How Quantum Computers Could Impact Cryptocurrency Mining

Quantum computers could theoretically significantly change the landscape of cryptocurrency mining, and their use in this area could have significant consequences. Let's look at exactly what changes may occur and how they will affect the crypto industry.

1. General principles of cryptocurrency

Before you understand what mining is and how quantum computers can affect it, you need to understand what cryptocurrency is and how it works.

Cryptocurrency is digital money that exists only on the Internet and is not controlled by banks or governments. The main technology on which it is based is called blockchain.

Blockchain – it’s like a big ledger where all transactions (money transfers) between users are recorded. Imagine a long chain of blocks, where each block is a page in this book. Every time someone sends cryptocurrency to another person, that transaction is recorded in a new block. These blocks are linked together in the order in which they were created, like the pages of a book that follow one another.

The main feature of the blockchain is that this ledger is checked and stored by many people around the world. Because of this, it is almost impossible to falsify or change data in the blockchain – to do this, it would have to be changed for all participants in the network at once, which is practically impossible.

Thus, thanks to the blockchain, the cryptocurrency remains fair and secure, since everyone can check all transactions and make sure that everything is in order.

To create a new one block, special computers, need to solve a complex mathematical problem. It's like a competition: whoever solves the problem first will add a block to the chain and receive a reward in the form of cryptocurrency. This is called cryptocurrency mining. Each block has its own unique solution, which is also written in the block header. Moreover, for each block there are several solutions – it is enough to find at least one of them.

2. Now more about adding new blocks to the blockchain

Mining cryptocurrencies such as Bitcoin involves solving complex mathematical problems known as cryptographic hash functions (such as SHA-256 for Bitcoin).

Here's how it works in more detail:

• Block title: In cryptocurrencies such as Bitcoin, contains several important fields such as version, previous block hash, Merkle tree root hash (which represents all transactions in the block), timestamp, difficulty target, and nonce.

• Nons: A nonce is a special number that miners change in order to find a block hash that satisfies the difficulty conditions. Every time a miner changes the nonce and hashes the block header, he receives a new hash.

• coinbase transaction — each new block in the blockchain begins with a coinbase transaction. This is a special transaction that creates new bitcoins out of nowhere and includes them in this block. The coinbase transaction specifies the address of the miner's wallet to which new bitcoins are credited as a reward for the computational work of finding a new block and confirming transactions.

• Hash Process: Miners continue to change the nonce and hash the block header until they find a value such that the resulting hash starts with a certain number of zeros (or is less than the target difficulty value). This hash value is a valid solution.

• Several valid solutions: Because there are a huge number of possible nonce values, there can be many different hashes for a single block that satisfy the complexity conditions. This is why they say that for each block there can be several solutions. However, for any given nonce value, there is only one unique hash.

• Writing to a block: Once the miner finds a valid hash, the block header with the found nonce is recorded and distributed throughout the network for verification. If the network nodes confirm the block, it is added to the blockchain, and the miner receives a reward to the address specified in the coinbase transaction.

Let's look at an example to make it easier to understand the principle of “mining”:

Initial data:
Let's say you have a block of transactions that needs to be added to the blockchain. This block contains a list of transactions, a timestamp, and other data. To simplify the example, let's assume that the block includes the following transactions:

Транзакция 1: A → B (1 BTC)
Транзакция 2: C → D (2 BTC)

Merging block data:
All block data is combined into a single data block. For example, the data might look like this (simplified):
Block Data: "A→B1BTC;C→D2BTC;Timestamp:20240615;PreviousHash:000000...0000"

Block hash calculation:
Now miners must find a hash that meets the difficulty criterion. For example, a hash must start with a certain number of zeros. Let's say the current complexity requires that the hash start with four zeros: “0000”.

To do this, miners add a random number (called a “nonce”) to a block and calculate a hash for the combination of the block data and this number. For example:

Block Data + Nonce: "A→B1BTC;C→D2BTC;Timestamp:20240615;PreviousHash:000000...0000;Nonce: 1"

Applying the SHA-256 hash function to this string produces a hash. Miners continue to change the nonce and calculate hashes until they find a suitable hash. For example:

Nonce: 1 → Hash: "5d41402abc4b2a76b9719d911017c592"
Nonce: 2 → Hash: "7d793037a0760186574b0282f2f435e7"
Nonce: 3 → Hash: "0000ffae67a2fcd34b2bb4eea4b0f82d"

When a miner finds a nonce that produces a hash that matches the difficulty criterion (in our example, “0000ffae67a2fcd34b2bb4eea4b0f82d”), it declares that block found, and the block is added to the blockchain. The miner receives a reward in the form of new coins to the wallet address specified in the coinbase transaction of the newly created block.

I deliberately left out a lot of details and subtleties so as not to complicate an already difficult topic to understand. You can get details in articles that relate to specific details of the blockchain.

2. Quantum computers and computing tasks

Quantum computers use quantum qubitswhich are capable of existing in superpositions states, allowing them to solve certain classes of problems much faster than classical computers.

Qubits (quantum bits) – this is the main element of information in quantum computers, an analogue of classical bits, but with important differences:

Superposition: While a classical bit can only be in one of two states – 0 or 1, a qubit can be in a superposition of these states, that is, it can represent both 0 and 1 at the same time. This is described by quantum mechanics and allows the qubit to perform many calculations in parallel.

3. Quantum computers in mining

Speed ​​increase: Quantum computers can significantly reduce the time required to find the correct hashes. As a result, miners will be able to compute new blocks faster, potentially leading to a concentration of effort in the hands of those with access to quantum hardware.

Changing Difficulty: The blockchain has a built-in hashing difficulty adjustment mechanism to maintain system stability. If the number of powerful miners increases due to the use of quantum computers, this will automatically increase the complexity of the problem.

Impact on the cryptocurrency economy: On the one hand, quantum computers could speed up the production of new cryptocurrencies, which could lead to their depreciation due to increased supply. On the other hand, miners with quantum equipment will gain a significant advantage, creating an unequal playing field on the network.

The impact of quantum computers on cryptocurrency

If we imagine that hashes for new blocks will be calculated faster on quantum computers, this could lead to the fact that a significant share of all currency tokens (coins) may end up in the hands of a small group of people who have access to such equipment. Such fears are not completely groundless, because if you use Grover's algorithmquantum computers will be able to more efficiently find the right value to add a new block.

Grover's algorithm is a quantum algorithm for accelerating the search for solutions in disordered databases or environments. Its applications in cryptographic contexts such as hash lookup include the use of superposition and quantum parallelisms for faster testing of possible solutions. Let's look at how this algorithm can be used to quickly find the value needed to add a new block to the blockchain, and how much more efficient this will be compared to classical methods.

How Grover's algorithm can speed up the search for a value:

Using Grover's algorithm, you can formalize the problem of finding a hash as the problem of finding a value in an unordered database. Grover's algorithm allows searching for elements in a database of (N) elements, with time complexity

A quantum computer can create a superposition of all possible nonce values ​​simultaneously. By using oracle (black box) that checks each value against hash conditions, Grover's algorithm can be used to amplitude amplify the state corresponding to the correct nonce.

Grover's algorithm iteratively enhances the amplitudes of correct solutions so that after approximately iterations, the correct nonce value will be found with high probability.

Efficiency comparison

• Classic case: In classical calculations, the search for the desired nonce is carried out by enumerating possible values. The complexity of this problem is ( O(N) ), where ( N ) is the number of possible nones.

• Quantum case with Grover's algorithm: Grover's algorithm reduces the time complexity of the problem to . For the nonce search problem, this means that instead of methodically checking all (N) possible values, you need to check approximately values.

Efficiency: If the classical approach requires, for example, checking possible nonces, Grover's algorithm will require operations.
This implies an acceleration of once.

Conclusion

To date, quantum computers have not yet become powerful and affordable enough to significantly change the situation in the field of cryptocurrency mining. However, their future development could indeed bring major changes and requires the attention of both cryptographers and miners. Maintaining the security and efficiency of blockchain systems will be a critical aspect in the era of quantum computing.