Can Quantum Computers Hack Bitcoin / Ethereum?

Hey everyone, my name is Michael and today I'm going to explain to you guys the quantum threat to Bitcoin, Ethereum and other cryptocurrencies. You might have heard that this year quantum computers are stable enough to be switched online and operating. And you might have also heard that quantum computers can even break modern cryptography. And that applies to Bitcoin and Ethereum as well. In fact, there is also this fear going around that perhaps quantum computers can even break into our wallets and steal our money. And that's actually quite a big fear. And I want to kind of build a knowledge base around this to kind of understand this issue. So first I'm going to explain to you what a quantum computer is, what it can do and what threat it poses to cryptocurrencies. So first of all, quantum computers are completely different from classical computers that we know today. Instead of using kind of electrical circuits, they use quantum properties of atoms. to do calculations. And instead of using ones and zeros, they use quantum states. And this is an extremely different way of approaching computing. Here we can see the quantum computer IBM Q in the background. And you can see these coils and wires. And it has to be frozen to a very, very cold temperature for it to even function and to be stable. So this year they're making breakthroughs and they're actually being able to make a quantum computer that's, you know, actually stable enough to do calculations. Well, quantum computers are actually special enough in the sense that they can actually do some calculations that can potentially break modern cryptography using an algorithm called Shor's algorithm. So before we kind of understand how this kind of all works, let's go back to the very, very basics of cryptocurrency. So if you look at cryptocurrency at its core, it has something that's called a public key, a private key as well. So it relies on this kind of key pair to work. And you ask, why is that important? Well, it's important because with cryptocurrency, you are not the most important person. For example, if in classical accounts and in classical banking, you can go to a bank and you can use your passport to kind of claim your account. So even if you lose your password, even if you lose your bank card, you are the most important person. But with cryptocurrency, you're not the most important person. In fact, the most important thing about cryptocurrency is the private key. With the private key, you can have full access to the account. So you can start sending bitcoins or sending ethereum. And this is the most important thing. So anyone who possesses the private key is actually the account holder or can actually authorize the transaction. So that's why if you lose your private key, then good luck. Or if your private key gets stolen, then also someone can steal your funds. You might notice, you know, these things just explain it a bit more further. When you actually create a wallet, say on Exodus, you actually have a 12 word backup phrase. And this is actually kind of part of your private key. So even if you don't directly interact with your private key, if you use a mobile phone wallet or whatnot, when you click the backup feature, you're actually creating a kind of a clue to your backup key, to your private key. So a lot of this might happen in a background. You don't even realize it. But the most important thing is that you have to realize it's there. It's stored somewhere. And that this is actually the most important thing for cryptocurrency. So going back to it, with classical computing, it's actually extremely, extremely hard to break and figure out your private key. So your private key cannot really be brute force in a kind of reasonable amount of time. It may take millions of years for someone to brute force and hack and figure out your private key. And this is the basis of modern cryptography as well. And there's private keys for even websites and, you know, for securing credit card transactions. They all use this similar concept. So right now, it's actually not feasible to break that key with even the fastest computer and even with the fastest supercomputer. It takes millions and billions of years to try for these computers to kind of guess the private key. Well, quantum computers is actually different. Quantum computers can run something called Shor's algorithm. And it actually can potentially figure it out in a reasonable amount of time. So that is what the kind of basis of the quantum threat is and what everyone's talking about. They're talking about potentially if this computer is built, if these computers are fast enough, they can potentially figure out the private key to various Bitcoin accounts and start siphoning funds off these accounts. Well, that's really scary. And before anyone accuses me of talking about fear, let's talk about the limitations of this as well. So this technology, as groundbreaking as it is, it's still at a very, very primitive state. If you look at this computer, it looks nothing like what we know today. And that's because it's extremely hard to maintain this kind of states for quantum computing to work. And right now, we're at such a primitive state and such an experimental state that even if you throw a lot of money at it, they can't improve the technology because they're still experimenting. They're still researching. And that's why even though the first quantum computers are being switched on this year, they're nowhere fast enough to even use Shor's algorithm to calculate and to figure out and hack into Bitcoin or Ethereum wallets in a reasonable amount of time. So there'll be nowhere near close to doing so. Right now, it's really at a proof of concept. Yes, we can do one or two calculations and we're proving that this concept works. But there's no way close to actually doing actual full-on computation. It's not going to break ground until many years in the future. Various articles have various different estimates to when a quantum computer will be kind of fast enough to start breaking into modern cryptography, to start breaking into Bitcoin and start breaking into Ethereum. Most estimates have put around 15 years. So 15 years is actually a long, long time. It's actually, you know, if you think about cryptocurrency, it's evolved a lot in the past three or four years. In fact, Ethereum is only two or three years old. And you can see how many changes they have implemented in these years. So the lucky thing, of course, for us is that because these cryptocurrencies can change, they can also become quantum resistant over time. In fact, Bitcoin, when Bitcoin was created, it already has the quantum threat in mind. And it can build extensions upon Bitcoin to make it quantum resistant. So we, in fact, not only have a long time, but we have like ages in terms of cryptocurrencies. For 15 years to come up with a solution for this. In fact, there are currently solutions being implemented right now. And there's new coins such as the quantum resistant coin, which relies on different algorithms and different ways of sorting data, which is actually very, very resistant to quantum computers. So that technology is already in play. And it's a matter of deploying it into current modern cryptocurrencies. So yes, quantum computers do pose a threat to cryptocurrencies. But this threat can be negated by upgrades to the network. I would love to hear what you guys think about quantum computing. Are you guys excited for it? Are you guys afraid that it's going to, you know, be able to steal your funds in cryptocurrencies? And what more do you want to know about quantum computing? Because this is actually a really interesting topic. And I would love to explore this further with you guys. Guys, thank you so much for watching this video. I make a lot of videos about various cryptocurrencies, cryptocurrency news, and more. So if you subscribe to my channel, you won't miss out on any of that. Guys, thank you guys so much for watching. See you next time.