Invest
Finance’s biggest disruptor is in a race to escape the same fate
Quantum computers aren’t a problem that crypto investors need to worry about yet, but they will be.

Finance’s biggest disruptor is in a race to escape the same fate
Quantum computers aren’t a problem that crypto investors need to worry about yet, but they will be.

Breakthroughs in quantum technologies might be the biggest threat that cryptocurrency investors aren’t thinking about.
According to KAZ founder Peter Kazacos, advances in technology are the biggest risk for bitcoin, “particularly with the advent of quantum computing, which could break current implementations of cryptography”.
Speaking to nestegg, Mr Kazacos suggested that quantum computing, if left unchecked, could be “apocalyptic” to the crypto world.
Quantum computing remains a niche and nascent field, but innovation in it is rapidly accelerating.
CSIRO estimates suggest that quantum technologies could become a $86 billion global industry by 2040.
Combining the complex sciences of information technology, chemistry and physics, quantum computers are unlikely to replace traditional computers in the mainstream. They aren’t so much better computers as they are computers that are exponentially better at very specific things.
Unfortunately, the capability of quantum computers to solve problems that traditional computing systems currently cannot is as exciting as it is problematic.
It’s not yet known how many fields or sectors could benefit from this kind of exponential speed-up that quantum computers promise, but the implications of quantum advancements on cryptography are something that those with money in cryptocurrency markets may want to keep an eye on.
Mr Kazacos noted that the cryptography upon which many blockchain protocols are based rely on are ultimately deterministic, making it vulnerable to breakthroughs in quantum computing.
“These algorithms, whilst complicated are prone to deconstruction by quantum computers, which will have the ability to determine patterns and operate in combinations and speeds not currently possible on conventional computing systems,” he explained.
Even in a world where functional quantum computers remain incredibly rare, the possibility of the technology being able to crack the previously-uncrackable algorithms protecting the most popular blockchains at all would have an enormously disruptive impact on cryptocurrency markets.
In preparation for the day when this possibility becomes a reality, Mr Kazacos advocates for combining today’s blockchain technologies with the emerging practice of quantum cryptography to create more secure and quantum-proof protocols.
“Quantum cryptography cannot be hacked by any computer system, quantum or otherwise,” Mr Kazacos explained.
For example, KAZ’s own quantum tech uses the tunnelling of electrons to produce quantum cryptographic keys. Since these keys are truly random, rather than algorithmically random, they are unable to be reverse-engineered by regular and quantum computers.
“This technology can change the very future of crypto security now and remove the threat posed by quantum computers,” he said.
For now though, quantum-protected blockchains remain scarce.
Mr Kazacos said that the only cryptocurrency currently using quantum technology is Quantum Assets on the Binance Smart Chain.
Despite the slow uptake, he maintains that the threat posed by quantum computers is all too real. He noted that quantum computers like IBM’s Quantum System One already exist, with more and more innovations being made every day.
“It’s not a problem for the future; it’s a problem for now,” he said.
Mr Kazacos said that taking advantage of the opportunity to be proactive about the problem quantum poses, as opposed to being reactive and attempting to mop up the mess once the damage is done, is critical.
“Investors should pick cryptos based on their plans for protecting their cryptography from attacks from quantum systems,” he said.
In the future, he predicted that there would be “immense” demand for quantum cryptography to protect against quantum computing.
“Being on the right side of the quantum revolution will mean huge profits and windfalls for those investors who back the right projects,” he said.
About the author

About the author


Cryptocurrency
New Cosmos ETF offers access to ethereum
Cosmos Asset Management has launched another crypto ETF in Australia. ...Read more

Cryptocurrency
1 in 9 Australians have purchased crypto in the last year
A consumer group has released new data into crypto-assets. ...Read more

Cryptocurrency
CBA hits pause on in-app crypto tool
CBA has paused the rollout of in-app cryptocurrency trading. ...Read more

Cryptocurrency
European Central Bank president says crypto is ‘worth nothing’
European Central Bank president Christine Lagarde has shared her views on the value of crypto and the importance of regulation. ...Read more

Cryptocurrency
Will ‘cryptogeddon’ follow the stablecoin crash?
The collapse of TerraUSD last week sent the crypto market into a panic, raising fears about broader financial implications. ...Read more

Cryptocurrency
UNSW receives largest known crypto donation to fund pandemic detection tool
UNSW Sydney has received the largest known cryptocurrency donation to an Australian higher education institution. ...Read more

Cryptocurrency
Three new crypto ETFs commence trading following setbacks
The new crypto-based ETFs have been launched on the Cboe Exchange. ...Read more

Cryptocurrency
Consumers spending more through crypto-linked payment options
Cryptocurrency exchange Crypto.com said that spending via its crypto-linked card had increased, particularly on fashion, transportation, hotels and dining. ...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Cryptocurrency
New Cosmos ETF offers access to ethereum
Cosmos Asset Management has launched another crypto ETF in Australia. ...Read more

Cryptocurrency
1 in 9 Australians have purchased crypto in the last year
A consumer group has released new data into crypto-assets. ...Read more

Cryptocurrency
CBA hits pause on in-app crypto tool
CBA has paused the rollout of in-app cryptocurrency trading. ...Read more

Cryptocurrency
European Central Bank president says crypto is ‘worth nothing’
European Central Bank president Christine Lagarde has shared her views on the value of crypto and the importance of regulation. ...Read more

Cryptocurrency
Will ‘cryptogeddon’ follow the stablecoin crash?
The collapse of TerraUSD last week sent the crypto market into a panic, raising fears about broader financial implications. ...Read more

Cryptocurrency
UNSW receives largest known crypto donation to fund pandemic detection tool
UNSW Sydney has received the largest known cryptocurrency donation to an Australian higher education institution. ...Read more

Cryptocurrency
Three new crypto ETFs commence trading following setbacks
The new crypto-based ETFs have been launched on the Cboe Exchange. ...Read more

Cryptocurrency
Consumers spending more through crypto-linked payment options
Cryptocurrency exchange Crypto.com said that spending via its crypto-linked card had increased, particularly on fashion, transportation, hotels and dining. ...Read more