Zcash Pushes for Quantum-Resistant Payment Implementation by January Next Year

[Mexico City = Shim Young-jae, Special Correspondent] Privacy-focused digital asset Zcash (ZEC) is pushing to implement payment security technology resistant to quantum computer attacks by January next year. Amid warnings that artificial intelligence (AI) could break the cryptographic systems of Bitcoin and Ethereum wallets faster than expected, the Zcash development team is developing quantum-resistant signatures and wallet privacy technologies simultaneously.

According to a report by CoinDesk on the 9th (local time), the development team of the software Zakura, used for operating the Zcash network and validating transactions, plans to add quantum-resistant signature verification commands by January. Roman Akhtariyev, a Zakura developer, stated, "Our team plans to introduce post-quantum signature commands in January." However, the actual date for network activation has not been confirmed.

Defending Against Public Key Attacks with Quantum-Resistant Signatures

The core of this development is hash-based digital signatures. Existing digital asset wallets approve transactions with a secret key and verify that approval with a public key, relying on the premise that it requires an impractical amount of computational power to reverse-engineer the secret key from the public key.

However, if quantum computers can quickly solve the mathematical problems that protect cryptographic systems, there is a possibility that attackers could find the secret key using the public key or forge transaction approvals.

The method being pursued by the Zakura development team uses a different verification structure than existing public key cryptosystems. Hash-based signatures confirm transaction approvals using a hash, which is a digital fingerprint generated from secret data.

In this method, even if technologies that attack the existing wallet public keys advance, the new signature system will not be automatically compromised. For an attacker to forge a transaction approval, they would need to undermine the security of the hash itself.

Currently, Zcash's general transparent addresses hide the public key behind the hash value. The public key does not directly reveal itself until funds are used from that address. However, once a transaction is executed, the public key is disclosed. If the remaining assets are moved to a new address, they can be protected again with a different key that has not yet been revealed.

The quantum-resistant signatures being developed focus on protecting transaction approval information that is disclosed during the use of funds.

This plan was made public shortly after warnings from Ethereum researchers. According to CoinDesk, Justin Drake, an Ethereum researcher, warned on the 8th that AI could find vulnerabilities in the mathematical cryptographic systems protecting Bitcoin and Ethereum wallets.

Drake claimed that, in the worst-case scenario, mathematical shortcuts needed for an attack could be discovered not in years but within months. He urged digital asset holders to prepare for what he called a 'bunker mode.'

Ethereum has set a goal for a widespread transition to quantum-resistant cryptography by December 2029. However, to date, there have been no proven cases of attacks that have actually compromised the cryptographic keys of Bitcoin or Ethereum wallets.

Following the spread of such warnings on X (formerly Twitter), the price of ZEC also fell. According to CoinDesk, ZEC closed at approximately $1185 on the 8th. It showed a notable weakness among major digital assets, dropping about 11% over the previous week.

70% of Total ZEC in Public Trading Area... Enhancing Balance Inquiry Privacy

Zcash's plan to introduce quantum-resistant technology will initially focus on transparent payments. Zcash supports both shielded payments, which hide transaction information, and transparent payments, which are recorded on a public blockchain.

Shielded payments conceal the sender, recipient, and transaction amount. In contrast, transparent payments, similar to Bitcoin, publicly disclose addresses and transaction amounts on the blockchain.

Analysis of Zcash statistics service ZecStats by CoinDesk revealed that as of the 8th, out of approximately 16.98 million ZEC issued, about 11.96 million were stored in the transparent trading area, accounting for about 70% of the total circulating supply.

The quantum-resistant signature technology being pursued, aimed at protecting assets in the public trading area, is set to be implemented by January. The development team is also working to address privacy issues arising during the balance inquiry process of wallets, not just transaction signatures.

Users who utilize multiple transparent addresses can distribute their assets for storage. However, the process of checking the balance of each address can reveal connections between the addresses. For example, even if a user stores assets across 10 addresses, a typical wallet requests transaction records and balance information for those addresses from the server.

In this process, the server can determine that addresses that appear unrelated on the blockchain belong to the same user.

To prevent this, Zakura is developing Private Information Retrieval (PIR) technology.

PIR is a technology that allows a database to provide the necessary information to a user while ensuring that it cannot determine which record was requested. By applying this, wallets can check balances without sending a list of addresses to the server.

While the transactions themselves remain public as before, this can reduce the problem of exposing information that multiple addresses belong to a single wallet during the balance inquiry process.

An experimental version of this feature is already available through the 'Private queries' setting in the Zcash wallet Vizor.

However, shielded payment areas require separate quantum security measures.

According to Zcash's quantum recovery design document, if an attacker secures the recipient's address, there is a risk that they could store the currently encrypted transaction records and attempt to decrypt them once technology capable of breaking the cryptographic system emerges in the future. This involves encrypting current transactions for storage and later decrypting them with future technology.

Therefore, even if quantum-resistant signatures are introduced for public transactions, it does not mean that all encrypted information in shielded transactions becomes secure. Zakura's January development plans also target the public trading area, and separate security work for shielded transactions remains to be done.

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