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Quantum Computers: A Threat to Blockchain?

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In this article, I will look into quantum computers and their potential threats for blockchain projects.

The Concept of Quantum Computers

In 1982, the Nobel Prize winner Richard Feynman suggested how a quantum computer would be used in the modern world.

Just a year later, Apple introduced the “Apple Liza” – a home computer with a 7.89MHz processor, 5MB hard drive and a floppy drive.

Today we walk with portable devices that are thousands and millions of times more powerful, but our modern computers work in the same simple manner, simple math and with the same simple operators. They do it faster and more efficiently, so we forget what happens behind the scenes.

However, so far, in spite of this development, modern computers cannot crack cryptocurrency without the use of vast processing powers.

However, is this true for quantum computers?

To get a better understanding, let us look on Bitcoin address as a prime example.

What is a Bitcoin Address?

A bitcoin address is used to send and receive bitcoins. However, it consists of two parts.

A public key that is visible in general ledger and is needed for accepting payments and a private key that is obtained from the public key.

The private key is 256 bits of information in a random sequence. This 256-bit code consists of 64 characters (within 0-9 / a-f) and further compressed to a 52-character code (using RIPEMD-160).

Even though many people talk about Bitcoin encryption, Bitcoin does not use a hashing algorithm.

The bitcoin address “1EHNa6Q4Jz2uvNExL497mE43ikXhwF6kZm” is translated into the private key “5HpHagT65TZzG1PH3CSu63k8DbpvD8s5ip4nEB3kEsreAnchuDf”, which is then converted in 256 bits private key.

Now, to get access to this Bitcoin address, you first need a private address and, second, a public address obtained from this private key. Meaning by knowing the private address, you can find about the public address.

In addition to this, there is a technically proven theory that due to this “compression,” different private keys/addresses can be used to access the same public key (aka address). This means that your bitcoin address does not have one private key associated with it, but several, and if someone accidentally finds or hacks one of them, then this hacker will get access to all the BTC on this address.

It should be noted that the probability of finding a Bitcoin address with at least some means (or at least used) is minimal, although it is still possible!

How Can a Quantum Computer Pose a Threat?

There are two main concepts behind the quantum computer: superposition and quantum entanglement.

The superposition allows a quantum bit (qbit) to be in several states at the same time, and with the help of quantum entanglement, the observer can find out the parameters of a particle in any position in the universe. The connection is preserved, even if they are moved into different parts of the Universe.

In essence, a quantum computer can process and analyze infinite bits of information at the same time — and so quickly and differently than the human mind cannot grasp it.

How Can You Protect Yourself?

Of course, the best option is to sit straight and watch how Bitcoin and other blockchains introduce new cryptographic features to protect from potential quantum computers threat, but it takes time, and this process can be long at the scaling level.

Another option that can be implemented is to use the blockchain address only once to send a transaction. When quantum computers attack Bitcoin (and other cryptocurrencies), their first target will address that have outgoing transactions on the blockchain, which contains assets.

This is because when the computer first tries to crack the bitcoin address, the starting point is the moment when the transaction becomes public. In other words, this happens when a transaction is “signed up” for the first time — this digital signature, which is formed from a private key and confirms the transaction within the network. Compared to conventional computers, quantum computers could quickly process this information.

Initially, Bitcoin Core software can provide a certain level of protection because it uses only one address and then sends the remainder of funds (if any) to another address in your pool. However, third-party wallets can and use the address several times for outgoing transactions. For example, this can be a big problem for users who accept donations (unless they update their address every time they withdraw funds from there). The biggest drawback of Bitcoin Core software is the amount of space required on the hard drive, as well as the careful saving of updated copies of the entire blockchain. However, as quantum computers evolve, they will inevitably turn SHA256 into one significant vulnerability, and although this will be one of the first hashing algorithms hacked by quantum computers, it will not be the last!

Bottom Line

Developers in the crypto space are fully aware of quantum computer threats, and there are several projects that want to create quantum resistant blockchain, although currently, the main focus lies with other blockchain issues like scalability and transaction speed.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.9 stars on average, based on 42 rated postsVladislav Semjonov has a legal and financial background. He has been involved in crypto space since early 2017 in both ICO advising positions in several ICO consultancy firms, and as an ICO analyst for VC. He began contributing for Hacked.com in April 2017.




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Altcoins

EncrypGen (DNA) Surges Ahead After Two Major Announcements

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Although nobody enjoys a bear market, the downturn has afforded me more time to research promising technology instead of worrying about trading patterns.  Not all projects will survive this downturn.  In fact, most probably won’t.  Instead, companies that have delivered upon their goals and promises will be the ones that soar like eagles.  EncrypGen (DNA) is an extremely promising company I have been following since their Initial Coin Offering in 2017.

Background

EncrypGen made global headlines in November when it launched the world’s first blockchain based genetic data marketplace.  The marketplace, called the Gene-Chain, brings together buyers and sellers to facilitate the exchange of genomic data.  Consumers will be able to both safely store their genetic data and, if they choose, generate passive income by selling that same data to researchers.  The good news for data sellers is that EncrypGen just made a major announcement which will make cashing out much easier.

Consumers Can Now Withdraw Via Bitcoin

As of Monday, consumers can now withdraw the proceeds from their data sales via Bitcoin.  This will allow consumers a quick, convenient, and safe method to withdraw their earnings and use it for whatever they choose.  With the holidays coming up, this is a perfect opportunity for consumers to generate some extra cash that can be used toward making the holidays extra special for everyone.  The next part of this process will include the ERC20/ETH integration.  The integration is expected to be completed in January.

Partnership With Murrieta Genomics

In addition to the new withdrawal method, EncrypGen also made headlines by announcing a major new partnership with Murrieta Genomics.  Murrieta Genomics is a genomic sequencing incubator based out of California.  Murrieta has agreed to offer EncrypGen’s Gene-Chain to the Genomic Data Industry.  This will greatly benefit both individual data users and researchers.  The hope is that this blockchain based solution will lead to more efficient and effective healthcare through the advancement of new medical treatments.

EncrypGen’s Chief Strategist, Joe Cawley, had this to stay about the partnership:

“Today’s Partnership moves Gene-Chain up the value chain toward those generating Next Generation Sequencing (NGS) genomic data, assays and testing techniques.  NGS genomic data unlocks the multi-trillion dollar personalized medicine market.”

Indeed, the opportunity currently available in genomics and personalized medicine is enormous.  Although there are a few competitors in this space, they have yet to even release an alpha platform.  Additionally, given the regulatory hurdles that new entrants will face, EncrypGen’s closest competitors are likely years behind.  As those competitors work on getting a platform built, EncrypGen will be focused on developing strategic partnerships that will enable the Gene-Chain to become the world’s go-to marketplace for genetic data transactions.

Conclusion

With the Gene-Chain now live, EncrypGen is focusing its attention on developing more strategic initiatives such as the partnership with Murrieta Genomics.  DNA token holders can expect more announcements like this over the next 6 months.

Although the crypto market is extremely depressing for all involved, traders must not lose sight of the end goal.  I recently wrote an article that the crypto market is still in the earliest phase of the technology adoption lifecycle.  EncrypGen is a pioneer in both crypto and genomics.  And I fully expect EncrypGen to not only survive the bear market but to prevail in the end.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

4 Reasons Why Traders Shouldn’t Miss Out On ABCC Exchange

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As most crypto traders are aware, 2018 has been a bloodbath beyond anyone’s wildest imagination.  Most, if not all, gains from 2017 have been wiped out.  And while the pain will certainly end at some point, it’s unclear when that will be.  But as Harvey Dent famously said in The Dark Knight, “the night is darkest just before the dawn.  And I promise you, the dawn is coming.”  When brighter times do finally come, trading volume will certainly explode again as old investors return and new investors discover cryptocurrencies for the first time.  A platform that is poised to benefit from that growth is ABCC Exchange.

ABCC Exchange is a world-class digital assets exchange that aims to provide a frictionless, user-centric trading experience. The company is focused on embracing the philosophy of decentralized technology which essentially means open, frictionless and participatory.

The company’s main goal is assisting investors with identifying valuable decentralized technology assets, offering a secure online trading platform and providing professional trading services.  Below are four reasons why ABCC may be on the verge of revolutionizing crypto trading.

Reason #1 – State of the Art Trading Features

While many other trading exchanges have only basic functionality and very limited order types, ABCC is just the opposite.  It’s a state of the art platform that caters to both beginner and experienced crypto traders.  For a while, ABCC offered just its base trading platform.  But on November 2nd, the company launched its beta version of the ABCC Pro.  The Pro version benchmarks with the user experience on top exchanges such as BitMEX.  It also includes the following enhancements:

  • A chart section that includes both candlestick chart and line graph
  • Night mode
  • Enhanced security
  • A “My Assets” section where traders can now view real-time updates in their total assets
  • Full-screen mode
  • Ability to see customer orders directly within the depth
  • 160+ trading indicators
  • Stop loss and stop limit
  • Easy-to-use mobile APP

Crypto volatility has been astronomical during the past few weeks causing traders to spend a lot of time managing their portfolios.  Because of that volatility, traders are always trying to find new ways to risk manage and limit potential losses.  One of the best ways to limit losses is with stop loss orders.  And with seemingly perfect timing, ABCC released the addition of stop loss functionality.

Most crypto traders probably already know what a stop loss is but for those who don’t, here is a quick overview.  A stop loss order is designed to limit an investor’s loss on a position.  For example, setting a stop loss order for 10% below the price at which one bought the crypto asset will limit the loss to approximately 10% should the asset fall to that price level.

As someone who has generally used only the most basic of crypto exchanges, these features are extremely welcome and useful.

Reason #2 – Trading Strategy Competition

Accompanying the release of stop loss functions, ABCC has announced a trading competition in which first place will receive a prize of 2,000 USDT.  The competition is scheduled to begin on December 5 and last for one week.  During the competition, each user will be ranked based upon their rate of return from all trading pairs.  The total prize pool for all competitors is 4,500 USDT.

These competitions are beneficial on several different levels.  It’s obviously beneficial for traders as they get to practice and hone their trading skills on ABCC’s state of the art platform while hopefully doing well enough to earn prizes.  And it’s beneficial for ABCC as it should serve as an opportunity to generate additional revenue through increased trading volume from both existing and new customers.

In August, the company held another trading competition with prizes that included a Tesla, 40,000 USDT, and smaller daily rewards.  So new traders and competitors should expect that the December competition won’t be the last one that ABCC holds.  So if a trader doesn’t do well this time around, keep practicing and perhaps their fortune will change the next time around.

In addition to increased revenue, trading competitions always bring a lot of hype and publicity which should do well toward enhancing ABCC’s brand recognition and ability to serve more customers in the future.

Reason #3 – ABCC Token (AT)

AT, an original token of ABCC Exchange, is mined automatically when ABCC users conduct trading activities via the Trade-to-Mine mechanism. 80% of trading fees from crypto trading and 80% of net profits from options trading are rewarded back to AT Holders in the form of BTC, ETH and USDT.

A new product, Daily Options, was recently launched by ABCC.  This new product also introduces a new use case for AT as traders will be able to make predictions regarding the future price changes of BTC.  ABCC users can expect additional product offerings, such as Daily Options, in the future.

Reason #4 – Vitalik Buterin Endorsement

As blockchain startups look to disrupt industries, it never hurts to have a major endorsement from one of the most prominent figures in the blockchain movement.  Earlier this year, Ethereum founder Vitalik Buterin participated in an interview with Jon Evans at TechCrunch Sessions: Blockchain.  During that interview, Buterin stressed his desire for everything to be decentralized.  Additionally, when the conversation turned toward exchanges, Buterin had this to say: “I definitely hope centralized exchanges go burn in hell as much as possible.”  He said there is no reason whatsoever why some projects need to pay up to $15 million in listing fees just so that people can trade their tokens on centralized exchanges. While it’s still in the early phase for decentralized exchanges, it never hurts to have someone like Buterin on your side.

Conclusion

While the crypto trading environment isn’t what it was in late 2017, the recent volatility has certainly created an opportunity for new exciting platforms like ABCC to fill a void for traders.  One thing not previously mentioned is that ABCC Exchange aspires to list as many good projects as possible.  Unlike other exchanges that attempt to bleed companies dry, ABCC hopes to build strong partnerships and relationships with their listed clients.  Conducting business in this fashion allows both ABCC and the listed projects to grow and prosper together.

The existing platform and the coming enhancements should certainly go a long way to helping traders manage their existing portfolios while simultaneously exploring the market for those undervalued projects that are working on breakthrough technology.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Electronics

Would You Buy the Exodus 1 for 4.78 Ether?

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Taiwanese tech company HTC launched the Exodus 1, its blockchain-based smartphone, on Tuesday, October 23. The phone is only for purchase with cryptocurrency. It sells for 0.15 bitcoins (BTC) or 4.78 ether tokens (ETH), which equals approximately $960, and is available in 34 countries including Taiwan, Hong Kong, the U.S. and the U.K. It’s expected to ship in December.

What makes the phone stand out are its built-in blockchain and cryptocurrency features. It includes a cryptocurrency wallet, called Zion, which runs on a secure enclave on the phone’s chip that’s separate from the Android operating system. The wallet was developed using technology from SoftBank’s Arm Holdings and acts like a separate, miniature OS.

The phone’s blockchain technology enables users to own their own private keys for their wallets and enhances the security and privacy aspects of the device. It could also be used to store other sensitive information. If a user loses access to their funds, they can use the “Social Key Recovery” Feature, which requires several trusted contacts to provide parts of a code that enables the user to regain access.

“And the reason why you do a blockchain phone is … for everybody just to own their own keys,” Phil Chen, HTC’s decentralized chief officer, told CNBC. “Everything starts there. When you start owning your own keys, then you can start owning your own digital identity, then you can start to own data.”

The phone also uses the blockchain in other ways such as running decentralized applications and programs.

Specs of the Exodus 1

Some other specs of the Exodus 1 include its six gigabytes (GB) of RAM, 128GB of storage, 3500mAh battery, six-inch display with quad-HD+ resolution, 16-megapixel (MP) dual main camera and 8MP dual front camera with 4K video. The device runs on a Qualcomm Snapdragon 845 processor. Apps run on Android Oreo. The device is rated as dust-resistant and waterproof.

HTC is inviting blockchain developers to provide feedback on the phone and help improve it. The company plans to release APIs so that third-party services can access the phone’s hardware systems.

“EXODUS 1 is a foundational element of the crypto internet,” Phil Chen said. “For digital assets and decentralised apps to reach their potential, we believe mobile will need to be the main point of distribution. We look forward to partnering with developers in the blockchain community to usher in this vision.”

HTC has indicated that the Exodus 1 is part of a shift in the company’s smartphone strategy.

“We believe blockchain is the new paradigm for smartphones and it will form part of HTC’s wider smartphone strategy,” Chen told CNBC. “This marks a change in HTC, with increased focus on software and IP.”

Another company, a startup called Sirin Labs, is developing its own blockchain-based phone. The device, called Finney, will cost $1000 and is expected in November. A small startup by the name of Sikur became the first to ship a blockchain phone when it launched its Sikurphone, a version of Sony’s Experia phone customized with SkurOS software, in September.

Is It Worth It?

Is the Exodus 1 a worthwhile purchase? While it isn’t cheap, its price is not too far off from that of other high-end but non-blockchain phones. The Exodus 1 might not be for everyone though. For those who aren’t experienced with blockchain technology and cryptocurrency, it’s likely better to wait until this kind of technology matures a bit. If you are, however, getting in on the ground floor may be worth the 4.78 ETH price tag.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsKayla Matthews has been a technology and productivity journalist for over 7 years contributing to publications such as MakeUseOf, The Next Web, VentureBeat and Cointelegraph. She's also the editor of her tech blog, Productivity Bytes, where she writes everything from how-tos to the latest news in technology. To see more of her work, subscribe to Hacked.com or follow her on Twitter @KaylaEMatthews.




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