Would you like to have a discussion?
Since the number of followers has been increasing reasonably, I would be happy if we could share the contents of our minds and have discussions. It would be nice to have a discussion of a different quality from anonymous bulletin boards or X, as it is possible to include specific trading records of stocks.
I think there are many points to nitpick, so please leave comments or anything else. Even if you just have your thoughts as a silent reader, feel free to share.
This time, focusing on the theme of cryptocurrency and the recently announced Google's Quantum Computing, I will first reveal what's in my head.
When considering the characteristics that give Bitcoin and other cryptocurrencies value, I believe that cryptocurrencies with the following characteristics will continue to hold value in the future.
1. Practicality
• Use cases- Financial transactions, smart contracts, decentralized applications (dApps), etc., providing mechanisms that are actually used.
• Existing ExampleEthereum (ETH) is widely used as a platform for smart contracts.
2. Scalability
• Optimization of transaction speed and feesEven when the network is congested, there is a mechanism to process transactions quickly and cost-effectively.
• Existing exampleSolana (Solana, SOL) is characterized by fast and low-fee transaction processing.
3. Security
• Post-quantum securityResistance to quantum computers with cryptographic technology.
• Existing example1. Currently implementing a quantum-resistant algorithm under development project (e.g. Researching Algorand).
4. Decentralization
• DecentralizationA network where there is no central authority or is extremely decentralized.
• Existing ExampleBitcoin (BTC) is one of the most decentralized cryptocurrencies.
5. Interoperability
• InteroperabilityAbility to transfer data and assets between different Blockchain Technologies.
• Existing ExamplesPolkadot (Polkadot, DOT) provides a mechanism to connect different Blockchain Technologies.
6. Reduction of environmental impact
• Energy-efficient protocolInstead of PoW (Proof of Work), it uses energy-efficient PoS (Proof of Stake) and other mechanisms.
• Existing examplesCardano (ADA) adopts a protocol with excellent energy efficiency.
Consideration of vulnerabilities due to quantum computers
Current cryptocurrencies and quantum computers
• The current mainstream cryptocurrencies use public key cryptography (RSA or ECC), which are vulnerable to algorithms of quantum computers (e.g. Shor's algorithm).
• If quantum computers become powerful enough, there is a possibility of hacking wallets by guessing public and private keys.
Conditions under which vulnerabilities materialize
1. The emergence of practical quantum computers
Current quantum computers are still in the experimental stage, and are considered far from being able to decrypt encryption that requires thousands to millions of quantum bits (qubits).
2. Insufficient introduction of quantum-resistant algorithms
If cryptocurrency projects neglect the transition to quantum-resistant algorithms, there is an increased risk of vulnerabilities being exploited.
Cryptocurrency with quantum resistance
Cryptocurrencies and projects prepared for quantum computers already exist, with the following characteristics:
• Adoption of post-quantum cryptographyUsage of algorithms that are difficult to decrypt even with quantum computers.
• Existing exampleIOTA adopts quantum-resistant technology (WOTS+) and is building resilience for the future.
• Network upgrade planEthereum and Bitcoin are also discussing upgrades for quantum resistance.
Outlook and investment considerations for the future
1. Evaluation from a long-term perspective.
As it will take time for the risks posed by quantum computers to materialize, currently mainstream cryptocurrencies are less likely to be affected in the short term.
2. Confirming the technical foundation of the project.
Projects actively engaged in post-quantum cryptography and other cutting-edge technologies can expect long-term security.
3. The importance of diversified investments.
I believe that by diversifying investments into projects with various features such as practicality and security, the safety of the asset class known as cryptocurrency increases, rather than relying solely on one cryptocurrency.
The emergence of quantum computers poses a new challenge for the cryptocurrency market, but technological innovations anticipating this challenge are progressing.
To run Shor's algorithm for decrypting cryptosystems, approximately 5,000 logical qubits are required. In other words, decrypting cryptosystems would require millions of physical qubits. Google's current chip with 105 physical qubits is not seen as an immediate threat, but it is believed that if quantum computing becomes smaller and more commoditized in the future, issues could arise, potentially becoming a turning point including price fluctuations.
• Use cases- Financial transactions, smart contracts, decentralized applications (dApps), etc., providing mechanisms that are actually used.
• Existing ExampleEthereum (ETH) is widely used as a platform for smart contracts.
2. Scalability
• Optimization of transaction speed and feesEven when the network is congested, there is a mechanism to process transactions quickly and cost-effectively.
• Existing exampleSolana (Solana, SOL) is characterized by fast and low-fee transaction processing.
3. Security
• Post-quantum securityResistance to quantum computers with cryptographic technology.
• Existing example1. Currently implementing a quantum-resistant algorithm under development project (e.g. Researching Algorand).
4. Decentralization
• DecentralizationA network where there is no central authority or is extremely decentralized.
• Existing ExampleBitcoin (BTC) is one of the most decentralized cryptocurrencies.
5. Interoperability
• InteroperabilityAbility to transfer data and assets between different Blockchain Technologies.
• Existing ExamplesPolkadot (Polkadot, DOT) provides a mechanism to connect different Blockchain Technologies.
6. Reduction of environmental impact
• Energy-efficient protocolInstead of PoW (Proof of Work), it uses energy-efficient PoS (Proof of Stake) and other mechanisms.
• Existing examplesCardano (ADA) adopts a protocol with excellent energy efficiency.
Consideration of vulnerabilities due to quantum computers
Current cryptocurrencies and quantum computers
• The current mainstream cryptocurrencies use public key cryptography (RSA or ECC), which are vulnerable to algorithms of quantum computers (e.g. Shor's algorithm).
• If quantum computers become powerful enough, there is a possibility of hacking wallets by guessing public and private keys.
Conditions under which vulnerabilities materialize
1. The emergence of practical quantum computers
Current quantum computers are still in the experimental stage, and are considered far from being able to decrypt encryption that requires thousands to millions of quantum bits (qubits).
2. Insufficient introduction of quantum-resistant algorithms
If cryptocurrency projects neglect the transition to quantum-resistant algorithms, there is an increased risk of vulnerabilities being exploited.
Cryptocurrency with quantum resistance
Cryptocurrencies and projects prepared for quantum computers already exist, with the following characteristics:
• Adoption of post-quantum cryptographyUsage of algorithms that are difficult to decrypt even with quantum computers.
• Existing exampleIOTA adopts quantum-resistant technology (WOTS+) and is building resilience for the future.
• Network upgrade planEthereum and Bitcoin are also discussing upgrades for quantum resistance.
Outlook and investment considerations for the future
1. Evaluation from a long-term perspective.
As it will take time for the risks posed by quantum computers to materialize, currently mainstream cryptocurrencies are less likely to be affected in the short term.
2. Confirming the technical foundation of the project.
Projects actively engaged in post-quantum cryptography and other cutting-edge technologies can expect long-term security.
3. The importance of diversified investments.
I believe that by diversifying investments into projects with various features such as practicality and security, the safety of the asset class known as cryptocurrency increases, rather than relying solely on one cryptocurrency.
The emergence of quantum computers poses a new challenge for the cryptocurrency market, but technological innovations anticipating this challenge are progressing.
To run Shor's algorithm for decrypting cryptosystems, approximately 5,000 logical qubits are required. In other words, decrypting cryptosystems would require millions of physical qubits. Google's current chip with 105 physical qubits is not seen as an immediate threat, but it is believed that if quantum computing becomes smaller and more commoditized in the future, issues could arise, potentially becoming a turning point including price fluctuations.
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Well, feel free to speak your mind.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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全勝投資家 : Is American also overwhelmingly ahead in quantum technology like Semiconductors?
さとこじ OP 全勝投資家 : Thank you for your comment. Well, when it comes to quantum technology, the Range expands quite a bit. For example, in terms of hardware, the recent Veru Inc's Willow is advantageous, and even on the software side, Microsoft has developed the Q# programming language. If NVIDIA's QODA also becomes mainstream like CUDA currently, it would become extremely advantageous. Therefore, I think America is strong at present. I also have limitations in my research, so there are many things I don't know, especially at the laboratory level, so I can't definitively say if it's overwhelmingly advantageous due to my lack of knowledge.
全勝投資家 : Thank you very much!
さとこじ OP 全勝投資家 : No, no. I appreciate it too, as sometimes questions can bring new perspectives. If you're okay with a personal response like this, I'm happy to answer any questions, so feel free to ask others as well.
181768802 : I think Google's AlphaFold3 has taken drug discovery to a new level, but it doesn't seem to have gained much attention. I wonder if it is already factored in.
182701948 : The development of quantum computing will definitely endanger the security of cryptocurrencies. Moreover, assets linked to existing financial systems other than cryptocurrencies are considered to have no quantum resistance and are more exposed to risks.
Therefore, it is believed that the tokenization of assets such as banknotes and securities will further advance. In such a scenario, it is thought that the evolving Blockchain Technology with superior scalability will prevail (BTC is at least unable to keep up with this trend).
Additionally, it is believed that the technology of cold wallets, which isolate cryptocurrencies from external networks, will further develop.
This concludes the speculation.
さとこじ OP 181768802 : I also think AF3 is a really amazing tool. I can't actually use it myself, so it's within the realm of imagination. Besides drug discovery, I think it would be revolutionary industrially if it could be applied to the development of bioreactors for research on enzymes, for example. I feel like the situation will completely change once more papers and clinical data start coming out and more ventures emerge. Personally, I think it was woven in, but had a small impact on corporate value.
いい野菜♫福来る♡♡ : I would like to pay attention to the conditions to be met before the use case starts and the results obtained after the completion of the process.
さとこじ OP 182701948 : I really think so. Existing financial systems are rather fragile, and regardless of whether it is BTC or not, I think that cryptocurrencies respond more quickly. Also, in terms of scalability, I can't help but consider the possibility of BTC becoming obsolete as a cryptocurrency. I don't think it will collapse immediately due to decentralization and commonality, but when I think about whether BTC will be used as a cryptocurrency 100 years from now, I imagine the possibility is quite low.
さとこじ OP いい野菜♫福来る♡♡ : Thank you for your comment. As it is now, just the fact of using ETH to purchase NFTs makes it feel like a game for the wealthy when considering gas fees. Also, when thinking about it as a means of payment, I can't help but feel that within the entire cryptocurrency world, it's like the Gold standard level, so I would like to keep an eye on it.
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