14th Dec 2021
By: Defiance ETFs
Quantum computing company IonQ, together with the Special Purpose Acquisition Company (SPAC) dMY Technology Group Inc. III, made history last month when they completed their merger and made IonQ the first pureplay quantum computing stock to be publicly traded. IonQ is now trading on the New York Stock Exchange (NYSE) as IONQ.1
While this is cause enough to place IonQ in the media spotlight, its impact ripples across the broader quantum and next gen computing ecosystem.
IonQ’s achievement testifies to the strength of quantum
The success of IonQ has implications for the future of quantum computing. As Peter Chapman, President and CEO of IonQ, stated, “Quantum is here, and IonQ is leading the industry with our revolutionary trapped-ion technology. Over the past six years, we have taken this critical technology out of the lab and have developed it into a commercial product.2”
Mike Wheatley, analyst at SiliconAngle, agrees, writing that “By going public, IonQ is showing the world that quantum computing is ready for prime time.3”
IonQ’s commercial success is also reassuring people considering whether or not to invest in quantum computing, that the sector has growth potential. The company announced last month that it had tripled its expectations for 2021 total contract bookings from $5 million to $15 million. The SPAC deal alone generated over $630 million, and the company is valued at more than $2 billion.4
IonQ is breaking a path for quantum computing
IonQ is a trailblazer in the quantum world. It’s currently the only company to sell quantum computing access through the cloud, with its system available on Amazon Braket, Microsoft Azure, and Google Cloud. The results are already being felt: financial services company Fidelity is using IonQ to create quantum algorithms that calculate the chances of a borrower defaulting on a loan, and Goldman Sachs is using it to develop better algorithms that predict stock price movements5.
At 22 qubits (a qubit is the basic unit of quantum information—the quantum version of the classical binary bit), IonQ is also fielding the most advanced and powerful computer, and more significantly, it’s confident that it will break the 1,000 qubit barrier within a few years. Most industry leaders believe that quantum computers need to pass this threshold in order to compete head to head with the classical cloud supercomputer service; Chapman says it will get there “within roughly two years, maybe three.” 6
Additionally, IonQ took a different approach to manipulating qubits. Its computing system relies on photons to manipulate trapped ions suspended in a vacuum, which it says creates a more stable framework than the typical approach that strings synthetic ions onto wires7.
Among the entities keeping a close eye on the progress of IonQ are many involved in cryptography, a crucial pillar of today’s cybersecurity. The development of quantum both threatens, and promises to rescue, the security of today’s encrypted systems.
The impact of quantum on cybersecurity
There are two main types of cryptography backing encrypted systems. Private-key cryptography, or symmetric cryptography, relies on each user sharing the same secret key. As long as key sizes are large enough, this is thought to be generally safe from quantum computing.8
But public-key cryptography, or asymmetric cryptography, is a different matter. It uses public keys that are freely shared, with each user having their own secret key. At the moment, computers aren’t powerful enough to work out these keys, but it’s widely predicted that one day, quantum computers will reach that threshold9. As analyst David Shaw writes, “Algorithms in common use today such as RSA and ECDH are known to be completely broken by future quantum computers.10“
Encrypted material that is stolen and downloaded today is still secure, but it could be deciphered 5 or 10 years down the line, potentially causing great damage.
What this means for cryptocurrency
While this holds a significant threat for a number of entities, including sensitive government departments and critical infrastructure, it is also keeping the cryptocurrency world awake at night. The fear isn’t just that a quantum hacker could reverse-engineer your password and steal your bitcoin from your wallet; it’s that an attack on the digital signatures that secure transactions could knock out the entire crypto economy11.
“If you had a quantum computer today, and you were a state sponsor – China, for example – most probably in about eight years, you could crack wallets on the blockchain,” said Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings. Thorsten Groetker, former Utimaco CTO, adds “Among the first types of digital signatures that will be broken by quantum computers are elliptic curves, as we use them today, for bitcoin wallets.”12
Thought leaders also warn about the possibility of a 51% attack. If a hacker was able to control more than half (i.e. 51%) of the blocks on a blockchain network, they could introduce fake blocks that change, delete, or create new transactions. At the moment this is purely theoretical, but quantum computing could make it a reality.13
Quantum can be the solution as well as the problem
Fortunately, quantum computing companies are already working on ways to use quantum to counteract the threat it itself represents. Groetker predicts that standard quantum-safe crypto algorithms will appear by 202414.
Quantum cryptography methods such as QRNG and QKD use features of quantum, like its intrinsic uncertainty (for QRNG), its antipathy to cloning (for QKD), and preclusion of quantum state entanglement (for more advanced QKD protocols), to open up wider capabilities in quantum-based security.15 The main obstacle in the way is the need to achieve quantum computing’s computational promise16, but as mentioned above, IonQ is moving swiftly to surmount it.
One example is quantum-powered cybersecurity startup Arqit, which recently floated on the Nasdaq through a SPAC deal which saw it valued at $1.4 billion. It is offering a satellite-based quantum crypto system that would enable improved security without high expense. Arqit is leading a consortium that includes BT, QinetiQ Space, and Honeywell, with the aim of providing Arqit’s encryption technology to Western-allied governments.18
IonQ’s big leap could be an even bigger leap for crypto security
The headline news about IonQ’s debut on the NYSE is thus even more significant for cybersecurity, and crypto leaders are probably paying close attention. As well as demonstrating the health of quantum computing stocks and adding impetus to the movement to invest in quantum computing, developments by IonQ, Arqit, and other leading quantum computing stocks could have a major impact on the future of cryptocurrency and other sensitive systems.
1 “IonQ Becomes First Publicly Traded, Pure-Play Quantum Computing Company; Closes Business Combination with dMY Technology Group III” October 1, 2021 https://ionq.com/news/october-01-2021-ionq-listed-on-nyse
2 “IonQ Becomes First Publicly Traded, Pure-Play Quantum Computing Company; Closes Business Combination with dMY Technology Group III” October 1, 2021 https://ionq.com/news/october-01-2021-ionq-listed-on-nyse
3 “Quantum computing startup IonQ to make its stock market debut” September 30, 2021 https://siliconangle.com/2021/09/30/quantum-computing-startup-ionq-make-stock-market-debut/
4 “IonQ Becomes First Publicly Traded, Pure-Play Quantum Computing Company; Closes Business Combination with dMY Technology Group III” October 1, 2021 https://finance.yahoo.com/news/ionq-becomes-first-publicly-traded-120000782.html
5 “How IonQ is planning to bring a quantum computer to the masses” October 1, 2021″ https://www.fastcompany.com/90682375/ionq-quantum-computing-going-public-spac
6 “How IonQ is planning to bring a quantum computer to the masses” October 1, 2021″ https://www.fastcompany.com/90682375/ionq-quantum-computing-going-public-spac
7 “How IonQ is planning to bring a quantum computer to the masses” October 1, 2021″ https://www.fastcompany.com/90682375/ionq-quantum-computing-going-public-spac
8 “How IonQ is planning to bring a quantum computer to the masses” October 1, 2021″ http://www.factbasedinsight.com/quantum-crypto-trust-me-ive-come-to-save-the-world/
9 “How Quantum Computing Will Transform Cybersecurity” January 4, 2021 https://www.forbes.com/sites/forbestechcouncil/2021/01/04/how-quantum-computing-will-transform-cybersecurity/?sh=60b2015e7d3f also “Preparing for Quantum-Safe Cryptography” November 11, 2021 https://www.ncsc.gov.uk/whitepaper/preparing-for-quantum-safe-cryptography also “An Australian strategy for the quantum revolution” May 13, 2021 https://www.aspi.org.au/report/australian-strategy-quantum-revolution
10 “Quantum Crypto – Trust me, I’ve come to save the world” October 13, 2021 http://www.factbasedinsight.com/quantum-crypto-trust-me-ive-come-to-save-the-world/
11 “An Australian strategy for the quantum revolution” May 13, 2021 https://www.aspi.org.au/report/australian-strategy-quantum-revolution
12 “Hacking bitcoin wallets with quantum computers could happen – but cryptographers are racing to build a workaround” June 10, 2021 https://www.cnbc.com/2021/06/10/long-term-crypto-threat-quantum-computers-hacking-bitcoin-wallets.html
13 “Is This New Technology the Biggest Threat to Crypto?” September 26, 2021 https://www.fool.com/the-ascent/cryptocurrency/articles/is-this-new-technology-the-biggest-threat-to-crypto/
14 “Hacking bitcoin wallets with quantum computers could happen – but cryptographers are racing to build a workaround” June 10, 2021 https://www.cnbc.com/2021/06/10/long-term-crypto-threat-quantum-computers-hacking-bitcoin-wallets.html
15 “Quantum Crypto – Trust me, I’ve come to save the world” October 13, 2021 http://www.factbasedinsight.com/quantum-crypto-trust-me-ive-come-to-save-the-world/
16 “How Quantum Computing Will Transform Cybersecurity” january 4, 2021 https://www.forbes.com/sites/forbestechcouncil/2021/01/04/how-quantum-computing-will-transform-cybersecurity/?sh=60b2015e7d3f
17 “Quantum Crypto – Trust me, I’ve come to save the world” October 13, 2021 http://www.factbasedinsight.com/quantum-crypto-trust-me-ive-come-to-save-the-world/