Quantum Computers Decrypted Banking and Crypto Algorithms?

• Researchers at Shanghai University have made progress in breaking through the mechanisms of the AES algorithm
• They used a quantum computer from Canada’s D-Wave Systems and a quantum annealing technique
• Although they did not obtain passwords, the efficiency of the decryption process was impressive
• This raises concerns about quantum-resistant encryption algorithms for critical systems

South China Morning Post China (SCMP) shared that researchers at Shanghai University led by Wang Chao claim that they were able to crack encryption algorithms used in the banking and crypto industry.

Specifically, they used a Canadian quantum computer from Canada’s D-Wave Systems and a quantum annealing technique, targeting the Substitution-Permutation Network (SPN) structure that serves as the foundation in the widely known and commonly used industry-standard AES encryption.

Decryption Details and Threats to Financial and Crypto Security

Researchers at Shanghai University, led by Wang Chao, claim they used a quantum computer that turned against the Present, Gift-64 and Rectangle mechanisms. These provide the basis for the Substitution-Permutation Network (SPN) structure that makes AES possible.

The AES encryption standard is considered one of the most advanced and secure standards, which is very widely used in a multitude of industries and critical infrastructures, including the financial sector and crypto.

The Quantum annealing technique the scientists used is that quantum tunneling involves particles passing through barriers rather than over them, making finding the lowest point much more efficient than traditional computers trying to simulate such a process.

Wang’s team said:

“This is the first time that a real quantum computer has posed a real and substantial threat to multiple full-scale SPN structured algorithms in use today.”

Although the researchers did not obtain specific passwords, the very speed of their search and the efficiency of the process should make engineers seriously worry about future developments in the context of even more powerful quantum computers and more advanced search approaches.

It is worth noting that for blockchain systems the situation is not so dramatic, as decentralization embedded in the very foundation creates an additional barrier to decryption even in the case of quantum computing.

However, this could theoretically be at risk too, as Vitalik Buterin has already commented by suggesting a simple hard fork that could significantly eliminate the danger of future threats.

Of course, he also noted that this would require network participants to download new software, but that most participants’ funds would remain intact.

Conclusion

Many centuries have been rich in revolutionary technologies, but not everyone can boast one so powerful at once.

First, we got blockchain, which could completely restart the financial system, later we saw unprecedented progress in AI completely changing the way we store and work with information, and now quantum computers have begun to accelerate in the development and challenge of other industries.

Of course, such a large potential impact of key technologies needs to be assessed ahead of time, and appropriate measures need to be thought through, as Vitalik Buterin and some other industry leaders say.

We will be watching very closely for further developments, and even more importantly the mutual impact of key technologies and their applications in the 21st century.