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What cryptocurrency wallets are realistically safe from Quantum Attacks?

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Quantum computing and cryptography

Quantum computing is, impressively, nothing new. At least, in theory. Yuri Manin and Richard Feynman were already discussing, on paper, the theory behind quantum computation in the 1980’s.

Our computers work with data in form of bits: sequences of 0 or 1. Every information in our computer is actually “converted” to a way we understand from bits. Higher resolution images, for example, have much more bits in them than the mediocre ones with used to have in the past. Processing those bits into usable information takes time, which is proportional, of course, to how many bits would have to be processed. Our current first-rate processors can deal with much more bits in a less time than the old Pentiums could, that’s why we can watch full HD videos (which are, at their very core, series of 0 and 1) today which would be unthinkable 10 years ago. We can process information with computers as fast as their CPU power.

Quantum computers, on the other hand, rely on quantum physics to process not only 1 and 0 bits, but also countless superpositions of them. That makes the same final information much shorter to process. Nonbinary superpositions of 0 and 1 are called Qubits. Besides being very powerful, the implication to this processing power in cryptography is that they would be able to run a quantum algorithm called Shor’s algorithm, an algorithm formulated in 1994 which can solve the integer factorization problem, the backbone of most cryptocurrencies cryptographies.

Even if no quantum computer was even close to being practically built in 2006, some people were already worried about them in the cryptography community, and the Post-Quantum Cryptography (PQCrypto)  conference is being held since 2006, mostly because they knew that the consequences of quantum computing in current cryptography systems would be disastrous and they needed to find solutions.

As of today, developments in the quantum computing field are happening at a rate faster than we were expecting, while major companies, governments bodies, and institutions are investing heavily in it. The first “real” supercomputer was released by IBM in 2016, with a five-qubit processor. It’s not much more powerful than a very powerful computer, but it set a red alert as it proved that quantum computers could, indeed, exist out of paper. Last year was a very prolific year for the area, as you can check in this MIT Technology Review of Practical Quantum computers. Last month, Google launched a 72-qubit computer, reaching the quantum supremacy (a quantum computer so powerful no classical supercomputer could emulate its power).

So, should we really worry?

Every public-private key cryptography system used by cryptocurrencies is actually breakable by brute force attacks, as they rely on “solvable” problems (factorization of integers to find prime numbers), albeit this is not even close to feasible even with the most powerful supercomputers we have now – it would rely on an amount of processing power and energy that is unthinkable).

Single wallets are also relatively safe even from a fantastically powerful attack. Using Bitcoin as an example, because most the other major coins also use hashes as codes for public keys. Even possessing a very powerful quantum computer, one couldn’t target a specific public key from a known wallet (what people call their “public keys” is actually a short form of it, usually solved by miners and input in the blockchain in the real public key form) and try to derive a private key from it. That’s because you wouldn’t know the person’s public key, only their hash function (there are claims that Satoshi implemented hashes this way already previewing this problem). There are some mischievous workarounds to this, though. If you know exactly when a person made a transaction, you can look for it before it is completed (authenticated and inserted into a block) in the mempool, one place where the public key code gets fully visible. So, basically, anyone which sends bitcoins could be theoretically targeted, but people who only receive bitcoins are safe from targetted (but not random) attacks. In this case, looking for random wallets to steal would be really really easier than targeting a specific one.

Although the threat is real, one would need a processor with much more qubits than the most powerful existing quantum computer, Google’s Britestone with its 72 qubit processor, to break an SHA-256 algorithm such as Bitcoin’s or Ethereum: in a reasonable time, so we are absolutely safe for now. But, as quantum technology is developing a bit faster than we previewed, it could indeed happen that a powerful enough quantum computer is built earlier than expected. Some people in the Bitcoin community propose that they should increase the algorithm to SHA-384 as a solution, but that would be only “putting a band-aid on the problem”. The difficulty to attack it would enormously increase, but it still wouldn’t be (theoretically) “quantum resistant” as it would rely on the same mathematical problem of the integers factorization, and this change would also require a hard-fork, which is usually not a desirable experience.

That said, most cryptocurrencies are today, “practically” quantum-resistant and will probably continue to be for the next few years. Even though discussions on the topic can be traced back to the beginning of Bitcoin, quantum resistant cryptocurrencies are only showing up more recently. Some cryptocurrencies which already implemented real quantum resistance features, (which means they are fully protected against quantum attacks, better safe than sorry) include:

  • QRL – The Quantum Resistant Ledger
  • NEO
  • IOTA
  • Cardano has a milestone to implement quantum resistance to their ledger in the first semester of 2018

There are many other coins with quantum-resistant assets. As more people get aware of the possibility of quantum attacks (and more powerful quantum computers start getting built), their prices will probably tend to rise in accordance, so it may be important to take this into account when investing in long-term.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Paul van de Velde via Flickr

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

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The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

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Altcoins

Top 3 Coins to Buy Before They Go Big

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Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

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Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

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