Key Points

1. quantum computing can solve optimization problems better

References

Key Concepts

Quantum Computing Updates

https://www.eetimes.com/document.asp?doc_id=1335027

Quantum Security and Blockchain - 2024 - Daniel Szego

https://www.youtube.com/watch?v=WRvkKTPkrQs

Summary of "Quantum Threats and Blockchain Systems - Mortgage Industry Subgroup Update"

1. Meeting Context and Introductions:

   • The meeting was conducted under the Linux Foundation's Decentralized Trust Financial Markets Mortgage Subgroup.
   • Key emphasis on adhering to antitrust policy and code of conduct, fostering open, inclusive discussions.
   • Highlighted new members, such as Hedera Hashgraph and others, and provided resources like the subgroup's Wiki.

2. Blockchain in the Mortgage Industry:

   • Discussed how blockchain replaces centralized data resources, such as land records, enabling global access and property tokenization.
   • Benefits include streamlined property ownership transfers, peer-to-peer exchanges, and integration with AI for automating tasks like property appraisals and portfolio optimization.

3. AI in Mortgage Applications:

   • Explored AI's potential in analyzing data, predicting market trends, and optimizing pricing strategies.
   • Cited examples from the 2024 Mortgage Cadence Ascent conference, emphasizing AI's evolving role in the industry.

4. Emerging Quantum Threats:

   • Presented by Daniel Zhu, focusing on quantum computing's implications for blockchain and IT systems.
   • Quantum computers could exploit weaknesses in cryptographic systems like RSA encryption and blockchain algorithms.

5. Quantum Algorithms and Cryptographic Risks:

   • Key algorithms such as Shor's (for factoring large numbers) and Grover's (for faster search) threaten classical encryption systems.
   • Highlighted risks like "store now, decrypt later" attacks, where sensitive data is stored until quantum capabilities evolve.

6. Blockchain-Specific Quantum Risks:

   • Addressed vulnerabilities in mission-critical blockchain use cases, such as identity verification and financial systems.
   • Explored mitigation strategies, like increasing cryptographic key sizes and adopting post-quantum cryptography.

7. Quantum Readiness and Mitigation:

   • Discussed preparedness for quantum threats, including the development of quantum-resistant cryptographic standards (e.g., from NIST).
   • Mentioned the importance of regular risk evaluations and adopting hybrid cryptographic approaches.

8. Practical Applications and Future Outlook:

   • Examples included quantum physics-based random number generation and key exchange systems.
   • Stressed the importance of continual advancements in cryptography and blockchain resilience.

9. Implications for Bitcoin and Other Cryptocurrencies:

   • Speculated on the potential impact of quantum attacks on Bitcoin, with signs like the movement of Nakamoto addresses indicating vulnerability.

10. Conclusion and Q&A:

    • Discussed the rapid advancements in quantum computing and parallels with AI's disruptive trajectory.
    • Concluded with expert opinions and audience questions about the practical timeline for quantum threats and strategies for mitigation.

Quantum Computing: The Next Frontier in Cybersecurity

Quantum computing, once considered a distant theoretical concept, is now on the verge of transforming industries, particularly cybersecurity. With tech giants like Microsoft, Google, IBM, and startups such as IonQ and Rigetti making strides in quantum research, we’re beginning to see how quantum could reshape data security and encryption as we know it.

The Role of Quantum in Cybersecurity

• Breaking Encryption: Traditional encryption methods, like RSA and ECC, rely on the complexity of factoring large numbers, a task that would take classical computers centuries. Quantum computers, however, could break these encryptions within seconds using algorithms like Shor’s algorithm.
• Post-Quantum Cryptography (PQC): To counter the threat, researchers are developing quantum-resistant algorithms. In 2022, the U.S. National Institute of Standards and Technology (NIST) selected four encryption algorithms as potential standards for PQC.

Use Cases in Cybersecurity:

• Secure Communications: Companies like Quantum Xchange are using quantum key distribution (QKD) to secure data transmission against eavesdropping.
• Financial Data Protection: JP Morgan Chase is exploring quantum for secure transactions, anticipating that quantum-encrypted channels will soon be essential for financial systems.

Statistics:

• By 2030, up to 25% of all data globally may require quantum-safe encryption, driven by the quantum threat to current encryption standards. (Source: Gartner)

A Quantum Leap: A Looming Threat to Our Digital Security

growing concerns about the potential impact of quantum computing on our digital world. A prime example is the recent news of Chinese researchers breaking RSA encryption (PDF) using a quantum computer. While experts have cautioned against overstating the significance of this achievement (PDF), it serves as a stark reminder of the looming threat.

Even if a quantum computer isn't available today, it could be built before the organization can fully migrate to quantum-resistant encryption.

IBM Announces 50 X Faster Quantum Computer for Quantum Advantage

US CBP focuses on Post-Quantum Cryptography

CBP blocks approximately 100 million network cyber attempts each workday. These attacks are increasingly sophisticated, targeting government systems and critical infrastructure with the intent to intimidate targets, steal sensitive information, or disrupt operations. Given the criticality of our IT systems and the immense value of the data stored within them, this threat landscape requires constant vigilance and innovation.

Right now, encryption keeps personal and system data safe by transforming information or data into a code, making it impossible for others to read without the right “key.” Soon, quantum computers will be able to read coded/encrypted data easily without using a key. This will leave things like bank accounts, health records, private messages, and government data at risk.

The federal government first recognized the importance of post-quantum cryptography (PQC) with the Office of Management and Budget (OMB) Memorandum M-23-02 and the Quantum Computing Cybersecurity Preparedness Act. PQC addresses the “harvest now, decrypt later” threat

Implementing Quantum Communication

We undertook an ambitious project to develop a novel quantum teleportation protocol. This endeavor addressed one of the most pressing challenges in quantum networking: establishing reliable, secure communication between quantum nodes over significant distances.

Our first breakthrough came in successfully establishing a quantum channel between two networked nodes, as demonstrated in our network simulation interface. This visualization shows the real-time quantum state transmission between two communication endpoints, offering a clear representation of our protocol in action.

At the heart of our protocol lies quantum entanglement, a phenomenon we carefully studied and implemented. Using MATLAB, we developed sophisticated models to simulate and visualize the entanglement process, providing crucial insights into the behavior of quantum states during transmission.

 Using IBM's Qiskit, we simulated quantum circuits and gates essential for our teleportation protocol, allowing us to verify the quantum operations at a fundamental level. In parallel, we utilized PennyLane to explore the quantum-classical interfaces crucial for practical implementation. This multi-platform approach provided valuable insights into the protocol's behavior across different quantum computing architectures.

The protocol implementation focuses heavily on maintaining quantum coherence during transmission. We developed sophisticated error detection and correction mechanisms, allowing us to preserve quantum information integrity even under challenging conditions.

daniel-szego_exploring-privacy-and-quantum-security

quantum-Exploring Privacy and Quantum Security for Digital Currencies_ Current Solutions and Future Challenges.pdf. link

quantum-Exploring Privacy and Quantum Security for Digital Currencies_ Current Solutions and Future Challenges.pdf. file

4. Quantum and Post-Quantum Cryptography

Efforts to develop quantum-resistant cryptography focus on post-quantum and quantum cryptographic protocols. Post-quantum cryptography aims to create protocols for classical computers that withstand quantum attacks. Quantum cryptography, though still experimental, offers promising techniques, including Quantum Random Number Generation (QRNG) and Quantum Key Distribution (QKD). The U.S. National Institute of Standards and Technology (NIST) has initiated a standardization challenge, with lattice-based and hash-based algorithms among the first post-quantum cryptographic standards.

5. Framework for Quantum Security in Blockchain-Based Systems

Designing a secure digital currency framework involves ongoing assessment and adjustment. Below is a proposed quantum risk evaluation process to identify and manage risks.

Quantum Risk Evaluation Framework

1. Threat Model: Identify potential attack methods and cryptographic vulnerabilities in the system.
2. Impact Analysis: Assess the potential impact of a quantum-based attack, considering financial and data integrity consequences.
3. Quantum Readiness: Estimate how soon quantum threats might materialize.
4. Risk Mitigation: Evaluate preventive measures, including key size adjustments, post-quantum cryptography, and blockchain-specific considerations for data immutability.
5. Overall Risk Evaluation: Rank risks by severity to focus on high-impact threats with shorter timelines.
6. Ongoing Assessment: Reevaluate threats and update strategies regularly to keep up with advancements.

Daniel Szego - Quantum threat of blockchain and cryptographic systems

This two-part series delves into quantum threats to cryptography and blockchain systems. It also proposes a quantum risks assessment framework for different distributed ledger-based platforms to systematically evaluate quantum vulnerabilities of different DLT platforms. The framework assesses possibilities and impacts of different quantum computing attacks and proposes steps for mitigating risk. It has relatively easy integration possibilities with classical technology and  risk management approaches. 

Quantum theory and qubits

Although the theory behind it is still being investigated, computer scientists try to build computational models and actual computers based on this incomplete and sometimes inconsistent conceptual background. The basic building block is the so-called qubit (quantum bit). Similar toclassical computers that use bits as a basic building block to hide the complexity of the physical hardware, like transistors or analogue circuits, quantum computers use qubits. A normal bit can have two values, either 0 or 1, a quantum bit can have both 0 and 1 as well as all the possible values between 0 and 1 as well (Figure 2). The idea of having 0, 1 and all the possible values in between is called a superposition. It practically models the wave characteristics of the underlying physical particle. A qubit that is in a superposition can be measured as well. If it is measured, a certain value will be measured that is either 0 or 1. At measurement, the wave characteristics of the particle collapses and the object kind description will dominate, causing the measured qubit to have a similar characteristics as a normal bit. Real strength of qubits compared to classical bits is manifested if we are able to use several qubits parallelly. Having n pieces of qubits in superposition states can practically mean that there can be two to the power of n computational state considered in the same time. It can bring in certain situations an exponential faster computational speed than classical computers.

Daniel Szego - DLT Quantum Threat Analysis

Quantum threat of blockchain systems

Considering blockchain-based applications and platforms, there are several areas where quantum risk can be a serious threat. The field is getting especially crucial because there are more and more blockchain applications that are mission critical. Examples are:

• Payment: There are many blockchain-based payment applications, from cryptocurrencies via stablecoins to more regulated CBDC (Central Bank Digital Currency) use cases. They are regarded as mission critical applications so the security of such systems is critical, even under quantum advisory and attack. 
• Store of value: Some of the cryptocurrencies are not used as payment but rather as a store of value. As store of value use cases, it is even more critical to have hacking resistant systems because such systems are supposed to store value for 10 - 20 - 30 years. Hence, a possible quantum hack, even if it affects only one account, might cause severe economic damage for the rest of the network as well.
• Tokens of financial institutions: There are some innovative use cases for tokens issued by regulated financial institutions. Examples might range from deposit tokens to financial security tokenization. In such use cases, security, hacking resistance and even quantum resistance can be highly important because a possible vulnerability might not only cause financial loss but a serious reputation loss at the issuing institute. 
• Blockchain and identity: Identity use cases such as self-sovereign identity or decentralized identity solutions are usually used together with an identity blockchain to improve data authenticity and consistency. Most of the identity use cases are considered to be highly mission critical so a possible quantum hack can cause serious damage.

To analyze possible quantum threat of a blockchain platform or blockchain based application, we propose the following framework, with the following systematic evaluation steps (Figure 1):

Google - Willow, our state-of-the-art quantum chip - 2024

Willow made

 two major achievements.

• The first is that Willow can reduce errors exponentially as we scale up using more qubits. This cracks a key challenge in quantum error correction that the field has pursued for almost 30 years.
• Second, Willow performed a standard benchmark computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion (that is, 10²⁵) years — a number that vastly exceeds the age of the Universe.

Willow video intro

fewer cubit errors

Errors are one of the greatest challenges in quantum computing, since qubits, the units of computation in quantum computers, have a tendency to rapidly exchange information with their environment, making it difficult to protect the information needed to complete a computation. Typically the more qubits you use, the more errors will occur, and the system becomes classical.

 the more qubits we use in Willow, the more we reduce errors, and the more quantum the system becomes.

the random circuit sampling (RCS) benchmark. Pioneered by our team and now widely used as a standard in the field, RCS is the classically hardest benchmark that can be done on a quantum computer today. You can think of this as an entry point for quantum computing — it checks whether a quantum computer is doing something that couldn’t be done on a classical computer. 

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