For blockchain to be fully-future proof, developers will have to ensure it is both quantum secure and energy efficient over the next decade.
Registered users can unlock up to five pieces of premium content each month.
Log in or register to unlock this Insight.
A Tale of Two Challenges
Two key events are set to significantly impact blockchain technology in the near-to-mid-term future. Both these events have been long in the making, unfurling slowly from difficult-to-perceive distant threats to issues that risk extinguishing the blockchain ecosystem altogether. The first of these concerns is with the eventual advent of attack-capable quantum computers, and the resulting vulnerability of asymmetric cryptography and therefore digital signatures (the fundamental security mechanisms for authenticating blocks). The second event is an older issue: the growing global concern with climate change and the transition to more sustainable methods of living and doing business.
While the former remains a very niche area of focus for organizations and governments, an attack-capable quantum computer will break the vast majority of blockchains existing today (alongside most cybersecurity technologies using cryptography). Blocks will be broken and many crypto-currencies will be easily hackable. The latter reflects a more generalized concern for the planet, rather than any direct obliterating impact on the blockchain ecosystem itself. It is clear than many blockchain technologies (and especially cryptocurrencies like Bitcoin) have spectacularly high energy consumption and can be extremely wasteful (notably on the mining front). However, greater commitment in western economies for sustainability, including in technology sectors, compounded by the current armed conflict between Ukraine and Russia, is driving energy discussions to the forefront of political discourse.
The Survival of the Blockchain
Ultimately, the quantum and the energy questions will push the blockchain into an existential crisis. Creating quantum secure blockchains will be the first priority, simply because the danger can be more realistically quantified in terms of monetary loss, despite the fact that quantum computers are still a distant threat understood by few. None the less, the publication of the chosen candidates for post quantum cryptography algorithms by the US NIST is imminent (this year), and the availability of the draft standards is close (2023). This means a solution is going to be available before the danger actually materializes (an ultra-rare phenomenon in security). While the math in the algorithms is still new, there is still time to test, break, fix and patch, and implement these solutions before anyone can break Bitcoin’s Genesis Block. The difficulty is, of course, that post quantum cryptography (PQC) is a complex subject, and the blockchain a very decentralized and heterogenous affair with hundreds of thousands of participants, assets, systems, etc. To apply PQC to the blockchain problem will require time and a lot of effort (which there is still).
The energy problem is another matter not quite so easily solved, although the proof is irrefutable. While there is little doubt that the human species is seriously and irrevocably degrading the planet, there appears to be little incentive for the majority to actually do anything about it. Blockchain advocates and stakeholders are about as concerned as that general majority, and so efforts to mitigate the effects of incredible energy consumption of certain blockchain applications and primarily cryptocurrencies (Bitcoin alone is estimated to consume annually between 90-160 TWh globally, which is about the average of a mid-sized European country) and come up with better solutions is left to a small minority of activists. There have been some notable efforts notwithstanding (e.g., the transition from proof of work to proof of stake in Ethereum) but the popularity and value of original applications like Bitcoin continues to grow. The blockchain ecosystem needs to foster greater adoption of applications concerned with sustainability. This might happen to a certain extent anyway, especially with regards to businesses focused on the Internet of Things (IoT) and the imperatives there for low energy consumption. Governments might eventually step in and curb such consumption with regulation, as they often do when the industry won’t self-regulate, but that will come too little too late for the planet.
Name of the Game: Quantum Secure and Lean
There is no question that blockchain faces some significant obstacles in the next decade. Yet there is hope. There are companies which are already breaking down those obstacles. Outfits like Minima are leading the way. The startup offers a mobile-native blockchain that is quantum secure and lean. From a security perspective, Minima uses the Winternitz One Time Signature scheme (WOTS) for the signing algorithm, which is quantum resistant. Further, it uses relatively small key and signature sizes, which fits well with the startup’s sustainability focus. For energy efficiency, Minima runs a cooperative system where only a minimum amount of energy is required to secure the chain (this enable nodes to run on smartphones) as opposed to a competitive system like Bitcoin where miners are incentivized to use the maximum amount of energy that is economically viable to mine digital coins.
Overall, this means it can scale easily while remaining small and unburdensome. Interoperability is built in and so it can work with side chains (and therefore off chain too), which is important for businesses. Importantly, it is already running applications for varied use cases: telecom network access, Vehicle-to-Vehicle (V2V) and Vehicle-to-Everything (V2X), IoT Machine-to-Machine (M2M), loyalty and payments, digital rights management (e.g., NFT marketplaces), and supply chain tracking. Solutions like those developed by Minima represent the future of blockchain as they are sustainable and secure enough to anticipate future threats. For industry implementations where the lifecycle is in the decades, these are the kinds of solutions that the blockchain ecosystem must prioritize in order to ensure its survival and cement its legacy as a transformative technology. That, or face gradual extinction.