The Quantum Cost Math Just Flipped: Crypto's Migration Window | Common S3nse - 2026

Transcript

[music] >> Hello, good morning. My name is Gopikrishnan. I am going to talk about the quantum cost math just flipped. What it means for crypto. So, two things have been certain in the crypto for decades. This one is the 21 million Bitcoin. Other one is the math under your wallet. One thing has been stopped stopped being certain. So, I'll go in detail about this.

First thing, since I'm talking about quantum computer and quantum and the impact of the quantum computer, first I start with what is quantum computer. Classic bits are zeros or ones. That's what you have on your phone, laptop. All of these are classic bits. Whereas quantum bits is zero and one. Superposition. So, you have n bits, then you have two power n states. The most important thing is it's all in parallel. Basically, you can access all this in parallel. So, that means you have two power n the same time. So, if you have n number of bits.

You have probably seen some of the images on the left side. That's the superposition. Superconductor quantum computers. That's IBM and Google has been churning out for decades now. But more recently, there are also other types of quantum computers [snorts] that Atom Computing, Quantinuum, Q-Era, these companies are coming up with. These are not superconductor, but they are mostly trapped ion photonic. So, first let's look at the evolution of quantum computer, how long it's been, and then where it has come from.

So, this graph is on the x-axis you see the years and the y-axis is the physical qubits. Back in 2003, it started with IBM releasing their superconductor quantum computer with four qubits, physical qubits. Really small, and they experimented and they actually uh kind of showcased Shor's algorithm with that. And then after many years, Google came up with a quantum computer with 53 qubits. And then again they used some kind of Shor's algorithm to demonstrate it. But if you see that this more recent development, it's been tremendous. Not just on the superconductor space, but also on the

neutral atom space, trapped ion space. You can see already that there is uh neutral atom quantum computers uh atom computing coming up with their uh um quantum computer. And also uh Quantinuum coming up with their trapped ion quantum computers. This is already existing, and these are already in thousands of qubits, physical qubits. And in future, basically the trajectory is that they're going to be quantum computers with capability of millions of qubits.

Basic the projections. It's very important to know where this this this trend is going. Obviously, everything on the right side is road map. It's not uh existing. It's basically what the these companies promise to deliver. Now, we saw physical qubits. One important distinction between what is physical and logical is if you have used uh RAM, you know that nine bits of RAM or nine nine bits of bit uh nine bits is needed to actually uh store eight bits of information. You always need an overhead because you will always need some space for uncertainties, especially um you know, the particles in the air colliding with your data so that you have some space for overhead.

Whereas in qubits in quantum computer, this overhead is quite large. It's 24,000%. You need 240 physical qubits to have one logical qubits. That means the logical qubit is basically what the quantum computer actually performs with. Whereas everything else is basically erroring out. And now Shor's algorithm, this is the bigger basically from algorithmic side what's the threat to threat to the you know, the crypto cryptography.

Peter Shor established an algorithm uh back in 1994. That's basically it's it's attacking two problems. It's integer factorization and elliptic curve discrete logs. And if you know about these two, these are RSA and ECC. And these are the primary cryptographic protocols that's been used for everything in internet. And basically what Shor proposed is he's proposed uh um algorithm that's basically focused towards using quantum computers to break these.

Not these just just these two, but these are the two popular popular problems that can be solved with this algorithm. Today, everything including Bitcoin, Ethereum, all of this is ECDSA. It It also does use BLS for validators. All of these cryptography are vulnerable. And today there is already of course cryptography that are non not vulnerable to Shor's algorithm. These are SHA- 2 SHA-3 AES-256, and also NIST has bunch of cryptography schema that has that is of the standard that are post quantum.

So now we saw quantum computer and the Shor's algorithm. These are the two sides. One is the hardware, another one is the software side. Now coming to the point of why I say the cost might flip now. So going back to this chart, so again the x-axis is the year, y-axis is the qubits. Um there are two demand that is number of qubits needed to run Shor's algorithm. You can see one is the red and the another one is the uh the ion um ion blue.

If you see that the uh hardware requirement or the physical qubit needs have been gradually decreasing or actually catastrophically decreasing if I have to use the right word. It's been it it's come come down from 2 billion qubits physical qubits to 500 thousand physical qubits when Google published this paper in March. But there have been also papers from K and all who have actually stated you need no you don't need actually 500 thousand. You just need 10,000 physical qubits. Of course it's only theory, it's not yet proven.

On the logical qubit side, you you also see that it's coming down because we are also optimizing. Um there are there are two reasons for actually the demand side coming down. Uh that's primarily to do with optimization of the circuits. Um there's there's been actually like a competition ECDSA.fail. Um for full disclosure, I've also been participating in that, contributing to that. So where we actually use AI to optimize the circuits so that we We less and less number of qubits and the space time that takes to break uh elliptic curve is getting reduced.

So, the So, it's not just the software that's scaling up, but also the algorithm, the circuit design is getting optimized. So, the expectation is somewhere around 20 28 to 2030, that's when all these things to come come together. Of course, everything in future is up to up to, you know, it's skeptical. It might happen, might not happen, especially on the hardware side. We don't know We don't have certainty, but definitely on the on the algorithmic side, it's really getting optimized.

Who can afford this? Today, there's no such quantum computer, so no one has to be afraid of this. So, no fault-tolerant system that exist that can actually break your uh wallets. But by 2028 to 30, there could be first fault-tolerant system that could be owned by a nation state or a leading lab that can actually break ECC. But going forward, maybe in uh beyond that in 2030 beyond, it could be that there are more people who have access to such quantum computers that can break ECC. So, we need to be actually prepared for that.

So, what does this actually means in terms of for us every day? So, our TLS breaks, HTTPS breaks, because everything that we use to communicate is using ECC or RSA, and all of these are basically susceptible to Shor's algorithm with a sufficient quantum computer. And all the banks, all everything that you sign in, logging into your device, uh all of this will break. Of course, crypto itself is totally vulnerable.

Crypto has its challenges compared to the others because others are centrally controlled. So, someone has the responsibility to actually migrate. For crypto, decentralization means there is more challenge to it. Now, this is a privacy conference. So, of course, for privacy, what does it mean? So, every chain has, you know, there are privacy protocols on them, Railgun, Aztec, its own L2 chain, privacy pool. All these privacy protocols have the same vulnerability from Shor's algorithm and sufficient quantum computer. But, beyond that, there is also a unique vulnerability that privacy

protocol has is de-anonymization because even if you can safely move your assets to a a quantum-safe wallets in future, but all the past information people are basically harvesting today, and that means they can actually de-anonymize that and make it public tomorrow. So, yeah, this is you can you can basically save your funds, but you are getting de-anonymized. So, in in here, the quantum itself is not the problem. We have actually enough standards for post-quantum cryptography schemas that are well established, that

has been there for many years. And there are also reference implementation, and Ethereum itself is aggressively moving towards post-quantum world. It's it's very aggressive. It's all happening, but the biggest challenge is how do you get users to migrate? So, what's the migration clock here? So, one of the things that I did some research on to find out what others are doing. So, when you look at different states, like US has an aggressive NSA itself has an aggressive timeline, but if you have seen the recent development um in June um uh President Trump uh did a executive order that basically

set a timeline for the federal government to go to post-quantum solution by 2031. This is actually after the uh Google paper in March. So, it's a reaction to that. But, the thing is uh it has we have as a community established that you we can actually uh improve on what uh Google said, and it's actually 62% improvement on what Google said. That means the new uh information is that the timeline has to be even still but ahead of uh 2030. Enterprises have already been adopting.

They've been ahead on this. Uh for example Cloudflare has two two third of its traffic going through post-quantum encryption. And also uh other enterprises are also adapting. Apple itself has a has a strict target. Google has it. So, everyone has a plan. So, when you look at ask others like Justin Drake from uh um uh Ethereum protocol, he mentioned that he believes uh there is a chance by 2030, 20% chance by 2030, that there will be sufficient post-quantum solution that basically our quantum computer with uh the Shor's algorithm that can break

ECC. And then by 2023, his prediction is 50%. Obviously, standards are coming up, but the biggest paradox is people who lost their key, what they do? What happens to the 4 million Bitcoin that have been supposedly lost. That includes Satoshi's Bitcoin. What happened to all those What happens to all those Ethereum ETH that has been those those have lost keys? So now it comes to you. What do you do?

If you are a builder, pick a schema, make sure you start building planning for post-quantum from today. You look at references like for example Ethereum's uh uh account abstraction gives you a very good uh way to implement your own signature schema. So you can actually use that to have a post-quantum signature schema. If you are a holder, audit your wallet. Check if it's safe or not, especially if you have uh Bitcoin.

You There is still Bitcoin all the wallets coming out of the SegWit wallets etc. These are all already post-quantum safe at rest, but Bitcoin network itself is not post-quantum, but at least these wallets provide post-quantum at rest. And then if you are investor, make sure you talk to your portfolio company. Ask them what are they doing towards this initiative. Myself, what I'm doing, I am doing two projects. One is a post-quantum wallet.

That's Clark. Other one is a is privacy protocol. That's basically post-quantum and cross-chain. So you have the links to these two, clark.io and thirai.io. So you can go there and then it's it's in pre pre-audit in alpha, but it's already live on some minutes. So the Clark is already live in Arbitrum and base. And Tira is live in Arbitrum. So, the cost must the cost map cost map flipped this year.

Governments and enterprises are already moving towards migration. So, the only expensive thing you can do now is wait. Thank you. Any questions?

Yeah. So, for the for the wallets, the migration path is to adopt post-quantum schema. Um so, cryptography schema like uh Sphincs, uh Falcon. Falcon is something that's uh not yet in NIST uh list, but it's basically coming through. So, there are multiple uh schemas that have been approved. And you can use one of them. Sphincs is one of the uh chosen option for even uh even uh Ethereum. So, Ethereum is also uh planning to use lean Sphincs Sphincs uh lean and Sphincs plus. So, you can choose one of them. I'm using actually Sphincs as uh my option, Sphincs plus for option. But, in case of Solana, I'm using Falcon because uh Solana has its

own challenge because each transaction can only take in um 1,000 bytes of information. So, you need a small enough uh signature schema that can fit into one transaction. Otherwise, you need to have batching transactions. Yes. Yes, smart accounts are safe. But, it's not all smart accounts. Today, if you are using the smart account, I don't think so create two is also post-quantum safe. I I need to do some research, but

I don't think so. In In essence, the underlying infrastructure itself is not post-quantum. So, if you think about if you if you take any any safe or or multi-sig accounts, they are the account itself is post-quantum safe, but the signers are still EOS or your your hardware wallets. So, the vulnerability is on the signers, not on the account. So, the account is safe. But, the signers if if you know who are the signers, it's now public and you can basically like run a Shor's algorithm with a sufficient quantum computer to break that and you can you can if you get two out of three, then you you unlock it.

Anyone else?