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This is the 103rd edition of The Web3 + AI Daily - your definitive guide to the intersection of blockchain and AI! For several days now, the crypto world has been gripped by a degree of unease over AI’s growing ability to solve long-standing math problems, and, by extension, its potential implications for cryptography. Today, I’ll break down the key perspectives to help put these developments into context and hopefully ease some of your concerns.
Thank you for being here! Let’s dive in.
Can AI Break Public-Key Cryptography?
Justin Drake Throwing Web3 into Panic
In last Wednesday’s edition of the newsletter, I published a brief overview of how prepared most blockchains are to face the threats posed by quantum computers, highlighting how AI is being used to strengthen the cryptography we rely on every day. But just hours after publication, AI emerged as a new and potentially greater threat to cryptography. Here’s what happened exactly.
As I alluded to in the article, Justin Drake from the Ethereum Foundation, one of the most respected security researchers in the Web3 space, had hinted that an upcoming announcement would accelerate existing timelines for cryptographic threats. Later that same day, Drake raised the alarm himself.
What he said in short was this:
Don’t panic, but start moving your funds to “fresh” addresses, meaning addresses that have never signed a transaction. With OpenAI‘s recent progress in math and AI’s expanding capabilities, many previously unquestioned hypotheses have fallen, and Elliptic Curve Cryptography can be next.
Drake’s statement sent shock waves through the crypto industry and beyond. StarkWare‘s Eli Ben-Sasson said:
Q-Days [the point when quantum computers become powerful enough to break public-key cryptography] was already a serious threat. Now add AI to the equation. We need to get more serious about post-quantum cryptography for Bitcoin, and Ethereum, and blockchain.
However, as the initial alarm subsided, other researchers weighed in with a more measured assessment, arguing that the threat may not be as imminent as Drake’s remarks initially suggested.
A Danger Could Emerge, But We’re Prepared
Let me start by saying that AI can truly pose a greater threat to crypto than quantum. While quantum computers only endanger Elliptic Curve Cryptography (ECC), AI can potentially break cryptographic schemes that we now consider post-quantum secure, like lattice-based and hash-based signatures.
However, as Dan Boneh, a cryptography professor at Stanford University, said, crypto has always relied on agile software, so if one scheme breaks, we can replace it with another.
No Danger Exists Right Now
The first thing Dan Boneh said on the matter was actually this: “Calm down.”
Boneh directly asked OpenAI and Anthropic whether they had attempted to break any public-key cryptographic schemes used in crypto - the very question that’s fueled speculation across Web3 over the past few days.
The fact that OpenAI reportedly explored more than 300 math problems but no cryptographic ones led some to wonder whether the lab was withholding information about a potential breakthrough, and whether AI models might have already cracked some digital signature schemes. Yet, nothing of the sort have been announced so far.
Until we have answers to these questions, nothing has changed. The world today is the same as the world a week ago, and the world a year ago.
When we learn something new, either we’ll have more confidence in our cryptography [because the AI models would have failed to break it], or we’ll have to react.
To give people more confidence, we have many different types of assumptions that we use to build public-key cryptography. It’s not just elliptic curves or lattices, we also have isogeny-based, code-based systems, multivariate polynomial-based systems, and hash-based signatures. So, if we need to react, we can react. Of course, everything takes time, but we sort of know where to go. Even if the worst of the worst happen, there are still plenty of ways for us to recover.
The Worst-Case Scenario is Still Far-Fetched
In a conversation on the Unchained podcast, ScopeLift‘s Ben DiFrancesco also expressed skepticism about the plausibility of some of the apocalyptic claims:
Even if brute-forcing Elliptic Curve Cryptography (ECC) [deriving a private key from its corresponding public key] became possible, even in a worst-case scenario, it wouldn’t mean that anyone could suddenly read everyone else’s messages overnight.
If some kind of a weakness in the underlying cryptography was discovered that allows that brute forcing to happen, it would still require a long time and enormous amount of compute. And compute is now very expensive.
Even if an attacker could throw massive GPU power at the problem and derive the private key for any address that has signed a transaction, the vast majority of those addresses wouldn’t hold economically worthwhile amounts of funds.
Moreover, as recent developments have shown, closed-source systems could be more vulnerable to AI-driven attacks than open-source ones. That would mean that traditional banks and legacy financial institutions could face greater risks than crypto, where vulnerabilities are scrutinized by a broader community.
Don’t Rush To Migrate Your Funds
Since Drake posted his tweet, experts, commentators, and thought leaders have been repeatedly saying the same thing:
You’re far more likely to lose your funds by rushing a migration and getting it wrong than by having your wallet compromised by AI.
Austin Griffith highlighted another particularly important point:
ECC is crypto, but it’s also HTTPS and the entire internet traffic.
In other words, elliptic-curve cryptography underpins far more than crypto wallets. It also helps secure HTTPS connections and other critical parts of our digital infrastructure. If this cryptographic foundation were compromised at scale, both traditional finance and crypto could be affected, along with the security of internet communications.
Not to scare you, but in that scenario, the bigger problem might not be whether your funds are safe, but whether those funds retain much of their value in a world where trust in the broader financial and digital systems has been severely undermined.
Thank you for reading! I hope you found this article insightful.
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