Quantum computers pose a threat to cryptocurrency security, prompting L1 blockchains to adopt heavy encryption standards without sacrificing network throughput.
Can the industry adapt to these new realities, and what will happen to Satoshi Nakamoto's coins? "Deconstruction" discussed this with Dmitry Khovratovich, a cryptographer and researcher at the Ethereum Foundation.
ForkLog (FL): The U.S. is urgently transitioning the public sector to quantum protection. Is a supercomputer for hacking already in existence, or are authorities just being cautious?
Dmitry Khovratovich (D.K.): This is a response to technological, rather evolutionary changes, but in some sense, it is a preventive measure. The scientific consensus is that the quantum algorithms needed to break modern cryptography cannot yet be executed.
Transitioning to post-quantum algorithms requires significant resources, and there isn't much time left to choose. Some newer algorithms currently under research simply won't be ready by then.
This means we will have to rely on older, slower, and more complex algorithms. We won't be able to endlessly select and improve post-quantum standards, even though they are not entirely satisfactory in terms of performance.
FL: Who will adapt to the new threat faster: officials or the crypto industry?
D.K.: It will be even more challenging for the government to update everything because they may have many outdated software systems still operating on 1980s-90s cryptography. Their task will be, in some sense, to isolate these architectures from potential post-quantum attacks.
From the perspective of blockchains, the later a network started operating, the easier it will be for it to switch to post-quantum algorithms. In newer blockchains like Algorand or Solana, this process will be smoother due to less legacy code.
Updating older networks like Bitcoin and Ethereum, even by directive, is very difficult because of their large user bases. If someone were to change the algorithms voluntarily, there would be significant backlash from the community, which would simply not accept it.
FL: New quantum signatures are significantly larger than standard ones. Can Bitcoin and Ethereum handle such massive data volumes?
D.K.: Post-quantum signatures are not user-centric. While we can afford for each regular transaction to become "thicker," this won't work with validator signatures.
Currently, pre-quantum signatures from tens of thousands of validators can easily be aggregated into one signature of the same size. With post-quantum algorithms, such techniques won't work, requiring much more complex cryptographic aggregation mechanisms.
Undoubtedly, this data volume will put pressure on network performance, and hardware requirements will increase. However, it is reasonable to assume that the transaction distribution scheme will change, and new mechanisms will ultimately be employed to overcome this barrier.
FL: What will happen to abandoned wallets? Will a quantum hacker steal them, or will the blockchain freeze the accounts in time?
D.K.: Users who have never spent assets from their address are safe. Only the hash of their public key exists on the network, which won't be hacked by a quantum computer.
The situation is uncertain for users who have spent funds at least once and have since been inactive. We don't know what to do about them, and everyone understands that there are no good solutions here.
We could freeze such accounts, limit their spending, or forcibly transfer funds to a post-quantum public key. However, all these options have obvious drawbacks, and no one wants to take responsibility for any of them.
FL: The main intrigue is what will happen to the billions in Satoshi Nakamoto's wallets?
D.K.: I think the consensus is that Satoshi is no longer involved in Bitcoin, either because he is deceased or has stepped back. Everyone understands that this money is lost.
If the key has not been revealed, then nothing needs to be done. If Satoshi were to reincarnate, he could prove ownership of his keys, and this proof could be post-quantum.
Because if he is alive and actively monitoring, then it won't be a problem; a solution can be implemented with his help.
The conversation has been significantly shortened. Watch the full episode:
https://www.youtube.com/watch?v=2aUq9V1EDXM
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