By: Neha Naveen’25, Technology Sector Analyst

Introduction
Quantum computations have been predicted to take over many tasks in the computational field, one such task is bitcoin mining. Quantum computing allows the search space of the “golden nonce” to be queried all at once, which is achieved using superposition and entanglement. One very interesting algorithm is Grover’s algorithm, which is a quantum computing technique which is exponentially faster than the classical computing search algorithm. What does this mean for the future? If quantum computers become more readily available to the public, mining with the classical approach will become obsolete, and quantum computing will take over in bitcoin mining.

*An image of quantum computing lab generated by OpenAI’s DALL-E, accessed on April 26, 2024.*

Why Bitcoin?
Bitcoin is the first type of currency that is decentralized, which is arguably one of the most important aspects of the system. It is not controlled by any monetary power, which is what made it particularly popular when it was first introduced to the public during a financial crisis. The decentralization of bitcoin includes a ledger of transactions that is maintained publicly by every node. Transactions are not validated by a central authority and there is no central control over it. And lastly, bitcoins can be created and mined. This is the one that will be focused on in the article

What is the Golden Nonce?

Mining in bitcoin is essentially searching for bit strings, which are called nonces. A nonce is a term for a number that can be used only once. The nonce is a 32-bit random number that is arbitrary, and can only be used once. The mining process of Bitcoin involves “proof-of-work”, which means miners need to find a block hash that can solve the arithmetic puzzle. When they find all possible hashes that solve the puzzle, they win the block.

Golden nonces are the successful nonces which satisfy a condition. In other words, the hash value has to fall within a range. There are two parts of a block, a header and tree data structure. When the nonces in a block header changes, the hash can be easily recomputed. However, if the nonces in the tree structure change, an entire recalculation of the tree is required, and this has a time complexity that is dependent on the height of the tree. This is where quantum computing can help with lowering the time complexity.

Market Impact
Quantum computers are still a work in progress and their entire capabilities have not reached full potential. Studies in the past have shown that re-hashing the tree structure is a tedious task, and the future points to the direction that quantum algorithms such as Grover’s algorithm can contribute to speeding up the process. This is through the use of quantum parallelism to check all possible nonces in superposition at once. The algorithm improves the process by utilizing quantum unstructured search, and the search space is reduced exponentially. In the foreseeable future, it can be predicted that large companies that specialize in Bitcoin mining operations will begin investing in quantum strategies. One such company is Quantum Blockchain Technologies (QBT), a research company based in the UK. They have developed AI powered algorithms that run on such quantum computers, which significantly increases the mining winning probability of bitcoin mining. QBT’s technologies are not dominant in the market, but their patented algorithms can be applied to other quantum computer manufacturers. QBT is projected to not go open-source with its patented algorithms, but is open to joint ventures and licensing for its technologies. Many more upcoming companies are expected to arise similar to QBT as quantum computing grows as a field. Overall, quantum computing has a bright future ahead, and one of its applications might go hand-in-hand with another emerging field, cryptocurrency mining.