Strategies for Ensuring the Security of Cryptocurrency Systems in the Quantum Era

Cryptocurrency is one of the greatest inventions of this decade. It is soon on its way to becoming the future monetary system. The main reason for its popularity is its decentralisation and secure nature. Blockchain is the underlying technology that empowers cryptocurrency.? Blockchain uses cryptography (hashing and public-key algorithms) to provide enhanced security. Various seminars, bootcamps and workshops are being organised by public and private organisations to explore the uses of blockchain other than cryptocurrency. All discussions on cryptocurrency today are around its safety and security.

Quantum computing was pointed out as a threat to public-key cryptography a few years ago. Due to rapid developments in quantum computing, it has become a reality.? As cryptocurrency uses public-key cryptography, its security is also under question. Organisations all around the world are worried about their cryptocurrency. Researchers and cryptographers are busy developing post-quantum algorithms to prevent attacks from a quantum computer.

So what's the threat?

Cryptocurrency systems use public-key algorithms such as RSA, Diffie-Hellman Key Exchange, etc. The security of these algorithms is due to mathematical concepts of factoring and discrete logarithms. Classical computers (the computers we use today) find these mathematical problems hard to break because of their low computing power. Quantum computers can do calculations exponentially faster than classical computers. Hence, most currently used public-key algorithms are at risk of being broken.

Today, the government and private organisations are investing billions of dollars in the development of quantum technology. This underscores the urgency for everyone to understand the potential risks of quantum computers, especially in the context of cryptocurrency. It's not just a matter of curiosity, but a responsibility we all share.

How can cryptocurrency be kept safe?

Organisations like Google, IBM, D-Wave System, etc., are racing to build large-scale quantum computers. Most of them are in the early phases of development. According to the Financial Times, Google has claimed to achieve quantum supremacy by developing a 53-qubit quantum computer. Quantum supremacy is a term used to describe the point at which a quantum computer can perform a calculation that is practically impossible for a classical computer to solve in a reasonable amount of time. Building a quantum computer is still considered to be complicated by some experts and researchers. Therefore, cryptocurrency is safe for now, but that may only be the case for a while. Thus, every company using it should start taking steps towards making it secure.

Let's explore four different ways in which companies can build quantum-resistant cryptocurrency systems:

1. Post-Quantum Cryptography

Quantum-resistant algorithms, which have existed since the 1970s, are now gaining significant traction due to the advent of quantum computing.?The National Institute of Standards and Technology (NIST) and other organisations actively develop and promote these algorithms, providing hope for a secure future in the quantum era. There's a light at the end of the quantum tunnel, and it's getting brighter.

• Hash-based Cryptography?

This cryptography method is secure because it uses the hash function. Public keys are generated by hashing private keys. Lamport One-Time Signature is one such hash-based algorithm. Researchers have developed new hash-based algorithms, such as?Leighton-Micali Signatures (LMS) and eXtended Merkle Signature Scheme (XMSS). These algorithms are not vulnerable to quantum attacks and can be used instead of current public-key algorithms.

• Code-based Cryptography

Code-based cryptography uses error-correction codes. The sender introduces some noise (wrong data bits) while encrypting the data, which can be removed during decryption by the error-correcting code used in the algorithm, as explained by John in his article. According to?Teachbeacon's article, McEliece has been listed as an approved post-quantum algorithm in the OASIS KMIP (Key Management Interoperability Protocol) post-quantum cryptography profile. Niederreiter cryptosystem is another variation of the McEliece cryptosystem, as explained here. Organisations can use these algorithms to prevent quantum attacks as they provide high security.

• Lattice-based Cryptography?

Lattice cryptography provides security due to challenging lattice problems. IBM Research explains that this type of cryptography uses geometric structures called lattices to hide data. NTRU is an old lattice-based public-key encryption algorithm. IBM has been working on developing post-quantum algorithms based on lattices. The new 'Fully Homomorphic Encryption' cryptography concept is also based on lattices. Fully Homomorphic Encryption is a form of encryption that allows computation on encrypted data without decrypting it first, which could be a game-changer in quantum-resistant cryptography. No efficient quantum algorithms are known for solving these challenging lattice problems. Therefore, they are not susceptible to quantum attacks.?

2. Quantum Blockchain

In their review,?MIT mentioned that a quantum blockchain could be a solution to prevent quantum attacks. Quantum particle stores the information in a quantum blockchain. If this blockchain becomes a reality, storing our cryptocurrencies will be the safest. The theory of entanglement states that two quantum particles in entanglement share the same existence and are the basis of security in the quantum blockchain. If one particle is measured, it immediately influences the other, no matter how far apart. Therefore, if anyone interferes with one particle, the other particle gets affected. The fragility of entanglement between quantum particles leads to security. A quantum blockchain will be a perfect answer to quantum attacks if researchers can develop it. The future is bright, and a quantum blockchain could be the beacon of hope we need.

3. Modular and Agile Implementation

One of the significant challenges in cryptography applications today is implementing algorithms. However, the key to overcoming this challenge lies in our hands—the flexibility to change algorithms. By making our applications more flexible, we can proactively prepare for the quantum era and ensure a faster migration to quantum-resistant algorithms.

4. Access Control Mechanisms

In the future, every organisation will be a part of various permissioned cryptocurrency blockchains. Permissioned blockchains are blockchains in which participants require permission to join the blockchain network. To ensure the security of these blockchains, companies should implement access control mechanisms like firewalls and security groups. These mechanisms control who can access the blockchain and what actions they can perform, reducing the risk of fraud and attacks by malicious users.?Access Control will help tighten the security of the applications and act as an added layer of protection. An attacker will have to penetrate these mechanisms to attack the cryptocurrency systems. These extra layers of security will prevent an attacker from accessing blockchain applications and buy us more time to act in case of an attack.

Finally!!!

Threats from the quantum computer are real and should be considered while designing and developing new cryptocurrency applications. Organisations should aim to use more than one security mechanism for higher security. Companies that take extra measures to secure their applications in the quantum era will ultimately win.

Resources

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Please note that the views and opinions presented are mine and do not reflect those of my employer or any affiliated entity.