Professor Zhdanov explained the danger of quantum cybercrime: “The prospects are bleak”

– Yuri Nikolaevich, not everyone understands what quantum cybercrime is…

– To put it very simply, computers have appeared that operate on fundamentally different principles than digital ones – quantum mechanisms. Let me remind you that quantum technology is based on complex subatomic principles defined by quantum mechanics. Quantum mechanics is a high-level field of physics that studies the behavior of subatomic particles, which are the basic building blocks of all matter, including atoms. The most important thing: quantum computers carry out any operations thousands of times faster.

– But these are colossal opportunities for humanity. Computing, logistics, forecasting, variations in technology, diagnostics… What is the threat?

– It depends on whose hands the quantum computer is in. An attacker, using a fundamentally new circuit design and operating logic, will be able to hack all currently existing methods of information security. The prospects are bleak: in the coming years, traditional cryptography algorithms, including key distribution, asymmetric encryption, and electronic signatures, will become unsafe and, by and large, useless. In fact, one of the necessary conditions for the use of information technology is lost – ensuring security, that is, the state of confidentiality, integrity and availability of data. Indeed, today most existing products for solving this problem are based on public key cryptography methods. This means that simple math must be done to protect data through encryption. But cryptanalysis requires enormous computing resources. A quantum computer already has similar resources and can crack any code in one go.

– That is, banks and other financial organizations may come under attack, first of all?

– Not only. Here are the areas most vulnerable to quantum threats: personal, financial, medical and genetic data, Internet of things data (including the industrial Internet of things and the Internet of vehicles, blockchain economics data).

At the World Economic Forum in Davos, held from January 15 to 19, IBM general manager for Europe, the Middle East and Africa, Ana Paula Assis, urged governments to consider the potential risks associated with progress in quantum computing, as they could be extremely destabilizing. She confirmed that quantum computers capable of parallel computing make existing encryption systems obsolete. Assis stressed that if the potential threats posed by quantum computing are not quickly addressed, the world is not prepared for the chaos it could cause as it would lead to Armageddon for cybersecurity.

– Did you agree with her?

– Yes, and many. For example, Jack Hydari, CEO of SandboxAQ, noted that many companies pushing for quantum computing are unprepared for such machines and unable to cope with the disruption they cause. According to him, as outlined in a Bloomberg publication, most companies do not yet have a clear plan for using AI and quantum technologies to solve key problems.

Hidari also warned of a potential disaster that was already unfolding. He estimates that banks will need at least eight to ten years to fully transition to post-quantum protocols, while large-scale quantum computers will become available by 2029 or 2030. Thus, everything that uses encryption systems, from e-commerce to online banking, will be at great risk.

But I still agree that quantum computing is most important for the financial sector today.

– Why?

– They create the opportunity to gain competitive advantage in many areas. The significance of these opportunities is underscored by robust investments in quantum innovation, projected to grow from $80 million in 2022 to $19 billion in 2032 and potentially reaching $850 billion over the next 30 years. “Quantum computing presents significant opportunities, but also threats. The financial sector relies heavily on encryption to protect sensitive information, the disclosure of which could cause significant harm to consumers and markets. Addressing this challenge requires a truly collaborative effort to move towards a quantum security future,” said Suman Ziyaullah, Head of Technology Resilience and Cybersecurity at the Financial Conduct Authority.

– That is, money is invested not in the development of quantum technologies itself, but in protection against them?

– It turns out so. And addressing cybersecurity risks using quantum technologies in the financial sector and beyond is challenging. This goes beyond technological adaptation and requires a rethink of the cryptographic protocols that provide the basis for security. This process is further complicated by the uncertainty of the timing of quantum advances and the readiness for quantum-resistant technologies. In many countries, the public and private sectors are taking initiatives.

For example, the US is setting a quantum security milestone of 2035, and its National Institute of Standards and Technology (NIST) is leading the way in developing standards and guidelines for post-quantum cryptography solutions by 2024. True, there is, alas, no real international action plan for the implementation of global and coordinated regulatory approaches.

Indeed, the need for a coordinated approach prompted an international dialogue at the World Economic Forum, in collaboration with the Financial Conduct Authority (FCA), bringing together financial regulators and central banks from around the world, industry leaders and academic experts.

“The era of the quantum economy is fast approaching, and we need a global public-private approach to address the complexities it poses. We welcome this opportunity to work with the Financial Conduct Authority to develop a roadmap for a smooth and secure transition of the financial services sector to the quantum economy,” said Sebastian Bacoup, Head of Networks and Partnerships, Member of the Executive Committee of the World Economic Forum.

– Did you decide anything specifically?

– Created a joint so-called “white paper” – “Quantum security for the financial sector: informing global regulatory approaches.”

The book presents four guiding principles along with a roadmap that serves as a blueprint for reducing complexity and aligning different entities throughout the transition to a quantum security-based economy.

– What are the principles?

– The first principle is reuse and repurposing. It encourages the use of existing tools and frameworks to address cybersecurity risks associated with the use of quantum technologies.

The second principle is to establish non-negotiable terms. This is a call for defining the comprehensive requirements that are needed to address quantum security issues.

Third, fragmentation should be avoided. The focus here is on a global approach to avoid fragmentation of regulation across different markets.

And the fourth is increasing transparency. This is a call to share strategies and approaches to enable the transition to quantum security.

Overall, the transition to a quantum security-based economy is not just a technological shift, but a comprehensive transformation of the financial sector’s approach to stakeholder collaboration, cryptographic governance and cybersecurity. This transition is not a race, but a strategic journey that requires sustained international cooperation.

– If this is a journey, then there should be a road map?

– It is spelled out in the white paper and consists of four separate stages: preparation, leadership, transition and monitoring. Preparation: Focus on raising awareness of quantum risks and building internal capacity. That is, to improve understanding and approaches to the transition to quantum security. Guidance: Proposed to move beyond preparation to proactively shape transition strategies and develop global best practices. Transition and monitoring: this is about the implementation of strategies developed in earlier stages of transition from adaptation to innovative actions.

– How are things going with quantum technologies in Russia?

– Like many other countries, we are at the beginning of our journey. At the moment, our country’s indicators (especially in terms of the share of articles and patents) are quite modest, but the country also has a development roadmap “Quantum Technologies”, presented at the end of 2019, and it is gradually being implemented.

Some funds for “quantum” development will be allocated as part of other projects. Thus, the road map “Modern and advanced mobile communication networks” involves the allocation of funds for research and development on the coupling of quantum and post-quantum cryptography with signal-code structures in 5G Advanced/6G radio access networks.

According to a number of formal indicators, we are still inferior to the “Big Three” – the USA, China, and the European Union. And even after the start of the SVO, the development of quantum technologies (as well as any other) in Russia became difficult – scientific ties were severed, the purchase of equipment for quantum computers is considered by the US authorities to be on a par with the purchase of real ammunition, and organizations engaged in quantum research are subject to sanctions no worse than defense enterprises. But progress cannot be stopped.

– Do we have our own developments?

– Let’s start with the fact that it is our scientists who are at the origins of the quantum revolution. In 1954, Soviet scientists Nikolai Basov and Alexander Prokhorov developed the first microwave generator – a laser, where ammonia served as the active medium. A laser is essentially a device for controlling the flow of photons. Using quantum technologies, tomographs and ultra-sensitive microscopes were then created.

And now – in May 2022, scientists from the Russian Quantum Center (RCC) have patented a new quantum processor architecture that will increase the power of the ion quantum computer, which was developed at the end of 2021. Only three countries have similar developments: the USA, China and Austria. Another invention is a new method for creating quantum entanglement, proposed by researchers from MISiS.

In fact, the list of such achievements could go on for a long time. One way or another, we will not be outsiders.