Cryptocurrency Market Stalls As Horizon Fades
The cryptocurrency market appears to have stalled out in the wake of several fundamentals that failed to deliver. Bakkt’s weak BTC futures debut and the withdrawal of VanEck SolidX’s ETF proposal both adversely affected the market, and today’s slump is a direct result.
Investors and traders look to impending fundamental factors as price drivers. In their absence, traders only have charts upon which to rely, and it goes without saying that BTC’s chart hasn’t painted the prettiest picture in recent weeks.
Additionally, the BTC hash rate flash crash didn’t do anything to assuage investor concerns that the Bitcoin network is both secure and stable. At the time of writing, BTC appears to have stabilized (for the moment) above $8,200.
Without any fundamental price drivers in the immediate horizon, the next milestone to look to is the May 2020 halving. Currently, it appears that all of Crypto Twitter is expected a drop to the $6K range, if not lower. While there is, without a doubt, every possibility a sizable decline will occur, we’re not entirely sold.
The BTC halving is approaching, and quickly. Getting in position to take advantage of the presumed price run leading to BTC’s quadrennial event will be the modus operandi of every intelligent trader in the market.
Given that, we won’t be surprised to see BTC find a price floor above the catastrophic lows being predicted.
Will quantum computing break crypto?
A requisite ability in any cryptocurrency investor’s skillset is that of reading seemingly disconnected events for the ways they may be relevant now, or in the future. Case in point – today, Google reached its “quantum supremacy” milestone, meaning the company’s rudimentary quantum computer outperformed a traditional one.
In a nutshell, quantum computers can easily run through impossibly sophisticated computations in the blink of an eye. Whereas a cluster of some of today’s best computers may take months, to complete a complex calculation, quantum computers will do them in seconds.
What has that got to do with crypto?
Bitcoin, Ethereum, and the rest are cryptographically encrypted digital assets. Their security is guaranteed by the difficult calculations required to append transactions to the blockchain (via mining). However, a quantum computer, in theory, can easily power through the calculations which cryptographically secure digital assets today. In essence, quantum computers can potentially break blockchains.
In response, blockchain architects are generally doing one of two things:
1. Researching and deploying quantum-resistant cryptography as quickly as possible.
2. Deploying quantum-based blockchains which play nice with their computer counterparts. This prospect has been thoroughly researched https://arxiv.org/pdf/1804.05979.pdf, but can’t be undertaken until quantum computing is established, stable, and well understood.
Concerns over how the rise of quantum computing may affect Bitcoin are well-founded but early. Google and IBM have both progressed much faster than anticipated, though their prototypes have a very long way to go before posing a threat to Bitcoin or blockchain generally.
Technologies also grow in tandem. As progress is made in the quantum computing arena, there will be trickle-down and cross pollination to other sectors – like blockchain.
Back in 2013, Ethereum founder Vitalik Buterin tried to get funding to build a quantum computer himself. More recently, he suggested quantum-resistant Lamport Signatures as a way to future proof blockchains. For additional reading on the subject, we suggest the following research paper titled “Bitcoin and Quantum Computing” – https://arxiv.org/pdf/1711.04235.pdf.
