Will Cryptocurrency Face a Quantum Computing Problem?

“If current progress continues, quantum computers will be able to crack public key cryptography,” writes CNET, “potentially creating a serious threat to the crypto world, where some currencies are valued at hundreds of billions of dollars.” If encryption is broken, attackers can impersonate the legitimate owners of cryptocurrency, NFTs or other such digital assets.

“Once quantum computing becomes powerful enough, then essentially all the security guarantees will go out of the window,” Dawn Song, a computer security entrepreneur and professor at the University of California, Berkeley, told the Collective[i] Forecast forum in October. “When public key cryptography is broken, users could be losing their funds and the whole system will break….”

“We expect that within a few years, sufficiently powerful computers will be available” for cracking blockchains open, said Nir Minerbi, CEO of quantum software maker Classiq Technologies. The good news for cryptocurrency fans is the quantum computing problem can be fixed by adopting the same post-quantum cryptography technology that the computing industry already has begun developing.

The U.S. government’s National Institute of Standards and Technology, trying to get ahead of the problem, is several years into a careful process to find quantum-proof cryptography algorithms with involvement from researchers around the globe. Indeed, several cryptocurrency and blockchain efforts are actively working on quantum resistant software…

A problem with the post-quantum cryptography algorithms under consideration so far, though, is that they generally need longer numeric encryption keys and longer processing times, says Peter Chapman, CEO of quantum computer maker IonQ. That could substantially increase the amount of computing horsepower needed to house blockchains.

The real quantum test for cryptocurrencies will be governance structures, not technologies, says Hunter Jensen, chief technology officer of Permission.io, a company using cryptocurrency for a targeted advertising system… “It will be the truly decentralized currencies which will get hit if their communities are too slow and disorganized to act,” said Andersen Cheng, chief executive at Post Quantum, a London based company that sells post-quantum encryption technology.

A quantum attack algorithm permutes and combines the wave functions of the qbits in a way to arrive at the right answer being the most likely. Run it a few times and the most likely answer will be the most common.

We know of two primary algorithms, Shor’s and Grover’s. Grovers reduces the complexity of a dictionary lookup to the square root of the normal complexity. So effectively halves the key size. Shor’s solved the dlog and factoring problem efficiently breaking RSA and ECC public key systems.

The approaches to making post quantum secure algorithms for Grover is to increase the key size. The approach for public key systems involves coming up with new public key systems based on other mathematics for which you can show there is no permutation or combination of the qbit wave functions that will yield and answer.

That part is a solved problem and there are many such algorithms, however the other problem is you have to show that your quantum secure algorithm is also secure from conventional cryptanalysis and this is where many promising algorithms (E.G. ones without ridiculous key sizes) have failed. The others will never make it anyway because they require silly amounts of data to be sent back and forth. Check out the NIST post quantum cryptography contenders for the current leaders in the pack.

Ignore any idiot telling you to just double encrypt – it doesn’t solve the public key problem and a block cipher is a bijective mapping. A bijective mapping applied to another bijective mapping is just another bijective mapping which will not upset Grover’s algorithm much. The problem space is in the realm of public key cryptography.

Source: Will Cryptocurrency Face a Quantum Computing Problem? – Slashdot

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A Tiny Cryptocurrency Called Omicron Is Suddenly Rocketing Even As The New Covid-19 Variant Tanks The Bitcoin Price And Crypto Markets

A new, fast-spreading Covid-19 variant dubbed omicron has sent bitcoin, cryptocurrency and traditional markets into meltdown this week, with investors being warned to “be on guard.”

The bitcoin price lost more than 5% in a matter of hours this week, taking its decline from all-time highs of around $69,000 per bitcoin to 20% and plunging bitcoin into a technical bear market that’s wiped billions of dollars from the combined cryptocurrency market capitalization.

However, the price of one tiny cryptocurrency, coincidently named omicron, is suddenly soaring, adding around 500% in the days since the World Health Organization named the new Covid-19 variant—recalling the sudden rise and fall of a scam Squid Game-inspired cryptocurrency last month.

The bubbly cryptocurrency market—that can mean even larger and more established coins regularly record sudden, double-digit percentage gains and losses—often sees tiny cryptocurrencies rocket in value only to collapse a short time later.

Last month, an amateurish crypto project inspired by the viral Squid Game TV show but unaffiliated with it or Netflix NFLX +1.1%, saw its squid cryptocurrency add many thousands of percent before crashing back to almost nothing.

This year, a torrent of meme-based cryptocurrencies, led by dogecoin and its biggest rival shiba inu, have rocketed up the cryptocurrency price charts as traders bet hype helped on by the likes of Tesla billionaire Elon Musk will translate to longer-term value.

The price of omicron’s omic coin has soared from around $50 to almost $400 in the last few days, as measured by cryptocurrency price data tracker CoinGecko. Despite its surge, neither CoinGecko nor the Crypto.com bitcoin and crypto exchange have enough data on omicron to give it a market capitalization.

Omicron, described as “a decentralized treasury-backed currency protocol” built on ethereum scaling technology Arbitrum and launched just weeks ago, can only be traded on the controversial decentralized exchange SushiSwap. Such exchanges, whose decentralized nature means there isn’t a central authority in charge, are known to be often hit by hacks, exploits and so-called rug pulls that see users funds stolen.

Meanwhile, bitcoin and crypto market watchers are broadly upbeat despite the new Covid-19 variant sending the bitcoin price into meltdown this week.

“The news of a new Covid variant coming out of South Africa led to a broad-based sell-off across asset classes,” Martha Reyes, head of research at digital asset prime brokerage and exchange Bequant, said in emailed comments. “If lockdowns do ensue, which is not our base case scenario, that will lead to further helicopter money, which ultimately benefits digital assets.”

The crypto sell-off this week, which saw the bitcoin price fall in line with traditional markets, surprised some in the crypto industry who are used to crypto prices moving independently of stocks and traditional assets.

“The cryptocurrency market, for the most part, doesn’t correlate with the traditional markets,” Tally Greenberg, head of business development at blockchain company Allnodes, said in emailed comments.

“However, there come times when even cryptocurrency follows world events. The news of a new Covid-19 variant has shaken the world with yet another uncertainty about our global road to recovery, which caused a major dip for large and small cryptocurrencies and plummeting stocks and bonds across all nations.”

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Source: A Tiny Cryptocurrency Called Omicron Is Suddenly Rocketing—Even As The New Covid-19 Variant Tanks The Bitcoin Price And Crypto Markets

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“Out in the Open: Teenage Hacker Transforms Web Into One Giant Bitcoin Network”. Wired.com. Retrieved July 24, 2017.

What Every Crypto Buyer Should Know About OpenSea, The King Of The NFT Market

Startups are supposed to specialize, but OpenSea’s founders thrived by building a wide-open market for creating and trading all manner of NFTs, whether art, music or gaming. Now that they’re centimillionaires and poised to become billionaires, they have other worries: competitors, fraudsters and the next crypto crash.

In March 2020, as Covid-19 began to spread, OpenSea founders Devin Finzer and Alex Atallah held a gut-check phone call. Their five-person startup had built a platform on which users could create, buy and sell all sorts of nonfungible tokens (NFTs)—computer files used to track ownership of unique digital assets like art and music on a ledger known as a blockchain. Yet 26 months after going live, they had just 4,000 active users doing $1.1 million in transactions a month, which translated (given OpenSea’s 2.5% sales commission) to a paltry $28,000 in monthly revenue.

The NFT market had a “dead feeling,” recalls CTO Atallah, who conducted his side of the call from the basement of his parents’ Colorado home, where he had gone to work as New York locked down. Ominously, Rare Bits, a direct and better-funded competitor, had just announced it was folding. The pair set a do-or-die goal of doubling business by the end of the year—and met it in September.

Finally, in February 2021, the NFT market roused from hibernation—and went crazy. In July, OpenSea processed $350 million in NFT trades. That same month, in a round led by Andreessen Horowitz, it raised $100 million in venture capital at a $1.5 billion valuation. In August, as NFT hype (and FOMO) reached a fever pitch, volume spiked tenfold to $3.4 billion—an $85 million commission windfall for OpenSea in a month when it likely burned less than $5 million on expenses.

Although transactions have since retreated to around $2 billion a month, the platform now has 1.8 million active users and a dominant share of the market. It’s up to 70 employees and is scouting for dozens more, including much-needed customer service reps.

Recently, there’s been talk of another round of venture investment at a valuation that could reach $10 billion. With a 19% ownership stake each, CEO Finzer, 31, and Atallah, 29, are centimillionaires on the cusp of becoming crypto’s newest billionaires.

Yet Atallah was humble as he chatted in November at a restaurant in New York’s kitschy new Margaritaville Resort Times Square, sitting near its 32-foot Statue of Liberty replica, which hoists a cocktail instead of a torch. He was there for the third annual NFT.NYC convention, which boas­ted 5,500 registrants with 3,000 on the waiting list. Young enthusiasts prowled the hotel wearing Bored Ape Yacht Club sweatshirts—a tribute to a collection of 10,000 simian NFTs whose owners treat it as a social club as much as a collectible or investment.

You might say humility was at the heart of Finzer and Atallah’s successful strategy. Some advisors had urged them to specialize in an NFT niche—say, art, gaming or music. But they opted to build a category-agnostic platform because they didn’t think they were prescient enough to predict which NFT types would catch on.

Beyond casting a wide net, Finzer says, OpenSea has thrived simply by “being in the right place at the right time” and listening to users about what they want. The platform tracks NFTs on ethereum and other blockchains, and all purchases are made in crypto. Sellers can opt for a fixed-price or auction format. Artists can reserve a percentage of each resale price. Ultimately, Finzer sees the NFT ownership verification model working for anything from concert tickets to real estate—he’s just not sure what will succeed when. “I’ve always had a pretty gray view of the future,” he says.

Despite its sudden success, OpenSea faces big and varied risks—from fraud and another NFT market bust to new competition. In October, Coinbase, the nation’s largest crypto exchange and an original investor in OpenSea, announced it will launch its own NFT peer-to-peer marketplace. Within weeks, Coinbase had 2.5 million sign-ups for its waiting list, and CEO Brian Armstrong was predicting the new business “could be as bigapproach or bigger” than its core crypto trading business.

OpenSea’s open-market approach heightens the risk of counterfeits, scams and fraud—just ask Amazon or eBay. For example, a scammer can copy an image of someone else’s art and sell it as an NFT on OpenSea. Finzer says the site is working on an automated way to spot fakes and has moderators who investigate suspicious offerings. Still, people can present problems too.

In September, Finzer requested the resignation of OpenSea’s head of product after Twitter users discovered a crypto wallet linked to that executive was buying NFTs shortly before they appeared on the price-moving OpenSea home­page—in other words, he was allegedly frontrunning his own employer’s decisions.

While they come across as humble, OpenSea’s founders are hardly low on ambition. Raised in the Bay Area by a physician mom and a software engineer dad, Finzer says he was “devastated” to be rejected by Harvard, Stanford, Princeton and Yale. (He settled for Brown.) After a short stint as a Pinterest software engineer, he cofounded his first startup, Claimdog, in 2015 and sold it to Credit Karma a year later.

As a kid, Atallah, the Colorado-born son of a Colombian-immigrant father and American mother, made spreadsheets to compare the attributes of everything from birds to brow­sers. After graduating from Stanford, he worked as a programmer before teaming up with Finzer. In January 2018 they entered the Y Combinator startup accelerator with an idea for paying users crypto to share their Wi-Fi hotspots.

But at that point, CryptoKitties—the cartoonish virtual cats whose ownership records were digitally inscribed on the ethereum blockchain—had captured the public imagination. “It was the first time people who didn’t really care about crypto were suddenly getting interested in it for reasons other than flipping a coin. I thought that was really powerful,” Atallah says. They quickly pivoted to OpenSea and later moved their operation to New York City.

Much like Beanie Babies, their cloth-and-stuffing ancestors, CryptoKitties turned out to be duds as investment-grade collectibles—the supply was too great to make most of them worth much. After spiking in early 2018, interest in both crypto and NFTs went into hibernation.

What awakened the market in early 2021 wasn’t OpenSea’s doing. Instead, platforms like the billionaire Winklevoss twins’ Nifty Gateway captured attention with curated, high-quality art. Last March, Christie’s auctioned the NFT for digital artist Beeple’s “Everydays: The First 5000 Days” for $69 million, the third-highest price ever paid for work by a living artist.

As NFTs fetched eye-popping prices, more and more ordinary folks decided they too wanted to become creators, collectors or speculators—and turned to OpenSea, with its anyone-can-be-an-artist ethos, built-in secondary market and handy features. For instance, the site has an advanced filtering system so users can find NFTs with the rarest—and theoretically most valuable—attributes.

(Only 46 Bored Apes have solid-gold fur, and they command a hefty premium.) When a new NFT is created and recorded on ethereum, the site automatically spawns a webpage displaying it—a nice feature as NFTs became a status symbol, with people sharing their OpenSea pages and changing their Twitter profile pictures to an NFT they own. “It became this circular feedback loop, driven by envy and desire. And OpenSea really captured that market,” observes Richard Chen, a partner at VC firm 1Confirmation and an early OpenSea investor.

Dani, 27, a former fashion designer living in Georgia, has turned a $17,000 investment in NFTs like the World of Women into a portfolio worth $715,000. AJ, a 37-year-old former gaming company CEO from North Carolina, put less than $10,000 into NFTs and now values his digital assets at $1.3 million. He recently convinced his gastroenterologist brother to start buying NFTs.

The brother, in turn, hooked his own buddies. “They’re pretty much doing colonoscopies and then checking their phones for new NFT drops,” AJ says. Sounds like a bubble, all right, raising the question of how OpenSea will fare when it bursts. Responds Finzer: “We have a large amount of padding in case we need to weather a winter.”

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Source: What Every Crypto Buyer Should Know About OpenSea, The King Of The NFT Market

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Crypto Price Prediction: Volcanos Could Push Bitcoin To $1 Million In Five Years—Leaving Ethereum, BNB, Solana, Cardano, XRP And Cro In The Dust

Bitcoin and cryptocurrency prices have returned to form in recent months following a summer market lull—and despite some serious warnings.

The bitcoin price hit an all-time high of almost $69,000 per bitcoin in November before falling back. Meanwhile, other major cryptocurrencies have made far greater gains than bitcoin over the last year—including ethereum, Binance’s BNB, solana, cardano, and Ripple’s XRP—pushing the combined crypto market capitalization of highs of $3 trillion.

Now, Samson Mow, chief strategy officer of blockchain technology provider Blockstream, has said he expects El Salvador’s volcano-powered, bitcoin-back bonds to help the bitcoin price climb to $1 million per bitcoin in just five years.

“If bitcoin at the five-year mark reaches $1 million, which I think it will, [El Salvador] will sell bitcoin in two quarters and recoup that $500 million,” said Mow, speaking alongside El Salvador’s president Nayib Bukele at the weekend and explaining how the country could finance its bitcoin bonds, it was reported by Reuters.

“If you get 100 more countries to do these bonds, that’s half of bitcoin’s market cap right there,” said Mow, adding that “game theory” on the bonds gave first issuer El Salvador an advantage and once 10 such bonds were issued, $5 billion in bitcoin would be taken off the market for several years.

“This is going to make El Salvador the financial center of the world,” Mow added.

El Salvador’s so-called “volcano bonds”—designed to fund the building of a new, low tax “bitcoin city,” powered with geothermal energy from a nearby volcano—will be U.S. dollar-denominated 10-year bonds and carry a coupon of 6.5%.

“Invest here and make all the money you want,” Bukele reportedly told attendees of an event closing a week-long promotion of bitcoin in El Salvador and likening his plan to cities founded by Alexander the Great.

However, the world of traditional finance appears to have taken a dim view of El Salvador’s volcano-powered bitcoin bonds, with big-name investors telling the Financial Times the scheme could mean the country has less access to traditional debt markets.

“I don’t know who is going to buy these bonds but it sure as heck isn’t going to be us,” Kevin Daly, a fund manager at Aberdeen Standard Investments, told the FT.

Elsewhere, the International Monetary Fund (IMF), which is reportedly engaged in talks over a $1.3 billion loan agreement with the country, has warned El Salvador its adoption of bitcoin as legal tender will increase financial and consumer risks.

“Given bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability,” IMF staff wrote in a statement related to a mission in the Central American country.

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Source: Crypto Price Prediction: Volcanos Could Push Bitcoin To $1 Million In Five Years—Leaving Ethereum, BNB, Solana, Cardano, XRP And Cro In The Dust

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In Crypto ‘Arms Race’ For Mass Adoption, Companies Ink Sports Deals Worth Hundreds Of Millions

As cryptocurrency companies seek to reach mainstream audiences, some platforms are spending hundreds of millions of dollars to sponsor sports teams, stadiums and even leagues in a bid to woo new fans.

On Sept. 22, Crypto.com struck an eight-figure deal with the Philadelphia 76ers to sponsor the jersey patch and have visibility in the arena. The crypto trading app will also work with team management to develop non-fungible tokens (NFTs) and create a way for fans to use cryptocurrency to pay for tickets and other products. The Hong Kong-based company will also show up elsewhere alongside the NBA franchise—including on TV broadcasts and various other digital platforms.

Crypto.com Chief Marketing Officer Steven Kalifowitz recognizes that in order to build the brand, he has to also educate consumers about this new asset class.

“Crypto is not just another shoe,” he says. “It’s not a commodity thing or a suitcase or something. Getting into crypto is very much a cultural thing.”

Flush with money from eager investors, a growing number of crypto brands are spending big to reach a mass audience through sports sponsorships and mainstream events. Other deals this month include the cryptofinance company XBTO sponsoring the Major League Soccer team Inter Miami, the cryptocurrency exchange FTX sponsoring Mercedes-AMG’s Formula 1 team and the nonprofit Learncrypto.com sponsoring the English Premier League team, Southampton F.C.

Perhaps sports arenas are not a bad way to go when it comes to finding new fans for a new—and still largely unregulated—asset class that some critics dismiss as gambling and proponents say is the future of the internet as well as the economy. And in a fast-growing and cluttered market, the fight is to get not just recognition but market share.

“To me it looks like an arms race for user acquisition,” says Keith Soljacich, VP/GD of Experiential Tech at Digitas, a leading digital advertising agency. “It’s kind of like if you have a crypto wallet on a platform, it’s a lot like holding a Visa card, too.”

The 76ers deal is just one of many that Crypto.com has landed in the past year while it’s on an aggressive sponsorship spree totaling more than $400 million in deals. Earlier this month, the company became the first official crypto platform partner for the famous French soccer team Paris Saint-Germain. Crypto.com is also a sponsor of a wide range of teams including the NHL’s Montreal Canadiens, Fox Sports’ college football midday coverage, UFC, and Aston Martin’s Formula One team—just to name a few. Each of these also includes various other integrations far beyond a logo.

Chris Heck, president of business operations for the 76ers, says the team had been looking for a new jersey patch partner for a couple of years and spoken with hundreds of companies. And because the jersey patch is the most important partnership a team has, it requires brands and teams to be “completely aligned.”

“As the world woke up to the crypto space a little over a year ago, we got a chance to venture down that road,” Heck says. “Think about it this way: Sports are entering into the crypto era world, and we get to the at the front of the line with Crypto.com. These are folks that are partnering with gold-standard brands like UFC, F1, PSG, and we get to be their brand and their of choice in the United States with major sports teams and that’s pretty cool.”

All this to go beyond the current crypto user base to reach the masses: A study Crypto.com conducted in July found that total global crypto users have doubled year-over-year from 106 million to 221 million. However, just a fraction of those are currently the company’s customers.

Earlier in September, FTX—a two-year-old startup that just moved its headquarters from Hong Kong to The Bahamas—announced a $20 million ad campaign starring football legend Tom Brady and his wife, the model and businesswoman Gisele Bündchen. And like Crypto.com, FTX is sponsoring a wide range of teams and leagues in rapid succession including a five-year deal with the Major League Baseball announced this summer.

“If we just stop at one deal and we’ll wait and see how it does and wait to see how that does before doing another one, the best opportunities might be gone,” says FTX.US President Brett Harrison.

According to Harrison, FTX founder and CEO Sam Bankman-Fried asked for ideas of how do something “that’s big.” Someone then came up with the idea to buy the naming rights for a stadium, and a few months later they won the rights to rename the Miami Heat’s arena FTX Arena in a $135 million deal approved in March.

“There is a group of tech companies that know it in their bones that if they don’t become brands quickly, there is a time in the future where there will be just a few left,” says Jamie Shuttlesworth, chief strategy officer of Dentsu Americas, which became FTX’s agency of record in June.

Traditional advertising methods are important for building trust in crypto brands, according to Harrison—especially since it deals with something like taking care of people’s money.

“When’s the last time you saw an ad for maybe a bank pop up on the top of your Google search and said, ‘Time to move all my money from my Chase account or Citi account?’”

Major stadium and team sponsorships are often held by brands that are already well known, but the crypto sector’s aggressive land-grab feels in some ways like strategies in games like “Risk” or “Monopoly”—where people can either wait for the right properties or buy everything they can as fast as possible.

When asked about the Monopoly metaphor, Harrison joked that “we’re trying plant our pieces on as many Park Places as possible.”

There’s plenty incentive for sports organizations to team up with crypto companies. Mike Proulx, a Forester analyst and marketing expert, said many sports leagues want—and need—to attract the next generation of fans.

“These kinds of deals look to tap into crypto companies’ young skewing userbase with NFTs that are, in a way, a modern/virtual take on old school baseball cards,” he says. “And the benefit to crypto companies is, of course, getting to leverage the league IP that legitimizes their platform with trusted brands while also growing their users.”

The crypto industry has exhausted its original market, says to R.A. Farrokhnia, a professor at Columbia Business School professor and Executive Director of the Columbia Fintech Initiative. However, blockchain technology isn’t something that’s easily explained to the average person—it involves cryptography, complex networks, and other concepts—and also still aren’t to a point where users can easily navigate.

According to Farrokhnia, there are still questions about whether the foundations and interfaces are advanced enough to warrant the aggressive push toward mass adoption. Or, he asks, “are we putting the proverbial cart before the horse?”

“These are all the moving parts in this ecosystem and it seems the pace for innovation has accelerated,” he said. “But are we doing things in the right sequence?”

Farrokhnia also points out the irony that despite all of cryptocurrency’s new innovations, the companies are still using classic marketing models. However, he adds that little for athletes to market unregulated digital economies than to pitch things like CPG products or other brand categories.

“What kind of reputation risk could this have for teams or sports figures or influencers or actors who are engaging in this kind of marketing campaign or activity? Most likely they have good lawyers that would protect them against such things, but you never know.”

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Source: In Crypto ‘Arms Race’ For Mass Adoption, Companies Ink Sports Deals Worth Hundreds Of Millions

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More Contents:

Wary of Bitcoin? A guide to some other crypto currencies

Consistency of Proof-of-Stake Blockchains with Concurrent Honest Slot Leaders

Gridcoin: Crypto-Currency using Berkeley Open Infrastructure Network Computing Grid as a Proof Of Work

Vertcoin: The Soaring Cryptocurrency Set to Surpass Bitcoin

Out in the Open: Teenage Hacker Transforms Web Into One Giant Bitcoin Network

Exclusive: Grayscale launches digital-currency fund backed by Silver Lake’s co-founder Hutchins

Crypto social network BitClout arrives with a bevy of high-profile investors — and skeptics

Kodak CEO: Blockchain Significant, Though Not a Doubling in Stock Price

Zcoin Moves Against ASIC Monopoly With Merkle Tree Proof”. Finance Magnates

Big-name investors back effort to build a better Bitcoin

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