A common criticism of Google’s “quantum supremacy” obsession—its determination to perform a stunt-like feat of mathematics on a quantum computer that stumps all classical computers, as Google has just claimed to have shown (see the Nature paper)—is that it’s not terribly useful. Sure, the demonstration helps put to rest skeptics’ doubt about quantum computing’s power and potential. But the utility of a supremacy display, critics counter, ends there.
The naysaying lot may be surprised to learn of a rather unusual near-term possibility that has mostly escaped people’s notice. Oddly enough, the application involves…cryptocurrency. (And no, I’m not talking about cracking Bitcoin’s encryption code, as democratic presidential contender Andrew Yang might have us believe. That possibility is at least a decade away, and probably longer, by most scientists’ estimates.)
Specifically, Google’s research could lead to improvements in the technology behind so-called proof-of-stake cryptocurrencies, an increasingly popular mechanism for securing digital coins. Proof-of-stake entails randomly selecting so-called nodes on a network to validate batches of cryptocurrency transactions—literally putting the “blocks” on a blockchain. Some cryptocoins, such as Tezos, NEO, Dash, and EOS, use some form of proof-of-stake technology today; Ethereum developers have long discussed their intention to adopt the tech, eventually.
But how can one be absolutely certain that supposedly random selections are truly random? Indeed, how can one ensure attackers cannot subvert the lottery system, insert themselves into a privileged position on a network, and reap unfair rewards? (Block validators tend win a chunk of cryptocurrency for their “staking” efforts.)
Scott Aaronson, a quantum theoretician at the University of Texas at Austin who peer reviewed Google’s quantum supremacy paper, sees a possible answer to those questions in quantum computing. Aaronson has posited that a quantum supremacy demonstration like Google’s could be adapted to generate certifiably random numbers—the kind that might settle the nerves of even hard-nosed skeptics. This is, to use a gambling analogy, the equivalent of being able to prove that the dice aren’t loaded, or that the roulette wheel in a casino doesn’t favor certain numbers (and, say, the house).
“This is not something I ever thought I’d be doing in my career,” Aaronson tells Fortune, referring to the potential cryptocurrency applications of his research. (He alluded to the possibility in his characteristically wonky, yet insightful, personal blog last month.)
Not everyone is convinced that going to such lengths is necessary to assuage doubters, however. Greg Kuperberg, a mathematician at the University of California at Davis, says the idea, while interesting, seems like overkill. He compares using a quantum computer to certify randomness to buying a diamond-studded Rolex to tell time. Certainly, cheaper watches would be just as accurate, he says. “You don’t have to solve the problem in such a fancy way.” (Though, he concedes, “I could be wrong about that and I respect certified randomness as a topic of discussion.”)
Even so, one must appreciate just how essential random numbers are to computer security. Digital privacy depends, fundamentally, on the concept. And in a world where hacking and data breaches run rampant—and where, at a higher level, faith and trust in traditional institutions is at all time lows—certifiable random numbers may indeed be a technology worth pursuing, especially when large sums of money are at stake.
Who wouldn’t welcome a world where no one can claim the system is rigged?
Robert Hackett | @rhhackett | Robert.Hackett@fortune.com
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DECENTRALIZED NEWS
To the Moon…
HTC's Exodus 1S can run a full bitcoin node - the first smartphone ever with that capability built-in. Venmo will launch its first credit card next year in a bid to increase revenue. The Department of Justice tracked bitcoin transactions (and an unconcealed IP address) to shut down a child porn ring and prosecute 337 depraved users.
Rekt…
Digital bank Chime took an unplanned holiday, leaving millions of users without account access. Circle reportedly sold the crypto exchange Poloniex to a group headed by Tron CEO, notorious huckster, and Warren Buffet Lunch AvoiderJustin Sun. China's planned digital currency would be an Orwellian nightmare. Banks could cut ties with Facebook over Libra's risk profile.
FOMO NO MO'
I am personally very unhappy, and feel that the future, regardless of what happens with OneCoin, is not really an exciting one, and nothing to be proud of. I have done many bad things in my life, many stupid things, many things that were borderline. But nothing that [I was this] ashamed of, and it actually destroys part of who I am. The damage is done, I have to somehow live with it. But it is something that really upsets me.
An email allegedly sent by Dr. Ruja Ignatova, the mastermind of the multibillion dollar global pyramid scheme OneCoin. According to new reporting by the excellent BBC podcast The Missing Cryptoqueen, Ignatova's story has an interesting twist: though she had a record of misconduct before starting OneCoin, there is evidence that OneCoin grew much faster than she intended. "She tried to stop OneCoin," according to one commentator who was in touch with insiders. Ignatova has now been missing for two years, and may be in hiding in Russia.
MEMES AND MUMBLES
Blockchains are inherently inefficient, computationally costly systems. They're not worth using except for transactions that cheap centralized payment systems don't want you to make. In other words, Bitcoin is for making transactions The Man is against.
Bloomberg's Joe Wiesenthal, stating the obvious yet somehow controversial. His statements were described as "nonsense & misinformation" by investor Anthony Pompliano, and triggered a broader wave of soul-searching about cryptocurrency's roots in the anti-authoritarian 'cypherpunk' movement. To read more about those roots, and the relationship between fringe politics and blockchain tech, there's no better source than Finn Brunton's magisterial history Digital Cash.
BUBBLE-O-METER
$61 Million
The amount raised so far by Morgan Creek Digital (whose team includes the aforementioned Anthony Pompliano) for its second blockchain-focused venture fund. The organization says it wants to raise a total of $250 million for the fund. According to Pompliano, every institution from Morgan Creek's first fund returned for the second, and two U.S. public pensions more than doubled their investment.
This edition of The Ledger was curated by David Z. Morris. Find past editions here, and sign up for other Fortune newsletters here. Question, suggestion, or feedback? Drop us a line.
