The Quantum Cost Math Just Flipped: Crypto's Migration Window | Common S3nse - 2026

[music] Hey all, good morning. My name is Gopi Kapan. I'm going to talk about uh the quantum cost math just flipped what it means for crypto. So two things have been certain in the crypto for decades is one is the 21 million bitcoin other one is the math under your wallet one thing has being stopped stopped being certain so I'll go in detail about this first thing since I'm talking about quantum computer and quantum uh and the impact of the quantum computer first I start with what is quantum computer Classic bits are zeros or ones. That's what you have on your phone, laptop.

All of these are classic bits. Whereas quantum bits is zero and one superposition. So you have n bits then you have two power n states. The most important thing is it's all in parallel. Basically you can access all this in parallel.

So that means you have two power n at the same time. So if you have a number of bits you have probably seen some of the images on the left side that's the superp position uh uh superconductor quantum computers that's IBM and uh Google has been turnurning out for decades now but more recently there are also other types of quantum [snorts] computers that atom computing quantennium uh Q era these companies are coming up with these are not superconductor but they are mostly trapped ion photonic. So first let's look at the evolution of quantum computer how long it's been and then where it has come from. So this graph is on the x-axis you see the years on the y-axis is the physical cubits back in 2003. It started with IBM releasing their superconductor quantum computer with four cubits physical cubits really small and they experimented and they actually uh kind of showcased shores algorithm with that and then after many years Google came up with a quantum computer with 53 cubits and then again they used some kind of source algorithm to demonstrate it.

But if you see that this more recent development it's been tremendous not just on the superconductor space but also on the neural atom space trapped ion space you can see already that there is u neural atom quantum computers uh atom computing coming up with their uh quantum computer and also uh quantium coming up with their trapped ion quantum computers. This is already existing and these are already in thousands of cubits physical cubits. And in future basically the trajectory is that they're going to be quantum computers with capability of millions of cubits. Basic the projections. It's very important to know where this this this trend is going.

Obviously everything on the right side is road map. It's not existing. It's basically what these companies promise to deliver. Now we saw physical cubits. One important distinction between what is physical and logical is if you have used uh RAM, you know that 9 bits of RAM or nine bits of uh nine bits is needed to actually uh store eight bits of information.

You always need an overhead because you will always need some space for uncertaintities especially um you know the particles in the air colliding with your data so that you have some space for overhead. Whereas in cubits uh in quantum computer this overhead is quite large. It's 24,000 percentage you need 240 physical cubits to have one logical cubits. That means the logical cubit is basically what the quantum computer actually performs with. Whereas everything else is basically erroring out.

And now shorce algorithm this is the bigger basically from algorithmic side what's the threat to uh threat to the uh you know the crypto cryptography uh Peter Shaw established an algorithm back in 1994 that's uh basically it's it's attacking two uh problems uh it's integer factorization and elliptic curve discrete logs and if you know about these two these are RSA and ECC And these are the primary um cryptography protocols that's being used for everything in internet. And basically what shores proposed is he's proposed uh um algorithm that's basically focused towards using quantum computers to break these not these just just these two but these are the two popular u popular uh tractable sol problems that can be solved with this algorithm. Today everything including Bitcoin, Ethereum, all of this is ECDSA. ET ETH also does uh use BLS for validators. All of these cryptography are vulnerable and today there is already of course uh cryptography that are non not vulnerable to shores algorithm.

These are SHA 2, SHA 3, AES 256 and also NIST has bunch of cryptography schema that is that is part of the standard that are postquantum. So now we saw quantum computer on the shores algorithm. These are the two sides. One is the hardware, another one is the software side. Now coming to the point of why I say the cost math flipped now.

So going back to this chart. So again the x-axis is the year y axis is the cubits. U there are two demand that is number of the cubits needed to run shores algorithm. You can see one is the red and the another one is the uh the iron u iron blue. If you see that the uh hardware requirement or the physical cubit needs have been gradually decreasing or actually catastrophically decreasing if I have to use the right word.

It's been it it's come come down from 2 billion cubits physical cubits to 500,000 physical cubits when Google published this paper in March. But there have been also papers from K atal who have actually stated you need you don't you don't need actually 500 thousand you just need 10,000 physical cubits of course it's only theory it's not yet proven on the logical cubit side you you also see that it's coming down because we are also optimizing u there are there are two reasons for actually the demand side coming down uh that's primarily to do with optimization of the circuits. Um there's there's been actually like a competition ECDSA.fail um for full disclosure I've also been participating in that contributing to that. So where we actually use AI to optimize the circuits so that we need less and less number of cubits and the space time that takes to break uh elliptic curve is getting reduced.

So the so it's not just the software that's scaling up but also the algorithm the circuit design is getting optimized. So the the expectation is somewhere around 2028 to 2030 that's when all these things to come come together. Of course everything in future is up to up to you know it's skeptical. It might happen, might not happen. Especially on the hardware side, we don't know.

We don't have certaintity. But definitely on the on the algorithmic side, it's really getting optimized. Who can afford this? Today there's no such quantum computer. So no one has to be afraid of this.

So no fault tolerant system that exists that can actually break your uh ballots. But by 2028 to 30 there could be first fall tolerance system that could be owned by a nation state or an leading lab that can actually break ECC. But going forward maybe in uh beyond that in 2030 beyond it could be that there are more people who have access to such quantum computers that can break ECC. So we need to be actually prepared for that. So what does this actually means in terms of for us every day?

So our TLS breaks, HTTPS breaks because everything that we use to communicate is using ECC or RSA and all of these are basically susceptible to shores algorithm with a sufficient quantum computer and all the banks all everything that you sign in logging into your device uh all of this will break. Of course, crypto itself is totally vulnerable. Crypto has its challenges compared to the others because others are centrally controlled. So, someone has the responsibility to actually migrate. Of course, crypto decentralization means there is more challenge to it.

Now, this is a privacy conference. So, of course, for privacy, what does it mean? So every chain has you know there are privacy protocols on them. Rail gun, Aztec its own L2 chain privacy pool all these privacy protocols have the same vulnerability from source algorithm and sufficient quantum computer. But beyond that there is also a unique vulnerability that privacy protocol has is deanonymization because even if you can safely move your assets to a quantum safe wallets in future but all the past information people are basically harvesting today and that means they can actually deanmize that and make it public tomorrow.

So yeah this is uh you you can you can basically save your funds but you are getting the anonymized. So in in here the quantum itself is not the problem. We have actually enough uh standards for postquantum cryptography schemas that are well established that has been there for many years and there also reference implementation and Ethereum itself is aggressively moving towards postquantum um world it's it's very aggressive it's all happening but the biggest challenge is how do you get users to migrate so what's the migration clock here. So one of the things that I did some research on to find out what others are doing. So when you look at different states like US has an aggressive NSA itself has an aggressive timeline but if you have seen the recent development um in June um President Trump uh did a executive order that basically set a timeline for the federal government to go to postquantum solution by 2031.

This is actually after the uh Google paper in March. So it's a reaction to that but the thing is uh it has we have as a community established that we can actually uh improve on what uh Google said and it's actually 62% improvement on what Google said that means the newer information is that the timeline has to be even still bought ahead of uh 2030 enterprises have already been adopting they have been ahead on this uh for example Cloudflare has two twoird of its traffic going through for postquantum encryption and also uh other enterprises are also adapting. Apple itself has a has a strict target, Google has it. So everyone has a plan. So when you look at ask others like Justin Drake from uh um Ethereum protocol he mentioned that he believes uh there is a chance by 2030 20% chance by 2030 that there will be sufficient force quantum solution that basically or quantum computer with the shores algorithm that can break ECC and then by 23 his prediction is 50% Obviously standards are coming up.

But the biggest paradox is people who lost their key what they do. What happens to the 4 million Bitcoin that have been supposedly lost? That includes Satoshi's Bitcoin. What happened to all those What happens to all those Ethereum ETH that has been uh those those have lost keys? So now it comes to you.

What you do if you are a builder? Pick a schema. Make sure you start building planning for postquantum from today. You look at references like for example Ethereum's uh uh account abstraction gives you a very good uh way to implement your own signature schema. So you can actually use that to have a postquantum signature schema.

If you're a holder, audit your wallet, check if it's safe or not. Especially if you have uh Bitcoin, you there is still Bitcoin uh all the values etc. these are all already postquantum safe at rest but Bitcoin network itself is not postquantum. or at least these wallets provide postquantum at rest. And then if you are investor, make sure you talk to your portfolio company.

Ask them what are they doing towards this initiative. Myself what I'm doing I am doing two projects. One is a postquantum valot that's Clark. Other one is uh is privacy protocol that's basically postquantum and crosschain. So you have the links to these two clark.

io and thei.io. So you can go there and then it's it's in pre pre- audit in alpha but it's already live on uh some mainets. So the clock is already live in arbitum and base and theta is live in arbitum. So the cotm mast the cm math cost math flipped this year.

Governments and enterprises are already moving towards migration. So the only expensive thing you can do now is wait. Thank you. Any questions? Yeah.

So for the for the valids the migration path is to adopt postquantum schema. Um so cryptography schema like spin falcon. Falcon is something that's uh not yet in N uh uh list but it's basically coming through. So there are multiple uh schemas that have been approved and you can use one of them. Spinx is one of the chosen option for even uh even uh uh Ethereum.

So Ethereum is also planning to use lean spin spin uh lean on and spin plus. So you can choose one of them. I'm using actually spin as uh my option spin plus for option but in case of Solana I'm using Falcon because uh Solana has its own challenge because each transaction can only take in um thousand bytes of information. So you need a small enough uh signature schema that can fit into one transaction otherwise you need to have batching transactions. Yes.

Yes. Smart accounts are safe but it's not all smart accounts today. If you are using the smart account I don't think so. Create 2 is also postquantum safe. Um I I need to do some research but I don't think so.

U in essence the underlying infrastructure itself is not postquantum. So uh if you think about um if you if you take any any safe uh or or multi-IG accounts they are the account itself is postquantum safe but the signators are still EOS or your your hardware wallets. So the vulnerability is on the signers not on the account. So the account is safe but the signers if if you know who are the signers it's now public and uh you can basically like run a source algorithm with a sufficient uh quantum computer to break that and uh you can you can if you get two out of three then you you unlock it