The pace of the past few weeks have revealed several updates to the data security world. From Chinese researchers announcing quantum supremacy as their quantum computer, named Jiuzhang, completed a computation that would have taken the world’s best supercomputers 2.5 billion years to complete, to Crown Sterling and IBM releasing quantum-resistant encryption solutions, the true reality of computational power is only just emerging. Of course, in the midst of the threat of future quantum-powered data breaches, our concerns revert to the value protection and control of Bitcoin. As these progressions in quantum computing take place, we can’t help but ask: are my Bitcoin safe?
The surface level answer, as doomsday preppers might lean toward, is no. So, we’re here to tell you that there are precautionary steps that you can take to ensure the value protection of your coins and continue transacting without existential data protection concerns.
Per a release from Deloitte, around 25% of the world’s mined Bitcoin are at risk of attack: the risk that a quantum computer will guess a wallet’s private key password. This risk exists because when a Bitcoin holder engages in a transaction, quantum computing makes their public key identifiable through its knowledge of the users’ wallet address. Once the public key is discovered, quantum computers will be able to derive a user’s private key from the public key and take control of their Bitcoin. Therefore, preventing quantum attack requires the frequent moving of users’ Bitcoin to unused wallet addresses to keep these coins unidentifiable and impenetrable. If a user’s wallet has not been used to transact on Bitcoin’s blockchain, quantum computers will not have a starting point to begin deriving from.
So, how can you change your wallet address? This happens naturally on crypto blockchains when transactions take place that do not equal their original transfer of value (i.e. when you first receive $20 in Bitcoin, unless you transact with the exact change of $20 that you first received, your Bitcoin will be delivered back to you from the blockchain with a new address, meaning that any transaction below what the original payment was will deliver a new wallet address in return). This is because when users interact with Bitcoin, the whole amount of the original input needs to be transacted with when a payment takes place, meaning that whatever Bitcoin is left over (if the transaction is not exactly $20) will be delivered back to you with a new wallet address. So, our advice? If you’re looking to protect your coins, do not transact with centralized crypto exchanges that only offer one universal wallet address, public and private key for ever user, take your crypto off exchanges and interact with the blockchain yourself, keeping your coins safe on cold storage hardware like the Ledger Nano X.
To learn more on the security that Ledger Nano X offers, read part two of our quantum-proof security advice, coming soon.
By Liam McDonald