Google’s new quantum computer, “Willow,” has become a hot topic in the virtual asset industry. Following Google’s announcement regarding the development of this new quantum computer, the prices of major cryptocurrencies, including Bitcoin, dropped by approximately 5-10%. Investors in cryptocurrencies are curious to know whether the advancing quantum computers will actually render the blockchain technology, which underpins virtual assets, obsolete.
As of 3 PM on the 14th, according to CoinMarketCap, a global virtual asset market site, Bitcoin was trading at $108,017, up 1.99% from the previous day. Ethereum rose by 5.06% to $3,953, and Ripple increased by 1.24% to $2.41. On the 10th, Bitcoin had declined sharply, falling to the level of $94,000, nearly 10% down from its all-time high of $103,900. Many other major altcoins also saw declines on the same day, with Ethereum dropping 7.6% and Ripple falling by 19.71%.
One reason cited for the decline in the virtual asset market is the advent of quantum computers. On December 9th, Google announced its new quantum chip “Willow,” drawing global attention. Google claimed that Willow solved a problem in just five minutes that would take existing supercomputers 10 septillion years (10 to the power of 24 years). This announcement led to a more than 5% jump in Alphabet’s stock price in the U.S. stock market.
Quantum computers have long been cited as a major threat and adversary in the virtual asset industry. Cryptocurrencies are based on blockchain technology, which disperses and shares information across the network of every participant rather than a central server. Since the data is distributed across numerous networks instantaneously, blockchain is praised for being resistant to tampering and hacking.
However, the key feature of quantum computers is their significantly faster computation speed. They have the potential to break blockchain’s encryption by leveraging quantum mechanics principles for data processing. Unlike traditional computers, which use bits that store information as 0s and 1s, quantum computers use quantum bits (qubits) that can represent and store information in both 0 and 1 states simultaneously.
This allows quantum computers to consider and compute many possibilities at once, exponentially increasing computational power. This capability is particularly significant in fields like cryptography that involve examining sequential results. The performance of a quantum computer is determined by the number of qubits used. Willow is in the second stage of Google’s quantum computer roadmap, utilizing 105 qubits, with more qubits promising better performance.
Despite the concerns, experts do not agree that quantum computers will render blockchain obsolete. Fully developed quantum computers capable of decrypting blockchain aren’t available yet, and it will take several years for such technologies to become commercially viable. For example, the underlying technology for generative artificial intelligence, such as ChatGPT, was completed much earlier but took nearly five years to commercialize.
Significantly, a highly advanced quantum computer, employing at least one million qubits, would be required to jeopardize blockchain encryption truly. Google’s Willow currently uses only 105 qubits, and according to Google’s development roadmap, it won’t reach the sixth and final stage, employing one million qubits, for some time.
The situation is similar for other companies developing quantum computers. IBM’s quantum computer “Condor” uses 1,021 qubits, whereas Microsoft’s latest quantum computer, announced last month, utilizes only 24 qubits. Additionally, the issue of quantum errors, inherent when using quantum computers, has not been entirely resolved, indicating a long road ahead toward developing one-million-qubit quantum computers.
The blockchain sector has also been preparing for potential threats from quantum computers for some time. The U.S. cryptography community has been researching “quantum-resistant cryptography,” and new cryptographic standards are already being developed to counter quantum computer threats. Kim Seung-joo, professor at Korea University’s Graduate School of Information Security, explained that just as Ethereum switched its consensus algorithm from Proof of Work (PoW) to Proof of Stake (PoS), the blockchain ecosystem is constantly preparing to defend against quantum technology and is shifting to systems that can withstand such challenges.
Hyunwoo Lee, co-CEO of Xangle, stated, “While it may seem like a threat to the mainnet security system, it will take time for quantum computers to be practical enough to break current crypto encryption. In the meantime, hard forks integrating quantum-resistant encryption can mitigate the risks, limiting the impact on the industry.”
Kim Gap-rae, senior research fellow at the Korea Capital Market Institute, added, “Saying quantum computers will neutralize blockchains at this point is like claiming that Terminators will appear in the future. As quantum computers evolve, the existing industry will prepare to keep pace with emerging technologies. Furthermore, as cryptocurrencies, including Bitcoin, get integrated into the regulatory framework, there will be increased attention to security systems.”