Quantum Threat Looms Over Cryptocurrencies
EU financial watchdogs have sounded the alarm about an emerging threat to cryptocurrencies: quantum computers. These powerful machines could potentially break the cryptography securing blockchains, making it possible for attackers to derive private keys from exposed public keys and authorize unauthorized transactions.
The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority released a joint risk update warning about the dangers of quantum computing. They cited research by Google Quantum AI, which estimated that breaking certain types of cryptography could require 20 times fewer physical qubits than previously thought.
Cryptocurrency holders are concerned about the potential consequences of a future quantum computer capable of carrying out such an attack. Bitcoin developer Jameson Lopp has proposed phasing out the network's current signatures and restricting how unmigrated funds can be spent five years after the proposal's activation. However, this proposal has not been adopted.
The Ethereum Foundation is taking proactive steps to make Ethereum resistant to quantum attacks by December 2029. This involves updating its execution, consensus, and data layers to use quantum-resistant cryptography.