Quantum resistant blockchain and cryptocurrency, the full analysis in seven parts. Part 5C.


You can read part 1 here, and part 2 here, and part 3A here, and part 3B here, and part 3C here, and part 4A here, and part 4B here, and part 4C here, and part 4D here

For the introduction, read part 5 A here, and part 5 B here

It’s pretty much an impossible problem to solve without creating other problems. You could create a deadline within which you would need to take action and move your coins. Then burn the “left-overs” after the deadline is passed. The thought would be “all BTC that are on non-quantum secure addresses after passing the deadline, are BTC that owners can’t access, so useless anyway. These are of no actual value to the owners. So no harm done if burned.” But losing the key, doesn’t end ownership. Just ike when you lose the key to your house or car. So that legal point might become an issue for the ones deciding to write the code to actually burn the left overs. But more importantly, you don’t know for sure that the addresses that are left over after a certain amount of time are actual lost addresses because of the human factor. Even after warnings and request to move coins and a deadline, there might still be people that have been preocupied with other aspects of life, or simply have not understood the issue and implications. This opens up another legal point. Legally, burning BTC would just not be possible, because it is impossible to determine if an amount of BTC that is still on an old non-quantum secure address, is there because the owner lost it’s access, or because he just hasn’t moved them to a secure address yet. Decentralized is the problem here. Chainalysis concluded that between 17% (low estimate) and 23% (high estimate) of BTC was lost at the time of publishing. The big discrepancy between the high and low estimate (1 mill BTC) shows the issues there will be to determine with certainty what stagnant addresses are lost and what are long term holders. You can’t just one-sided decide to vaporize someone’s funds. There is no pre-made agreement where is mutually established that this is something investors or users (however you will call crypto holders) should have taken into account when they bought their coins or tokens. Unless we’re talking ERC20 tokens, where you know in advance you will have make the switch at a certain point of time. Burning someone’s assets is just unprecedented. Not everybody is part of “the community”, some just glance at the price every now and then and don’t follow technical development. Investing in BTC doesn’t obligate you to have a reddit or bitcointalk account. There is no preset condition that obligates you to keep up with the developments. So devs would simply not have the right to burn your coins if you don’t migrate in time. It’s a legal issue. You could say, “but we give them a reasonable amount of time, then we burn the left overs.” But what’s a reasonable amount of time that holds in the court of law when we’re talking effectively burning someone’s assets? There is no legal obligation to stay up to date or to move your coins if it’s no pre set condition. So the ones who got burned will take it to court. And even worse for the value of BTC, they will take it to the press. You wouldn’t sue BTC. You would sue the devs who burned your BTC. Those are people whose actions harmed your assets. They deliberately planned and executed code to make sure that your BTC got burned. It ight be just as bad as a hack for the brandname BTC.

Eventually the news will either be “people claiming BTC has burned their portfolio” which will result in legal claims with the necessary fuss and FUD which will damage BTC brand and value, or “BTC was hacked by a quantum computer”. None of the two options are exactly harmless for BTC (or other crypto.) And this event will take place in a time where Quantum Resistant crypto are available which have been QR from the beginning, from genesis block. This new generation of blockchains don’t face these risks and will be the attractive new product and investment.

Is it likely that a hack will occur? What would be the incentive for someone to hack BTC or any other non-quantum resistant blockchain? Would it be practically possible to make enough gains? Would it be cost effective? If they would dump the stolen coins, wouldn’t they shoot themselves in the foot, crashing the price of what they just obtained?

Here’s a scenario: Coins get stolen. Then these coins are sold. Gains are made in fiat. But before the plan is executed, they will short the hell out of the target. So after the hack they start selling slow to get minimum price drops and maximum gains. But when the bag is getting empty, the dump is made. And at the same time, the hacker himself will bring out the news there was a hack using a quantum computer, providing proof including the hacked addresses. The media will eat this news like vultures. The price dumps and due to the shorting, a double gain is made.

Now how about another scenario. No actual hack needs to be done. No criminal activity. Someone at a university with access to a quantum computer. Could be a very profitable PhD project. Or a professor with a side project. Or a white hat hacker. This person could hack his own wallet and write a paper about it and therefore officially proof the blockchain in question is vulnerable. Then short the hell out of the hacked blockchain and publish his paper. Same result when published. The reaction to that news will cause a dump. Oldest trick in the book of financial attacks. Proven over time.

 

In the next part I discuss the time factor.

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Allen Walters
Allen Walters

Fascinated by blockchain and future proofing cryptocurrency. Discover the tech before it gets relevant. Twitter: @IgnoranceIt


Quantum resistant blockchain in 7 parts
Quantum resistant blockchain in 7 parts

Quantum resistant blockchain and cryptocurrency, the full analysis in seven parts.

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