What IBM quantum computers mean for crypto asset security

This article is brief:

• IBM is launching several quantum computing projects that could spark a wave of quantum algorithms and open up new opportunities.

• To date, none of the quantum achievements have been able to be used in enterprise applications, but with the launch of IBM, these may not be too far away.

• However, cryptocurrency custodians may need to step up their game if they want to withstand the level of attack that comes with quantum algorithms.

Crypto businesses with an eye for strong security may soon need to take note of the first real-world application of IBM’s quantum computer. The computing giant will launch 10 new projects that use algorithms used in supercomputers and are capable of cracking traditional security measures.

IBM will launch several projects that combine quantum computing and traditional supercomputing, which is believed to be the first practical application of a quantum computer. Unlike traditional machines that store information at 1s and 0s, quantum computers use transient subatomic elements called qubits to store data.

The Potential of Quantum Algorithms

IBM’s project reportedly marks the first time a company has been able to control qubits in order to use the data it holds for scientific computing. This breakthrough will facilitate the development of quantum algorithms. However, Jay Gambetta, vice president of quantum at IBM, says business applications still have some way to go.

“It’s going to take a while for us to move from scientific value to commercial value. But in my opinion, the difference between research and commercialization is getting smaller and smaller,” he said.

This technology is expected to solve problems that were previously unsolvable by traditional computers, such as the so-called traveling salesman problem. The challenge is to minimize the distance a salesman can travel on the local highway when visiting different parts of the same area.

Quantum computing vs. traditional computing. Source: CB Insights

In January, Chinese researchers claimed to have found a way to optimize Schnorr’s algorithm to decompose large prime numbers using a quantum computer. While their research was theoretically plausible, their findings were never experimentally proven.

Quantum Impact on Encryption Security **

IBM’s efforts could threaten the encryption algorithms used by the banking industry and the government. Japanese tech giant Fujitsu Siemens and Riken Research Institute have announced that they will launch a quantum computer in 2023. However, although the project has been used for R&D, there is no news of any commercial application yet.

Now, driven by IBM’s efforts, the development of quantum algorithms could threaten long-standing cybersecurity standards, such as the 256-bit asymmetric encryption standard. This could jeopardize crypto assets held by exchanges that use the standard to protect customer information.

This danger is amplified as banks show increasing interest in tokenizing real-world assets. Before assets can be exchanged, they must be held by a custodian with reasonable security measures in place.

If the custodian does not strengthen security, bad actors may link asset holders to bulk assets such as property or cars. This vulnerability could expose owners and receivers to real-world heists or ransomware attacks to regain access to assets. If the government is able to link all on-chain assets to individuals, it may also increase the opportunity for surveillance.

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