On the insecurity of quantum Bitcoin mining (1804.08118v4)

Abstract: Grover's algorithm confers on quantum computers a quadratic advantage over classical computers for searching in an arbitrary data set, a scenario that describes Bitcoin mining. It has previously been argued that the only side-effect of quantum mining would be an increased difficulty. In this work, we argue that a crucial argument in the analysis of Bitcoin security breaks down when quantum mining is performed. Classically, a Bitcoin fork occurs rarely, i.e., when two miners find a block almost simultaneously, due to propagation time effects. The situation differs dramatically when quantum miners use Grover's algorithm, which repeatedly applies a procedure called a Grover iteration. The chances of finding a block grow quadratically with the number of Grover iterations applied. Crucially, a miner does not have to choose how many iterations to apply in advance. Suppose Alice receives Bob's new block. To maximize her revenue, she should stop and measure her state immediately in the hopes that her block (rather than Bob's) will become part of the longest chain. The strong correlation between the miners' actions and the fact that they all measure their states at the same time may lead to more forks -- which is known to be a security risk for Bitcoin. We propose a mechanism that, we conjecture, will prevent this form of quantum mining, thereby circumventing the high rate of forks.

On the Insecurity of Quantum Bitcoin Mining: Implications and Countermeasures

The paper "On the insecurity of quantum Bitcoin mining" explores the potential vulnerabilities introduced by the advent of quantum computing in the domain of Bitcoin mining. With Grover's algorithm offering a quadratic advantage to quantum computers over classical ones in the task of searching an arbitrary dataset—the essence of Bitcoin mining—the paper scrutinizes how this technological leap impacts blockchain security, particularly the rate at which forks occur.

Quantum Mining and the Forking Problem

Classical Bitcoin mining involves individual miners whose attempts are statistically independent, resulting in forks only due to propagation time effects when two miners find blocks almost simultaneously. Conversely, quantum mining leverages Grover's algorithm, where the chance of successfully identifying a block grows quadratically with the number of iterations. Importantly, miners employing quantum computers do not need to pre-select the number of iterations before measuring their quantum state; this allows miners to strategically halt computation and potentially gain profit from forks. Consequently, quantum mining may result in more frequent forks, posing inherent security risks.

Implications of Increased Stale Rates

An increase in stale rates is a significant concern. The presence of forks can escalate security risks like the 51% attack, wherein a block may be replaced in the longest chain if an attacker possesses substantial hashing power. Given that quantum mining can enhance the likelihood of forked chains, the threshold for conducting such attacks might potentially decrease below 50%, depending on the stale rate. Additionally, fairness issues may arise where large miners disproportionately benefit from the mining rewards, encouraging centralization and risking network security.

Countermeasure Proposal

To address the aggressive quantum mining strategy (AQMS) and its implications, the paper proposes a revised default tie-breaking rule. This rule factors the difference between the block's timestamp and its received time into the penalty calculation for resolving forks, potentially discouraging miners from adopting aggressive quantum strategies. This countermeasure aims to deter strategies that exploit timestamp discrepancies, thereby maintaining a lower stale rate.

Theoretical and Practical Implications

The introduction of quantum computers into Bitcoin mining raises both theoretical and practical questions regarding equilibrium in miner strategies. While quantum mining provides computational advantages, it also introduces complexity in predicting optimal strategies, which may depend on network dynamics and miner characteristics. The quadratic speed-up not only alters the expected rewards from mining hardware investment but also impacts transaction confirmation times, thus affecting user experience on the network.

Future Directions in AI and Quantum Technologies

As quantum computing technology progresses, further research should explore equilibrium strategies in quantum mining, assessing the broader implications on Bitcoin network stability, fairness, and decentralization. The integration of alternative consensus mechanisms, such as proof-of-stake, or developments in post-quantum cryptography could offer viable paths forward to safeguard cryptocurrencies against quantum threats.

In conclusion, while the advent of quantum technologies heralds potential computational advances, it also necessitates a re-evaluation of existing security protocols in decentralized networks like Bitcoin. The paper's insights into quantum mining vulnerabilities emphasize the need for proactive adaptations to secure the future of digital currencies against emerging technological challenges.