JPMorgan Misleadingly Claims to Have Solved Blockchain’s Quantum Threat, Gets Called Out By Expert
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Jamie Dimon, chairman and CEO of megabank JPMorgan Chase has made some pretty scathing comments about crypto over the years. Even as recently as October, when BTC prices were soaring above USD 60,000 towards a new all-time high, he was still happy to go on the record to denounce crypto’s flagship asset as “worthless.”
Well, the crypto community may be having the last laugh after a prominent blockchain developer threw shade on the company’s latest blockchain-related announcement. Who’s right? Let’s take a look at what’s happened.
JPM’s Grand Claim
On February 17, JPMorgan made a joint announcement with Toshiba and Ciena that they’d built the “first quantum key distribution network used to secure [a] mission-critical blockchain application.” The announcement went on to detail how this quantum key distribution, or QKD network, had secured a mission-critical application running on the JPMorgan proprietary blockchain. It further went on to claim that “QKD is the only solution that has been mathematically proven to defend against a potential quantum computing-based attack, with security guarantees based on the laws of quantum physics.”
For the benefit of readers who may be unfamiliar with the subject matter, the announcement refers to the “quantum threat” facing blockchain security as a result of advances in computing. Blockchain networks use public-key cryptography to secure assets, which is why each address has a public and private key pair.
The cryptography used in blockchain protocols is secure enough to withstand brute-force attacks from the most powerful computers in the world. However, as advances in quantum computing are set to substantially level up computing power, the cryptography securing blockchain wallets may end up becoming compromised.
Of course, it’s possible to perform upgrades, but in a decentralized network with millions of users and no centralized point of control, transactions between accounts that fail to upgrade could still become exposed to brute-force attacks by quantum machines.
JPMorgan’s statement is relevant to this problem because it appears to imply that the company has found a way to secure its own blockchain against quantum attacks.
Expert Speaks Up
Shortly after the firm released its announcement, Johann Polecsak, an expert working at the convergence of blockchain and quantum computing, pointed out a fatal flaw in JPMorgan’s claim in a tweet thread. Polecsak is the co-founder and CTO at QAN, a quantum-resistant layer one blockchain that’s due to launch on mainnet later this year, so it’s fair to say he knows a thing or two about quantum computing and blockchains.
Having read the paper in detail, Mr. Polecsak spotted that the QKD network is used for symmetric encryption, not asymmetric digital signatures like those used in blockchain. In fact, symmetric encryption relies on both parties having a single key to access encrypted data, so it could work in a context where two parties trust one another and are happy to share access. However, blockchain’s asymmetric encryption deployment has given rise to the famous phrase “not your keys, not your crypto.”
Indeed, the introduction of the paper alluded to in the JPMorgan announcement starts out with the sentence: “Quantum Key Distribution is a well-known symmetric key distribution method […].”
So it appears that Polecsak is right in his statement that QKD isn’t actually related to blockchain in any way. In his tweet thread, he also highlights that blockchain’s asymmetric digital signatures are the only part of the overall infrastructure that’s vulnerable to quantum attack and goes on to state that symmetric encryption is a tool used to hide data, not create transparency.
In the end, the issue most likely comes down to the fact that JP Morgan refers to its private implementation of a distributed ledger as a blockchain when the reality is that it couldn’t be further from the open, permissionless ecosystems that currently characterize the blockchain space.
While JPMorgan’s announcement may be interesting to users of its private distributed ledger who are willing to share keys, Polecsak is correct to state that it has nothing to do with blockchain. It seems that while Mr. Dimon may be willing to denounce Bitcoin as “worthless,” he still sees value in appropriating the name of the underlying technology if it helps to get more eyeballs on his firm’s latest press release.
At the time of going to press, nobody from JPMorgan had responded to Johann Polecsak’s thread.
