Can Google's New Computer Destroy the Bitcoin Network?
I asked Grok...
To Investors,
Last week there was a press cycle about Google’s announcement of its Willow quantum computing chip. The hype was generally about how Google has developed the capability to solve complex problems through quantum computing, referencing a problem the company solved in five minutes - where it would have taken a classic supercomputer 10 septillion years.
Quoting a Youtube video from AI Revolution: Google used the Random Circuit Sampling (RCS) test - a challenging computation that checks whether a quantum system can outperform a classical one.
Some went on to speculate that this would mean that existing cryptography standards would be easy to decipher (i.e. that current security standards need to be upgraded) and specifically the current bitcoin protocol is potentially at risk because a quantum computer could theoretically reverse engineer someone’s public keys and access their private keys, giving the “hacker” access to that person’s bitcoin.
I have the most basic level of understanding about quantum computing so I asked xAI’s Grok to explain what this new breakthrough from Google means for bitcoin:
The new discoveries in quantum computing by Google, specifically with their "Willow" chip, have sparked discussions about the potential implications for Bitcoin's security. Here's an explanation in simple terms:
Current State: Bitcoin's security relies on cryptographic algorithms like SHA-256 for mining and ECDSA (Elliptic Curve Digital Signature Algorithm) for securing transactions. These are currently safe against classical computers.
Quantum Threat: Quantum computers, like Google's Willow chip, could theoretically break these algorithms using quantum algorithms such as Shor's or Grover's algorithms. Shor's algorithm could compromise ECDSA by finding private keys from public keys very quickly, and Grover's could make mining easier by speeding up hash function calculations.
Specifics of Willow: The Willow chip has 105 qubits and has made significant strides in error correction, but it's not nearly at the scale required to pose an immediate threat. Estimates suggest that millions or even billions of qubits would be needed to break Bitcoin's current encryption in a practical timeframe.
Long-Term Concerns: If quantum computers continue to advance, they might reach the capability to decrypt Bitcoin's security measures in the future. This could happen in several years (some estimates suggest 5-10 years or more), but not with current technology.
Bitcoin's Defense: Bitcoin isn't without recourse. If quantum computing becomes a real threat, Bitcoin could undergo a "hard fork" to transition to quantum-resistant cryptography. This means changing the underlying algorithms to ones that are secure against quantum attacks. The community and developers are aware of this potential and have discussed plans for such an upgrade.
Market Reaction: While there's been some fear, the immediate market reaction hasn't been significantly negative, suggesting that the threat is perceived as distant. Also, if quantum computing was a real concern, it would likely affect more than just Bitcoin, impacting all systems relying on similar cryptographic standards.
Keith Rabois commented that technically this “problem” that Google claims to have solved would be impossible to prove without a quantum computer anyway, therefore Google could be lying.
I also found this interesting thread on X from Ole Lehman who runs a popular AI newsletter.
In the thread, Ole mentions that firstly we shouldn't really worry because Google’s Willow helped solve one specific problem - meaning it's not certain that their quantum computer has any real capabilities beyond that problem they claimed to have solved.
Secondly, Ole mentions that the bitcoin network is ready for such computing developments because Satoshi mentioned this in a post 13 years ago, see the screenshot below:
It's still really early to tell if there’s anything to be taken seriously about Willow.
The video I referenced at the beginning from AI Revolution also explains that Google’s “breakthrough” doesn't have any real world capabilities and that the next big step would be to prove that quantum computing can solve real world problems such as creating better EV batteries or accelerating developments in nuclear fusion energy.
Again, it all may just be a nothing burger for now.
Either way, there’s a lot that I have to learn before I could ever make an informed opinion in my own words regarding quantum computing, its capabilities, and its impact on bitcoin. But I’m paying attention to comments from people that are in the arena.
I’m also trusting industry participants to continue to make the bitcoin network safe and secure, together.
Remember that the bitcoin network has always undergone improvements over the years - one of the most impactful being when a Lightning layer was added to enable instant and near-free transactions over the bitcoin network.
It will be interesting to see how all of this develops, and I encourage people to read reactions from actual industry participants, and to be wary of the news that the mainstream media produces in reaction to quantum computing, Willow, and Google.
I hope you enjoyed reading this letter.
On my journey to becoming a master capital allocator, one lesson down, a billion more to go.
Hope you all have a great day
-Mansa