of required cryptographic changes for many blockchain networks is comparatively narrow; for Bitcoin, for example, the critical required upgrade involves replacing a single digital signature algorithm with a quantum-resistant alternative. From where quantum progress stands today, we believe it is a much less daunting task to upgrade blockchain networks (including Bitcoin and Ethereum) to a quantum-secure standard than it is to build a CRQC capable of breaking the cryptography that secures them.

However, the decentralized nature of blockchain governance makes implementation more complex. Unlike traditional organizations with centralized decision-making structures, blockchain upgrades require broad consensus across a diverse ecosystem of independent stakeholders. Success will ultimately depend on how effectively these communities coordinate the transition in a timely manner while maintaining network stability and user confidence.

Conclusion

We view quantum risk as one of the few remaining walls of worry for the asset class and expect tangible progress on well-executed post-quantum migrations to be rewarded with higher valuations over time. Assuming a successful migration, we believe blockchains should emerge stronger and more resilient from this transition, reducing a meaningful source of uncertainty and supporting broader adoption over time.

Learn more by reading our full whitepaper on Quantum Computing and Blockchains.

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