Quantum computers may breach banking and crypto encryption, warn scientists

Chinese researchers from Shanghai University have claimed a significant breakthrough in quantum computing, asserting that they breached encryption algorithms commonly used in banking and cryptocurrency. Led by Wang Chao, the team employed a quantum computer from Canada’s D-Wave Systems to exploit vulnerabilities in the Present, Gift-64, and Rectangle algorithms, which form the backbone of the Substitution-Permutation Network (SPN) structure underpinning advanced encryption standards (AES) widely used for securing cryptocurrency wallets.

While AES-256 is regarded as one of the most secure encryption standards, the researchers warn that the advent of quantum computers could pose a serious threat to traditional password protection. Their technique, based on quantum annealing, operates similarly to artificial intelligence algorithms, allowing for more efficient searches by circumventing obstacles that traditional methods struggle to overcome.

Despite these advancements, the researchers noted that practical limitations remain, such as environmental factors and hardware constraints that prevent a full-scale quantum attack at this time. However, they emphasised that future developments could uncover new vulnerabilities in current cryptographic systems.

Ethereum co-founder Vitalik Buterin has proposed a potential solution to mitigate the risk posed by quantum computing, suggesting a hard fork of the Ethereum blockchain to implement new wallet software and enhance security. He indicated that the necessary infrastructure for such a move could be developed promptly, providing a proactive approach to safeguarding user funds.