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Quantum Computing Threat to Blockchain Security: Expert

Published

6 months ago

23 July, 2024

Quantum computing’s threat to blockchain security: expert

Quantum computing, once a theoretical concept, is now rapidly advancing and reshaping our understanding of data processing.

Unlike traditional computers that use bits, quantum machines use qubits, which can exist in multiple states at once. This makes them significantly more efficient than traditional computing systems when tackling complex problems.

For the blockchain sector, the rise of quantum technology poses a significant threat to cryptographic systems that underpin the security of the blockchain. Current cryptographic methods, such as Rivest-Shamir-Adleman (RSA) and Elliptic-Curve Cryptography (ECC), are widely used in networks such as Bitcoin AND Ethereal.

Their main strength lies in their complexity, which traditional systems cannot decipher. Yet quantum machines they claim they can break these systemspotentially making these networks vulnerable to attacks once thought unlikely.

With the entire industry including cryptocurrencies, non-fungible tokens (NFTs) and decentralized applications (DApps) at risk, quantum-resistant cryptographic measures are urgently needed. While slowly moving towards the post-quantum erathe blockchain industry must innovate and adapt.

To shed some light on these issues, Lisa Loud, executive director of the Secret Network Foundation and chair of the IEEE SA Quantum Algorithms Workgroup, recently spoke with crypto.news, discussing the implications of quantum computing for blockchain security and how these threats are being addressed.

What are quantum computer attacks and why are they considered a threat to blockchain and cryptocurrencies in general?

Quantum computing attacks are somewhat similar to today’s brute force attacks in that their ability to try different combinations has improved dramatically over classical computers. If you have a three-digit combination lock, there are about a thousand combinations, and a patient thief could try all of them and unlock your suitcase or steal your bike. When you have a 12-character online password, the permutations increase to 7,212 different possible passwords, which a human couldn’t handle, but a classical computer could try them all in sequence and eventually find the right combination. If you have a wallet with an encrypted private key, the number of possible options increases to 2,256. That’s too many for classical computers to handle, but a quantum computer could.

This is a simplification of reality, but it conveys the idea of why a quantum computer attack is a threat to blockchains and cryptocurrencies. Many proposals to address this threat are largely theoretical or rely on the solution of creating new blockchains with built-in quantum resistance, but this is not practical when there are millions of dollars locked in existing blockchains. Instead, some researchers are focusing on end-to-end frameworks that can be applied to existing blockchains. 3 Another less obvious but potential threat is that quantum computers may be able to mine blocks much faster than classical computers, potentially centralizing mining power.

Can the blockchain industry address these issues before quantum computing technology is fully ready?

These are the problems we see today, but who knows what will emerge when quantum computing becomes a reality. We know that blockchain cryptography is evolving specifically to counter these threats, but the bigger question is: what haven’t we thought of? What threats exist that aren’t obvious today but will only emerge when we have these two technologies in the same space? We don’t know the answer, but we can be sure of one thing: there will be new and unexpected problems to solve when blockchains meet quantum computing.

In theory, quantum computers can break RSA and Elliptic Curve cryptographic algorithms; how imminent is this threat to current blockchain platforms like Bitcoin and Ethereum?

The field of quantum cryptography, while promising in its potential to crack existing ciphers, is far from ready for practical implementation. At the same time, on-chain cryptography continues to evolve, and today’s cryptographers are aware of the quantum threat on the horizon. As a result of this set of conditions, the development of new on-chain cryptography methods considers quantum-proof methods necessary. Today, there is no imminent threat to Bitcoin or Ethereum simply because quantum hardware remains largely a theoretical construct.

Do you think cryptographic standards can help protect blockchain networks from quantum threats? Can they be integrated into existing systems like Bitcoin and Ethereum?

There are several cryptocurrency algorithms designed to handle quantum resistance, such as SPHINCS+. While I chair a standards committee at IEEE to define best practices in writing quantum algorithms, there are other working groups at IEEE and many other standards organizations working on best practices for developing quantum-resistant software. Blockchains will be able to switch cryptographic algorithms sooner than many other areas of the industry. In particular, chains that have a governance structure in place will have an easier time making the switch. Chains like Bitcoin or Ethereum may take longer.

What are the challenges decentralized blockchains face as they migrate to post-quantum cryptography? Is the pseudonymity inherent in public blockchains a problem?

Blockchain user pseudonymity is not so much the issue here as the distribution of nodes on each blockchain, of which Bitcoin is the most extreme. Any mitigation strategy to make Bitcoin quantum-proof will almost certainly require a change to the wallet address format. Bitcoin’s proof-of-work consensus mechanism is less immediately threatened, but its address system (based on ECDSA – Elliptic Curve Digital Signature Algorithm) is vulnerable and will need to change. This has historically been a messy process that has created chaos and some losses. Ethereum faces similar challenges with its address structure and widespread distribution, but has the advantage in that it is more easily upgradeable than Bitcoin due to its smart contract capabilities.

So yes, there will be challenges in migrating any blockchain to post-quantum cryptography, and the wider the chain distribution, the more difficult it will be to overcome these challenges. Wallets that are slower to migrate may face greater vulnerability to quantum attacks. Ensuring that post-quantum systems can interoperate with legacy systems during the transition period will require maintaining dual systems for an extended period, and the larger key structure may impact blockchain performance.

So are there blockchain networks equipped for this transition?

Some more recently built blockchains have an easier path to mitigation. For example, Cosmos is configured to be easier to migrate. All chains built on the Cosmos SDK may want to choose a common quantum-proof algorithm to simplify wallet integration. Some chains are specifically designed to encrypt the data they carry in transactions, such as Secret Network and Fhenix. Secret uses secure hardware enclaves (such as Intel SGX’s TEE) to protect encrypted data on-chain. These ciphers are resistant to quantum attacks because the secure enclaves can change their encryption schemes on the fly, which can have some performance implications. Fhenix uses mathematics, or fully homomorphic encryption, to protect data in a complex encryption scheme that is quantum-resistant. The technology for FHE is not ready for deployment today, but its timeline is much shorter than that of quantum computers. This allows the future of blockchains to be realized natively, with quantum resistance built in, long before quantum computing is ready to attack blockchains.

How long does the blockchain industry have before the threat of quantum computing becomes inevitable?

Within the next 10-20 years, the [blockchain] The industry should be fully prepared. Many experts believe that quantum computers capable of breaking current cryptosystems could emerge in this timeframe. Beyond that, if left unaddressed, quantum computers will likely be able to break most current cryptosystems used in blockchains. The day when quantum computing threatens the encryption of Bitcoin and Ethereum is in the uncertain future. As for when a computer with sufficient hardware and software to handle complex problems will be ready, based on modeling the number of qubits developed since 2014 and projecting that timeline forward1, early estimates are 2035, with some saying much later, as late as the year 2050.

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News

Ether Drops Further After ETF Launch

Published

6 months ago

23 July, 2024

Blocksight Staff

Bitcoin Surpasses $66,000 Thanks to Strong ETF Flows

Key points

Spot ether ETFs began trading in the U.S. today, with the funds initially having more than $10 billion in collective assets under management.
Analysts expect the launch of spot ether ETFs to have a net negative impact on the underlying price of ether in the near term, due to expected outflows from the pre-existing Grayscale Ethereum Trust.
Spot Bitcoin ETFs continue to see strong inflows, with BlackRock’s IBIT alone seeing more than $500 million in inflows on Monday.
Franklin Templeton, a spot ETF issuer on bitcoin and ether, has invested in a project that intends to bring Ethereum technology to Bitcoin.

Nine-point ether exchange-traded funds (ETFs)) started trading on the stock market on Tuesday, but all the optimism ahead of their approval did not translate into gains for the cryptocurrency markets.

Ether (ETH), the native cryptocurrency of the Ethereum blockchain, dropped less than 1% around the $3,400 level as of 1:30 PM ET, while Bitcoin (BTC) fell more than 2% to around $66,000.

Ether ETFs’ Debut Isn’t as Flashy as Bitcoin ETFs’

Spot ether ETFs began trading at just over $10 billion assets under management (AUM)), according to Bloomberg Intelligence analyst James Seyffart, most of that money is in the current Grayscale Ethereum Trust (ETHE) which has now been converted into an ETF.

“In the long term, Grayscale will simultaneously have the highest and lowest fees in the market. The asset manager’s decision to keep its ETHE fee at 2.5% could lead to outflows from the fund,” Kaiko Research said in a note on Monday.

Outflows from ETHE, if they occur, would be similar to those faced by Grayscale’s Bitcoin Trust (GBTC) after spot bitcoin ETFs began trading in January of this year, most likely due to high fees for the two original funds. Grayscale’s existing fund charges 2.5% fees, while a new “mini” ether ETF will charge 0.15% and commissions for other ETFs are set at 0.25% or less.

Such outflows could impact the price of ether and market sentiment.

“There could be a pullback shortly after the launch of Ethereum spot ETFs, i.e. outflows from Grayscale Ether Trust could dampen market sentiment in the short term,” Jupiter Zheng, a partner at Hashkey Capital’s liquid fund, told The Block.

But Grayscale remains optimistic.

“Compared to the splashy debut of spot bitcoin ETPs in January, the launch of ethereum ETPs has been relatively muted,” said Zach Pandl, Grayscale’s head of research, adding that investors may be “undervaluing” ether ETFs that are “coming to the U.S. market in tandem with a shift in U.S. cryptocurrency policy and the adoption of tokenization by major financial institutions.”

Bitcoin ETF Inflows Continue to Rise

As for bitcoin, there is clearly no lack of demand for spot ETFs, such as BlackRock’s iShares Bitcoin Trust (IBITS) recorded its sixth-largest day of inflows in its short history on Monday, at $526.7 million, according to data from Farside Investors. Daily inflows for the overall spot bitcoin ETF market also hit their highest level since June 5.

In particular, asset manager Franklin Templeton, which has issued both bitcoin and ether ETFs, appears to have decided to cover its back when it comes to Ethereum by investing in Bitlayer, a way to implement Ethereum technology on a second-layer Bitcoin network, according to CoinDesk.

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Spot Ether ETFs Start Trading Today: Here’s What You Need to Know

Published

6 months ago

23 July, 2024

Blocksight Staff

Spot Ether ETFs Start Trading Today: Here's What You Need to Know

Key points

Spot ether ETFs will begin trading on U.S. exchanges on Tuesday. Nine ETFs will trade on Cboe BZX, Nasdaq and NYSE Arca.
Ether ETFs offer investors exposure to the price of their underlying assets.
Commissions on these new ETFs generally range from 0.15% to 0.25%.
These ETFs do not provide exposure to Ethereum staking.

The U.S. Securities and Exchange Commission (SEC) has officially approved nine ether spots (ETH)exchange-traded funds (ETFs) for trading on U.S. exchanges. Trading for these new cryptocurrency investment vehicles begins today. Here’s everything you need to know.

What new ether ETFs are starting to trade today?

Spot ether ETFs starting trading today can be found at Quotation, NYSE Arkand Cboe BZX. Here’s a breakdown of each ETF you can find on these three exchanges, along with the fund tickers:

Cboe BZX will list the Invesco Galaxy Ethereum ETF (QETH), the 21Shares Core Ethereum ETF (CETH), the Fidelity Ethereum Fund (FETH), the Franklin Ethereum ETF (EZET) and the VanEck Ethereum ETF (ETHV).

Nasdaq will have the iShares Ethereum Trust ETF (ETHA) created by BlackRock, which also operates the largest spot bitcoin ETF under the ticker IBIT.

NYSE Arca will list the Bitwise Ethereum ETF (ETHW) and the Grayscale Ethereum Trust (ETHE). The Grayscale Ethereum Mini Trust (ETH), which will begin trading on the same exchange.

How does an ether ETF work?

Spot ether ETFs are intended to offer exposure to the price of ether held by the funds. Ether is the underlying cryptocurrency of the Ethereal network, the second largest crypto network by market capitalization.

ETF buyers are buying shares of funds that hold ether on behalf of their shareholders. Different spot ether ETFs use different data sources when it comes to setting the price of ether. Grayscale Ethereum Trust, for example, uses the CoinDesk Ether Price Index.

None of the ETFs launching today include pointed etherwhich represents a potential opportunity cost associated with choosing an ETF over other options such as self-custody or a traditional cryptocurrency exchange.

Ether staking currently has an annual return of 3.32%, according to the Compass Staking Yield Reference Index Ethereum. However, it is possible that the SEC will eventually approve Ether staking held by ETFs.

How can I trade Ether ETFs?

ETFs can simplify the trading process for investors. In the case of cryptocurrencies, instead of taking full custody of the ether and taking care of your own private keysSpot ether ETFs allow investors to purchase the cryptocurrency underlying the Ethereum network through traditional brokerage accounts.

Today, not all brokers may offer their clients spot ETFs on cryptocurrencies.

What are the fees for ether ETFs?

The fees associated with each individual spot ether ETF were previously revealed In the S-1 OR S-3 (depending on the specific ETF) deposit associated with the offerings. These fees are 0.25% or less for all but one.

The Grayscale Ethereum Trust, which converts to an ETF, has a fee of 2.5%. The Grayscale Mini Ethereum Trust has the lowest fee at 0.15%. These fees are charged on an annual basis for the provider’s management of the fund and are in line with what was previously seen with spot bitcoin ETFs.

Brokers may also charge their own fees for cryptocurrency trading.

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News

Kamala Harris Odds Surge Amid $81M Fundraise. What Does It Mean for Bitcoin and Cryptocurrencies?

Published

6 months ago

23 July, 2024

Blocksight Staff

Kamala Harris Odds Surge Amid $81M Fundraise. What Does It Mean for Bitcoin and Cryptocurrencies?

Market odds and memecoins related to US Vice President Kamala Harris have soared as the latest round of donations tied to the Democratic campaign raised $81 million in 24 hours, bolstering sentiment among some traders.

The odds of Harris being declared the Democratic nominee have risen further to 90% on cryptocurrency betting app Polymarket, up from 80% on Monday and setting a new high.

Previously, in early July, bettors were only betting on 8%, but that changed on Saturday when incumbent President Joe Biden announced he would no longer run in the November election. Biden then approved Harris as a candidate.

Polymarket traders placed $28.6 million in bets in favor of Harris, the data showsThe second favorite is Michelle Obama.

Somewhere else, Memecoin KAMA based on Solanaa political meme token modeled after Harris, has jumped 62% to set a new all-time high of 2 cents at a market cap of $27 million. The token is up a whopping 4,000% from its June 18 low of $0.00061, buoyed primarily by the possibility of Harris becoming president.

As such, Harris has yet to publicly comment on cryptocurrencies or her strategy for the growing market. On the other hand, Republican candidate Donald Trump has expressed support for the cryptocurrency market and is expected to appear at the Bitcoin 2024 conference on Saturday.

However, some expect Harris or the Democratic Party to mention the sector in the coming weeks, which could impact price action.

“While he has not yet received the official nomination, there is consensus that last night’s development is in line with current Democratic strategy,” cryptocurrency trading firm Wintermute said in a Monday note emailed to CoinDesk. “Keep an eye on Democrats’ comments on this issue in the coming days.

“The prevailing assumption is that Harris will win the nomination and any deviation from this expectation could cause market volatility,” the firm added.

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Top 30x Cryptocurrency and Coin Presales Today: Artemis Coin at #1, Others Are: BlockDAG, 99Bitcoin, eTukTuk, and WienerAI

Published

6 months ago

23 July, 2024

Blocksight Staff

Top 30x Cryptocurrency and Coin Presales Today: Artemis Coin at #1, Others Are: BlockDAG, 99Bitcoin, eTukTuk, and WienerAI

The cryptocurrency market has seen a lot of growth and imagination lately, with new ventures popping up regularly. A critical pattern in this space is the rise of crypto pre-sales, which give backers the opportunity to get involved with promising projects early on. Artemis is a standout option for crypto investors looking to expand their portfolios amid the many pre-sales currently underway.

Cryptocurrency presales, commonly referred to as initial coin offerings (ICOs), allow blockchain ventures to raise capital by offering their local tokens to early backers before they become available on open exchanges. Investors can take advantage of these presales by purchasing tokens at a lower price. If the project is successful and the token’s value increases, investors stand to receive significant returns.

>>> Explore the best cryptocurrency pre-sales to buy now <<

The Ultimate List of the Top 5 Cryptocurrency Pre-Sales to Invest In

Artemis: The aim of Artemis (ARTMS) will become the cryptocurrency equivalent of eBay or Amazon. The upcoming Phase 4 will see the launch of the Artemis Framework, which will serve as a stage for digital money exchanges where buyers, sellers, specialized organizations and those seeking administration can participate in coherent exchanges.
DAG Block: uses Directed Acyclic Graph technology to increase blockchain scalability.
99bitcoin: operates as a crypto learning platform
WienerAI uses AI-powered trading bots for precise market analysis.
eTukTuk focuses on environmentally sustainable transportation options, such as electric vehicle charging infrastructure.

We have determined that Artemis is the best new cryptocurrency presale for investment after conducting extensive research. It presents itself as the unrivaled cryptocurrency presale choice currently open.

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Top 5 Crypto Pre-Sales and Best Cryptocurrencies for Investment Today

Artemis (ARTMS) is attempting to establish itself as the cryptocurrency version of eBay or Amazon. The Artemis Crypto System, which will act as a platform for cryptocurrency transactions, will be launched in Phase 4. Buyers, sellers, service providers, and requesters will all benefit from seamless trading with this system. Customers will be able to purchase things, such as mobile phones using digital money, as well as sell products such as involved bicycles and get paid in cryptocurrency. Additionally, crypto money can be used to pay for administrations such as clinical consultations, legitimate care, and freelance work. Artemis Coin will act as the main currency of the ecosystem, with Bitcoin and other well-known cryptocurrencies from various blockchain networks backing it.

Artemis Coin has increased in price from 0.00055 to 0.00101 from 0.00094. Artemis may be attractive to individuals looking to recoup losses in Bitcoin, as predicted by cryptocurrency analysts. At this point, it seems to present an interesting presale opportunity.

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The world of digital currency pre-sales is an exciting and exciting opportunity that could open the door to game-changing blockchain projects. Projects in this article, like Artemis Coin, offer the opportunity to shape the future of various industries and the potential for significant returns as the industry develops.

However, it is imperative to approach these investments with caution, thorough research, portfolio diversification, and awareness of the risks. You can explore the digital currency pre-sale scene with greater certainty and increase your chances of identifying and profiting from the most promising venture opportunities by following the advice and methods in this article.

>>> Join the best cryptocurrency pre-sale to invest in now <<

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