Researchers from Shanghai University announced they successfully breached key encryption algorithms with a quantum computer, potentially affecting the security of cryptocurrencies and banking transactions.

Breakthrough in Quantum Technology

The team, led by Wang Chao, used a quantum computer by Canada's D-Wave Systems. They employed quantum annealing to optimize and find the lowest energy state in encryption algorithms such as Present, Gift-64, and Rectangle.

Mechanism of Quantum Annealing

Quantum computers utilize quantum tunneling, allowing them to traverse encryption barriers more efficiently. Particles can pass through obstacles instead of bypassing them, enabling quicker solutions than traditional methods.

Future and Precautionary Measures

While the breakthrough does not present an immediate threat, there is a significant possibility that quantum computers may reach the capability to breach more complex algorithms. Vitalik Buterin suggested that blockchains could protect themselves through a 'hard fork,' requiring users to update their wallets.

The research underscores the necessity of preparing for future quantum threats. The race to develop quantum-resistant encryption standards has officially started.