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Fidelity flags a long-term threat hiding in <a href="https://xpertsstudio.com/hargreaves-lansdown-allows-bitcoin-and-ether-trading/” title=”Hargreaves Lansdown Allows Bitcoin and Ether Trading”>Bitcoin‘s code
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Fidelity Digital Assets, the crypto arm of financial services giant Fidelity Investments, has published a research report examining whether Bitcoin’s underlying security could eventually be broken by quantum computers, and what the network’s developers are doing about it.
Bitcoin is a decentralized digital currency that runs on a public blockchain. Every time someone sends Bitcoin, the transaction is authorized using a digital signature, a cryptographic proof that the sender owns the funds.
That signature relies on cryptographic functions that everyday computers in use today cannot solve in any practical amount of time.
But quantum computers, a very advanced kind of machine still in early development, could eventually change that.
Not today but problem no longer theoretical
The report, authored by senior research analyst Daniel Gray, is clear that cryptographically relevant quantum computers (CRQCs), machines powerful enough to actually break Bitcoin’s current signature schemes, do not yet exist. But Fidelity argues the threat warrants preparation now rather than a scramble later.
Bitcoin currently uses two signature schemes, ECDSA and Schnorr, both of which rely on a mathematical assumption called the elliptic curve discrete logarithm problem.
In plain terms, it’s a one-way math puzzle: easy to compute in one direction, practically impossible to reverse.
A sufficiently powerful quantum computer could reverse it, exposing a user’s private key, the secret code that controls their Bitcoin, when a transaction is signed, the researchers warned.
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A fix is already being proposed
Researchers are not starting from scratch. The report highlights a recently formalized Bitcoin Improvement Proposal (BIP) called SHRINCS, developed by Blockstream, a Bitcoin infrastructure company.
The proposal combines two types of quantum-resistant signature schemes, one optimized for everyday efficiency and another as a fallback for recovery scenarios, to balance security against the practical constraint that quantum-safe signatures are significantly larger than current ones.
Larger signatures mean fewer transactions fit in each Bitcoin block, which could slow the network’s throughput. Fidelity notes this trade-off is a central challenge, though it adds that the impact may be less severe given that Bitcoin’s transaction queue, known as the mempool, is currently running near empty.
Source: finance.yahoo.com