By Ibrahim Kuyumcu, BSc Molecular Genetics at King’s College London & Founder of Kirk Quantum
- Published as part of our ‘Deep Dive’ Section, promoting in-depth pieces which analyse underrepresented issues and challenge conventional narratives.
Competition breeds innovation, and a new global technological chapter is arriving amidst this century’s arms race between superpowers of the new East and West. The change stirred by computing innovation is transforming emerging markets and the financial world, with expectancy bolstered by the keen initiative of conglomerates and governments, heavily investing for technological and market dominance.
Last August, the US Congress’s CHIPS and Science Act designated $200 billion into researching computer-related and quantum technologies, seeking to curb China’s robust quantum marketplace and crush Western-allied manufacturer dependency on imported quantum chips by issuing sanctions. In its Digital Strategy for Defence, the UK Ministry of Defence also argued that access to and exploitation of information is becoming vital to securing military advantage. The World Economic Forum released a report on the topic of Quantum last September, encouraging both businesses and governments to further accelerate Quantum innovation on top of their existing $35.5 billion investment, laying out guidelines for future market structures.
What is Quantum Computing?
Quantum computers (QC) utilise the laws of quantum mechanics to generate exponentially higher performance which would otherwise be impossible, performing specific forms of calculations normally done by supercomputers and making major breakthroughs across several end markets attainable. QC can crack the Rivest–Shamir–Adleman (RSA) and Elliptic Curve Cryptography (ECC) public-key cryptosystems which are widely used for secure data transmission, such as on the internet. A powerful enough QC can utilise Shor’s Algorithm, a mathematical concept that can break passed RSA and ECC encryption keys which are now considered ‘classical’.
Encryption keys apply mathematical formulae to messages which are then transposed, so only the authorised person can see view it. The difficulty of reverting the mathematical transposition without the key determines how safe messages are. RSA relies on factoring numbers to reach prime numbers. Multiplying two large enough prime numbers and factoring it using a classical computer on a 4096-bit key to calculate those two prime numbers would take longer than the current age of the universe. But a large enough QC can perform such astronomical calculations. These calculation abilities can be applied to a variety of natural sciences research areas such as plasma physics, specifically the emerging fusion and fission nuclear industries.
QC is years, if not decades away from broad commercial use. Nevertheless, it has advanced quickly with companies like IBM, Quantinuum and IonQ publishing more aggressive product road maps. There has been significant interest initiated by banks such as J.P. Morgan in using QC for financial analytics such as index tracking, portfolio optimisation, options pricing and other experimental work while the US and Chinese governments have shown interest in its potential technological and military applications. Thus, speed of growing government, academic and corporate research breakthroughs in this field will soon leave classical security system users vulnerable to attack globally.
The Implications of QC on Financial Services
- Institutional finance firms e.g., banks will be able to decipher stochastic trends before the fluctuations on exchanges occur.
- Post-quantum cryptography will require extremely well-funded malign actors to be able to hack sensitive data held by institutions.
- Cryptocurrencies will eventually be fully decrypted by Quantum-capable institutes, paving the way for a post-quantum cryptographic era.
- Quantum technologies are an emerging elite asset class, having a definite role in completely replacing classical computers within a century.
- The finance industry will adapt only as the necessary changes come about and do so by strategically utilising greater resources such as professionals from the STEM fields.
- Robust markets currently emerging from this quantum singularity will have an unpredictable effect on current markets with institutions having to change their financial and technological strategy accordingly.
Progress of the Private Sector on Quantum
The private sector has been bolstering its quantum drive in the last couple of months. ColdQuanta, a company harnessing theory, manufacturing and integration of quantum technologies, has agreed to establish a new QC Technology Facility in Melbourne with Australia’s government arm, Breakthrough Victoria. Furthermore, the German Aerospace Center (DLR) recently awarded $208M in contracts to five different sub-projects for Quantum technology development, including a British start-up called Universal Quantum – a potential competitor to Google which aims to build the first ever million-qubit quantum computer; a device able to utilise Shor’s Algorithm to penetrate classical systems.
Last September, Accenture and QC company IonQ announced a partnership to bring consulting of QC to clients globally. Conglomerate powers like Alphabet Inc., Amazon Inc., Honeywell Inc., IBM, and Intel are the private sector leaders in building quantum machines and algorithms as well as resourcing further research. The market is already boasting plans of a post-quantum era. Thus, there is little likelihood of a Quantum Winter, as there was for AI in the 1980s.
A post-quantum, specifically quantum-cryptographic world should be expected to be founded on sustainability, given Ethereum’s recent Merge dropping worldwide electricity consumption by 0.2% after going green. The exponentially higher power of QC must be factored in to prevent the volatility of transitioning.
Much untapped potential is almost within grasp, and the first to truly achieve quantum supremacy will have both great power and likely great danger posed to them due to the nature of this incoming singularity.
Thanks for the informations! we will use this to expand our dataset collections