At SelfWallet, we believe that while the threat of quantum computing to cryptocurrencies is not yet imminent, the discussion around solutions must begin now. In our view, Microsoft's new quantum chip could significantly shorten the timeline needed to make Bitcoin quantum-resistant.
Microsoft unveiled its new quantum chip, Majorana 1, on February 19, joining companies like Google, which introduced its Willow chip in December. In our analytical report, we noted that while a quantum computing breakthrough threatening cryptocurrencies is still far off, Microsoft's new chip could accelerate this timeline.
"The Majorana 1 chip is far from the required level now but could reach the 1 million qubit mark by 2027–2029. A quantum computer of this scale, running for several days or weeks, could potentially crack Bitcoin addresses by attacking encryption algorithms," our report states.
At SelfWallet, we emphasize that this breakthrough shortens the timeline for Bitcoin to achieve quantum resistance. "Even if this happens a decade from now, it's crucial to start addressing vulnerabilities today," we stated.
Criticism: Is the Quantum Threat Overblown?
Despite concerns, many experts believe the threat of quantum computing to cryptocurrencies is exaggerated. Critics argue that quantum computers capable of breaking cryptography are more likely to target traditional financial institutions, such as banks, rather than cryptocurrencies. According to Statista, in 2023, the assets of all global banks exceeded $188 trillion, while the cryptocurrency market capitalization is just $3.2 trillion (per CoinMarketCap).
Additionally, some experts, like renowned cryptographer Adam Back, believe the quantum threat won't become relevant for several decades. He expects that by then, compact and reliable quantum-resistant algorithms will be developed and integrated into the Bitcoin network.
Bitcoin advocate Adrian Morris has also expressed skepticism, stating that quantum computing remains a "barely viable technology" with significant challenges, such as thermodynamics, memory, and computational stability.
Solutions Are Already in Development
The Bitcoin community is already working on solutions to protect the network from quantum threats. One proposal is BIP-360, which suggests transitioning Bitcoin to a quantum-resistant structure by replacing vulnerable signature methods. According to Preston Pysh, co-founder of The Investor's Podcast Network, this update could be implemented via a soft fork.
Our Perspective: What's Missing in the Discussion?
While many experts believe the quantum threat to Bitcoin and other cryptocurrencies is distant, we at SelfWallet believe it's essential to consider the possibility of exponential growth in quantum computing. History shows that technological breakthroughs often happen faster than expected. For example, the development of artificial intelligence or mobile technology once seemed distant but then accelerated rapidly.
Quantum computing could follow a similar trajectory. If major corporations like Microsoft, Google, or IBM make significant progress in building powerful quantum computers, it could radically alter the cybersecurity landscape. Bitcoin and other cryptocurrencies relying on current cryptographic algorithms could become vulnerable.
Moreover, it's important to recognize that quantum technologies can be used not only for attacks but also for defense. For instance, quantum cryptography could offer new encryption methods that are virtually unbreakable. However, transitioning to such technologies will require significant effort and time.
Conclusion
Microsoft's new Majorana 1 chip is a significant step in the development of quantum computing, which could accelerate the need for Bitcoin to achieve quantum resistance. While the threat may seem distant, it cannot be ignored. The Bitcoin community has already begun working on solutions like BIP-360, but it's crucial to continue monitoring advancements in quantum technology and prepare for rapid changes. After all, in the world of technology, tomorrow's breakthroughs can arrive much sooner than we expect.
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