The Quantum Countdown: Quantum Computing And The Future Of Smart Ledger Encryption

By Maury Shenk

Sponsored by Cardano Foundation

Long Finance (February 2018), 59 pages.

The Distributed Futures research programme is pleased to announce the release of a report entitled “The Quantum Countdown: Quantum Computing And The Future Of Smart Ledger Encryption”, another in a series of exciting projects in the programme.

Smart Ledgers are based on a combination of mutual distributed ledgers (aka blockchain: multi-organisational databases with a super audit trail) with embedded programming and sensing, thus permitting semi-intelligent, autonomous transactions. Smart Ledgers are touted as a technology for fair play in a globalised world. There are numerous projects building trade systems using this technology with announcements from governments, shipping firms, large IT firms, and the like. The research is intended to inform policy makers and business people making decisions about moving towards these systems.

The report is about a major threat to the security of Smart Ledgers and other systems from quantum computing. If and when large-scale quantum computers become available, there is a concern that such computers would be able to break the security of widely-used public key cryptography, which allows remote parties to communicate securely and authenticate transactions and data without sharing a secret key in advance. Fortunately, there are good solutions to this problem, and better ones are emerging. The hard questions for individual computer system operators involve when and how to address the problem, given its uncertain timing and the evolving solutions. The report explains the problem in detail for both non-technical and technical readers, starting with the essentials of cryptography, quantum computing, and how quantum computing threatens public key cryptography.

The report then considers the available solutions to the problem, and provides frameworks for deciding when and how to respond to it. We conclude that the sky is not falling. However, action may be appropriate now for Smart Ledgers and other computer systems that (i) are new (to avoid later redesign), (ii) have large consequences associated with insecurity and/or (iii) require security of long duration.

Michael Parsons FCA, Chairman, Cardano Foundation commented: “We are pleased to have sponsored this important research and do hope that the guidance herein is of help to business people, technologists, policy-makers, and regulators in considering the implications of the PQC problem.”

Notes to Editors

Cardano Foundation - https://cardanofoundation.org/

Cardano Foundation is a blockchain and cryptocurrency organisation based in Zug, Switzerland. The Foundation is dedicated to act as an objective, supervisory and educational body for the Cardano Protocol and its associated ecosystem and serve the Cardano community by creating an environment where advocates can aggregate and collaborate.

The Foundation aims to influence and progress the emerging commercial and legislative landscape for blockchain technology and cryptocurrencies. Its strategy is to pro-actively approach government and regulatory bodies and to form strategic partnerships with businesses, enterprises and other open-source projects. The Foundation's core mission is to "standardise, protect and promote" the Cardano Protocol technology.

Long Finance – www.longfinance.net

Established in 2007, Long Finance aims to improve society's understanding and use of finance over the long term by hosting and promoting a series of lectures, discussion events and research publications. The initiative began with a question –­ “when would we know our financial system is working?” – and seeks to challenge a financial system that revolves around short-term thinking and practices.

Z/Yen Group – www.zyen.com

Z/Yen is the City of London’s leading commercial think-tank, founded to promote societal advance through better finance and technology. Z/Yen ‘asks, solves, and acts’ on strategy, finance, systems, marketing and intelligence projects in a wide variety of fields. Z/Yen manages the Long Finance initiative.

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