Bitcoin transactions are basically math puzzles saved in a public network called blockchain. These puzzles used to defend bitcoin are so complex that the most powerful computer available today aren’t effective enough to crack them.
But with the advancing of new technologies like quantum computer systems might be able to crack these puzzles in coming 10 years.
How Does the Bitcoin Private Keys Encryption Work?
Traditional currencies depend upon trusted intermediaries like banks to confirm and store all financial transactions. The cryptocurrency financial system as a new alternative is based on the Blockchain which is a public ledger which is maintained by the miners who run powerful hardware to verify and record these transactions.
Meanwhile, banks are doing the job to verify and store transactions, the blockchain technology does that autonomously in a decentralized way.
For example: Let imagine a recipient whose name is Peter. First of all, he creates a unique extremely difficult puzzle that nobody can resolve, but with a hint (private key) it is easily resolved. He must not give anybody this hint. Then another hint (public key) which can verify that the puzzle solution is correct. He can send this hint to anybody who wants to send him bitcoins.
If Allen wants to send Peter some bitcoins he has to submit to the blockchain network a transaction which is composed of 2 components. The first is Peter’s puzzle and the second is a solution to a puzzle which unlocks funds received by him in a previous transaction. Also, Allen will reveal his public key in order to verify that the solution is correct. Then this solution is verified by the blockchain network participants (Bitcoin miners) which verify that bitcoins are owned by Allen so he can now spend them and accept the transaction that Allen submitted to sent Peter bitcoins. Now Peter can spend the bitcoins received by Allen.
In this manner, the transactions ledger of bitcoin (blockchain) is completely public and transparent but in the same time identities of participants in transactions is anonymous.
Can Anybody Access Bitcoin Without Private Keys?
The fact is that anybody who is able to resolve the puzzle can access the bitcoins but the recipient is given a hint which makes easy for him to resolve the puzzle. Without this hint and with the technology we have today it is impossible to resolve the puzzle.
Practically this puzzle is an electronically signed transaction based on a complicated mathematic algorithm called elliptic curves. The way it works is that it is extremely difficult or impossible for a computer to create a signature unless he knows the private key and it can easily be verified using a public key.
However, while these signatures certainly seem not possible to resolve for actual computer systems, quantum computers might probably be able to solve them. This is feasible because quantum computer systems aren’t limited to processing digital information, but alternatively, carry out calculations immediately using the quantum mechanical interactions that govern physics at particles scale.
The IBM Q is one of the world’s most advanced quantum computers. Image Credit: Graham Carlow
Quantum computers might be able to crack the elliptic curve algorithm using a variant of Shor’s algorithm. This algorithm is able to calculate a private key form a public key.
However when a bitcoin address has not sent any transaction the public key of that address is still unknown. When the address is used to send a transaction the public key is made public and the quantum computer will have 10 minutes to find the private key. And then to alter the transaction and steal the funds. 10 minutes is a very short time but actually, there are about 30% of the total bitcoin market cap public keys revealed. Because of this, it is better to store your bitcoin on an address that you have not sent any transactions from it.
It is difficult to predict whether quantum computers will be able to carry such difficult calculations but at least for the next 10 years, our bitcoins will be safe.
Solutions to Prevent Quantum Computers Hack
Researchers from Victoria University of Wellington in New Zealand posted a paper in which they advise making blockchain behave like a Time Machine to keep it secure.
How might that be possible? Through a phenomenon called entanglement, that Einstein described as ‘spooky action at a distance’, due to the fact that during the process two or more particles instantly affect each other. Records stored as photons in a block will have an effect on other photons of that block in the past, and create a quantum blockchain that might be not possible to hack.
“In this scenario, a hacker cannot tamper with any photon encoding records of the past, since those photons no longer exist in the current time — they already got absorbed,” explained Charles Q. Choi in Spectrum. “At best, a hacker can attempt to tamper with the most recent photon, the most current block, and successfully doing so would invalidate that block, informing others it got hacked.”
So don’t worry, researcher are trying to find ways to prevent quantum computers to hack the blockchain. We hope that after 10 years when a considerable percentage of the world GDP will be on the blockchain will also be technologies that will secure these blockchains form quantum computer hacks.