Coinbase Explores Post-Quantum Encryption For Blockchain

Quantum computers are expected to be built at a size that is commercially useful in a mere few years, from maybe just 2028 to the mid-2030s, depending on the estimate and the exact capacity targeted.

This would be great for solving extremely complex mathematical problems to solve questions about material sciences in semiconductors, aerospace, battery, or solve proteins 3d configuration, or discover new lifesaving pharmaceuticals.

But the same capacity could be used to break encryption methods on which the modern world is built. This is why, for example, all major US banks are being forced to speed up their adoption of lattice-based cryptography, a method that is believed to be quantum-proof.

In the same way, cryptocurrencies could be in danger if the encryption that makes cryptos so secure could suddenly be broken.

This is especially problematic as future quantum computers could break the encryption of data that are today collected, even if still unbreakable, but could be decoded later, a method called “Harvest Now, Decrypt Later” (HNDL).

In that context, the leading actors in blockchain and cryptocurrencies are moving fast as well to prepare for the eventual emergence of quantum computers.

One of them is Coinbase, which published its report “Quantum Computing & Blockchain” addressing these concerns and looking into the possible solution the blockchain community could and should adopt in time to avoid any real security issue.

“We have high confidence that a large-scale, fault-tolerant quantum computer (FTQC) will eventually be built. As such, blockchains and the wider cryptographic ecosystem must prepare for this eventuality.”

Coinbase’s Quantum Report Overview

In the overview of this report, Coinbase starts by reminding that the National Institute of Standards and Technology (NIST) recommends that post-quantum (PQ) migrations should be carried out by 2035. It also points out that this timeline for preparation, leaving only 9 years, might even be optimistic.

“We are not confident that cryptographically relevant quantum computers (CRQC) will not exist by 2035 or later, as recent research raises the possibility that the timeline may be shorter.”

The report is divided into 6 major segments plus an annex of “additional readings”, covering the topic extensively:

1. Quantum Computing Overview and the Current State of the Art.
2. Post-Quantum Cryptography (PQC).
3. Post-Quantum Cryptography and the Consensus Layer.
4. Post-Quantum Cryptography and the Execution Layer.
5. Post-Quantum Plans for Major Blockchains.
6. Post-Quantum Security Beyond Signing.

Quantum Computing Overview

This first part resumes what a quantum computer is, what it can do, and how the technology has progressed so far.

In short, quantum computers use superposition and other quantum effects to grow their computing power exponentially for each additional “qubit” (the quantum equivalent of normal computer bits), instead of linearly.

“ The power of quantum computers is directly related to the fact that, to describe a superposition with N qubits, one needs a list of 2^N parameters. When (say) N=1000, this is already more parameters than could be written down in the observable universe.”

As mentioned, such a computer would be ideal for simulations of the physical world and breaking encryption. It could also be used to train more efficiently AIs, a topic we uncovered previously in our article “Does Quantum Computing Have A First Real-World Use Case”.

The main limit in building a quantum computer is the hardware, which is incredibly hard to manufacture and to keep in a quantum state long enough that qubits can be trusted and perform any useful calculation.