Today’s computers encode data into bits – binary digits in one of two definite states, 0 or 1. Any calculation that needs to be performed with the bits is completed one at a time.
Quantum physicists are racing to develop quantum computers, which use the various states of particles to represent quantum bits (qbits). For instance, while a photon spinning horizontally can represent a 0, and a photon spinning vertically can represent a 1, quantum mechanics theorizes that a photon can also exist in a superposition state, where it is spinning horizontally, vertically, and diagonally at the same time. Thus, while a traditional computer can perform only one calculation at a time, a quantum computer can theoretically perform millions of calculations all at once. This begs the question: is this a problem for mining bitcoins?
By way of background, bitcoins are mined by solving complex algorithms that verify transactions. Transactions are recorded on the blockchain (the “ledger”); they are grouped into boxes with a virtual padlock locking them. Bitcoin miners run software on their computers to find the key that opens that padlock. Once found, the key opens the box, verifies the transaction, and the bitcoin miner is awarded blocks of bitcoins. In mining bitcoins, an individual is limited by the processing power of his computer; the faster and more powerful a miner’s computer is, the faster the miner will generate bitcoins. Currently, an individual on an average computer may mine for over a year without ever earning a bitcoin. So, bitcoin miners have begun to form mining pools to join efforts in solving the algorithms and earning bitcoins.
At the risk of getting even more technical, physicists hypothesize that quantum computers capable of implementing an algorithm called Glover’s algorithm may be able to exponentially reduce the processing time needed to mine bitcoins. Consequently, the processing limitations of classical computers, that led to the creation of mining pools, may someday be a thing of the past. Quantum computers do not exist yet, however, so the true implications remain to be seen.