Microsoft breakthrough signals quantum-exclusive future for blockchain mining
2024-11-29

Microsoft and Atom Computing, a technology firm based in California, recently announced a breakthrough in quantum computing that could pave the way for a proof-of-work transformation in the world of blockchain mining. 
Scientists and engineers from the two companies developed a quantum computing system made up of 24 entangled logical qubits produced by just 80 physical qubits — a feat that sets a new record for the highest number of entangled logical qubits achieved using error correction techniques.
The significance of this scientific breakthrough is in the teams’ achieved efficiency. Previous estimates have indicated that it could take thousands of physical qubits working in tandem to produce a single logical qubit. 
By entangling 24 logical qubits built with a mere 80 qubits total, the frame of reference for both how large these systems can feasibly be scaled, and how soon companies such as Microsoft and Atom Computing will be able to scale them, has shifted significantly. 
Proof-of-work
Analysts have long warned that quantum computers could one day be capable of providing an advantage or quantum speedup when it comes to breaking certain classical data security measures. 
One such measure, SHA-256 encryption, serves as the puzzle that miners on certain blockchain networks, such as the Bitcoin blockchain, must solve in order to demonstrate proof-of-work (PoW).
State-of-the-art blockchain miners, such as the models used by the world’s largest Bitcoin mining facilities, compete to find a hash for a block’s header. To solve the puzzle, they essentially have to guess the hash that meets a target defined by the network’s difficulty. 
Complicating matters, this difficulty adjusts every 2,016 blocks to ensure that new blocks are added to the blockchain roughly every 10 minutes. The result is that it’s become increasingly difficult for classical miners to solve the puzzle. 
Grover’s Algorithm
A theoretical data-mining technique called “Grover’s Algorithm” could be the final nail in classical blockchain mining’s coffin. 
Grover’s Algorithm, which offers quadratic speedup over classical brute-force searches, has been proven in small-scale experiments. However, its application to large-scale problems, such as cracking SHA-256, remains theoretical because the quantum hardware needed to run it at scale hasn’t been developed yet. 
Specifically, as it relates to SHA-256, Grover’s Algorithm would need a quantum computer with hundreds or thousands of error-corrected, logical qubits to function well enough to crack classical encryption algorithms. 
Quantum speedup
While a cursory mathematical extrapolation shows that Grover’s algorithm could reduce the complexity of SHA-256 to approximately half the classical effort, the counterintuitive advantage provided by quantum mechanics — in the form of superposition and interference — adds even greater potential for speedup. Eventually, a cost-benefit analysis could favor investment in quantum systems over classical mining rigs. 
Based on the aforementioned mathematical extrapolation, at around 3,000 logical qubits, quantum mining rigs built on architectures such as the system recently debuted by Microsoft and Atom computing could feasibly overpower the classical mining pool to win blocks at scale. 
Despite the recent advances, it remains unclear when such rigs will be feasible. Analysts have generally indicated a timeframe between 10 and 50 years for error-corrected quantum computing beyond its current limitations. But these predictions are far from scientific, and there’s no current consensus among physicists as to when the next milestones will be reached. 
However, the recently published research from Microsoft and Atom Computing could serve to move the needle significantly toward the present. 
Per Atom Computing’s website, for example, the two firms intend to bring a 1,000-qubit quantum computer to market in 2025. 