30s Summary

Chinese researchers from Shanghai University have allegedly cracked banking and cryptocurrency transaction encryption using a quantum computer. The researchers uncovered the encryption algorithms Present, Gift-64, and Rectangle, which form the foundation of many cryptographic methods including AES-256, a high-security standard. The study suggests quantum computers can optimize solutions on a large scale and circumvent standard algorithmic barriers, potentially posing a large-scale threat to crypto wallets. Despite limitations that make full-scale quantum hacking unlikely at present, future quantum advancements could expose current cryptographic vulnerabilities. Ethereum co-founder, Vitalik Buterin, has suggested a hard fork as a potential solution.

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So, here’s some cool science news: a group of Chinese researchers say they’ve managed to crack the encryption used in banking and cryptocurrency transactions with the help of a quantum computer. These researchers are from Shanghai University and they used a kind of supercomputer made by D-Wave Systems in Canada to pull this off.

What they did was look for the lowest energy state, a process known as quantum annealing, to crack the encryption algorithms known as Present, Gift-64, and Rectangle. Now, these algorithms form the foundation for what we call the Substitution-Permutation Network (SPN) structure, which is what underlies the advanced encryption methods used to protect cryptocurrency wallets.

One encryption standard in particular, AES-256, is considered to be super secure, but these researchers say quantum computers could pose a serious threat to it. In fact, they described the quantum annealing method they used akin to an artificial intelligence algorithm that can optimize solutions on a massive scale.

Ordinary algorithms exhaust every possible path, but quantum tunneling, which is a part of quantum annealing, lets particles pass through barriers rather than over them. This makes quantum computers more efficient at finding the lowest point since they can avoid obstacles that standard methods usually have difficulty with.

According to the researchers, this is the first time that a real quantum computer has posed a substantial threat to full-scale SPN structured algorithms that are being used right now.

Now, you might be wondering about the implications of all this. If computers can break encryption, that could potentially expose funds of crypto users to potential hackers on a large scale and at breakneck speeds.

However, there are still some limitations that would make a full-scale quantum hack unlikely, at least for now. This includes environmental factors, hardware limitations and the difficulty of coming up with an attack algorithm that can crack multiple systems.

Despite not being able to uncover the specific passwords used in the algorithms, the researchers were able to make larger strides forward than anyone else so far. They suggest that future advancements could lead to stronger quantum attacks and reveal potential weaknesses in current cryptographic systems.

In case you’re curious to know more, you can check out the details of their study in the peer-reviewed paper they published in the China Computer Federation’s Chinese Journal of Computers on the 30th of September.

One more thing, the co-founder of Ethereum, Vitalik Buterin, has already suggested a method to reduce the risk from quantum computing. He suggests using something called a hard fork. In theory, Buterin says, we could start building the infrastructure needed for this as soon as tomorrow. So, don’t freak out just yet. The good guys are onto it.

Source: Cointelegraph