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This is the 100th edition of The Web3 + AI Daily - your definitive guide to the intersection of blockchain and AI! Today we’re talking about cryptography, the threat quantum computers pose to blockchains and cryptocurrencies, and how AI can be used to mitigate it.
Back in March 2026, a Google research paper stated that quantum computers will be able to break cryptocurrencies’ encryption as early as 2029 - a warning that sent shock waves across the entire Web3 industry. Now, seven months later, (some) crypto companies are actively building towards their post-quantum future, with AI acting as a trusted assistant.
Thank you for being here! Let’s dive in.
Yukon Launches HashSmash to Strengthen Cryptography with AI
Yukon - the open network that Eigen Labs pioneered to bring humans and AI together on hard research problems, is now taking on cryptography. It just unveiled HashSmash - a contest to accelerate cryptographic scientific research using AI, that lists Project Eleven, Shielded Labs, and Zcash as collaborators.
HashSmash will first focus on cryptographic hash functions, testing their resilience against both today’s threats and a post-quantum reality. Why is this important? Because cryptography is not only important for crypto, it is everywhere. As Zcash’s zooko stated:
“Computing, operating systems, every server, and every internet connection - all depend on cryptography, which depends on cryptographic hash functions. And yet, we don’t really know which cryptographic hash functions are secure or how to make them the most secure against future attackers.”
HashSmash invites researchers to examine four of the most important hash functions: SHA-256, SHA-3, Poseidon, and BLAKE3.
Just days before announcing HashSmash, Yukon teamed up with Ethereum Foundation to launch sig.golf and invite participants to design stateless hash-based signatures for post-quantum Ethereum.
Yukon Success Stories
Since its launch in August, Yukon, which turns research into an open multiplayer game for humans and AI, has already recorded several impressive achievements.
Its ECDSA.fail challenge built the best circuit in quantum cryptography, surpassing the breakthrough benchmark set by Google Quantum AI. Here’s what that means in practice:
In March, Google researchers revealed that they optimized Shor's algorithm for cracking public-key cryptography, and successfully broke 256-bit ECC in 18 to 23 minutes. A few months later, Yukon researchers overcame 256-bit ECC with a circuit 47.5 percent more efficient than Google’s.
This is important because, as Circle clarifies, “if ECDSA breaks, any address whose public key has been revealed onchain - which includes every address that has ever sent a transaction - is at risk. A sufficiently powerful quantum computer could derive the private key and drain the assets.”
Hopefully, exposing and stress-testing these attack vectors will help the crypto industry build stronger security before quantum computers become a real-world threat.
Yukon’s Quantum Safe Bitcoin challenge, carried out in cooperation with StarkWare, cut the price of a quantum-safe Bitcoin transaction from $320 to $76.
StarkWare executed the first-ever quantum-safe Bitcoin transaction on mainnet, without changing the protocol - replacing Bitcoin’s signature scheme with a hash-based one. But the transaction came at a staggering cost, which is where Yukon’s researchers stepped in to help.
These examples show that the gap is closing from both ends: quantum computing capability is climbing faster than many people presumed, but at the same time, blockchains are investing in post-quantum readiness and resilience.
How Quantum-Safe Popular Blockchains Really Are?
NEAR’s Head Start in Quantum Security
In a conversation with Laura Shin, Illia Polosukhin stated that NEAR Protocol has a head start in term of quantum resistance compared to other blockchains, thanks to the account design the team chose when they started building the chain. From the outset, NEAR supported both ECDSA and EDDSA, with the expectation that additional signature schemes could be added in the future.
In fact, the first post-quantum signature support, allowing users to hold assets with post-quantum secure key, has already gone live on NEAR’s mainnet. It utilizes the National Institute of Standards and Technology (NIST)-approved ML-DSA-65 (Dilithium) lattice-based signature scheme.
The real challenge before the company now is reaching a social consensus and persuading the rest of the industry to pursue quantum resistance and use the same cryptographic scheme.
"With NEAR Intents connecting to 35 other chains and holding assets on those chains, they need to be post-quantum secure as well, so that we can actually provide the same service to our users."
Crypto Still Hasn’t Decided Which Cryptography to Use
As you’ve probably gathered by now, the industry has yet to agree on which type of post-quantum cryptography blockchains should adopt. Actually, there is a particularly heated debate around the choice between lattice-based and hash-based cryptography - both coming with innate advantages and drawbacks:
“The NIST have standardized three post-quantum digital signature schemes: two are lattice-based - MLGSA and Falcon, and one is hash-based - SPHINCS. These are the three choices the crypto community has. The rest of the world, the non-blockchain world, will use MLGSA. There is no debate there.”
NEAR Protocol favors the lattice-based approach. So does Algorand Technologies.
MLGSA is the only algorithm that enables multi-party computation (MPC), so it is also preferred by hardware wallets like Ledger.
Ethereum is going down the hash-based route, as well as Bitcoin.
However, as Charles Guillemet commented, Ethereum and Bitcoin won’t rely on SPHINCS, but will use another variation of a hash-based scheme. The reason is that SPHINCS produces very large signatures, and it costs a lot to compute and verify them.
In addition, hash-based schemes are very hard to support by hardware wallets and solutions using MPC. Also, protocols relying on them may have to restrict users from doing too many signatures with a specific key or risk losing their funds.
Solana, whose main priority is speed and low latency, will bet on Falcon.
So, all three digital signature algorithms (DSAs) recommended by NIST will be in use, which will inevitably lead to fragmentation and loss of interoperability.
Why is Ethereum Betting on Hash-Based Schemes?
NEAR recently organized a roundtable to explore how quantum computing will affect blockchains and what major networks are doing to prepare. It welcomed NEAR’s Illia Polosukhin and Anton Astafiev, Ledger’s Charles Guillemet, Ethereum Foundation‘s Justin Drake, and the legendary cryptographer Dan Boneh as moderator.
The discussion compared candidate replacements, including lattice-based schemes (ML-DSA, Falcon, Hawk, Raccoon) and hash-based schemes (SLH-DSA/SPHINCS+, SHRINCS). It also highlighted the tradeoffs in signature size, verification cost, and hardware wallet support, and how each ecosystem is approaching the migration.
To be honest, I found the conversation a little too technical at times, but a few quotes from Justin Drake really stuck with me:
Ethereum’s post-quantum plans consist in moving to hash-based cryptography as the rock-solid foundation that will last decades and decades. We’re also combining hash-based cryptography with SNARK-based systems. We’re following the philosophy of Lean Ethereum, so we’re trying to be as simple as possible. [I’m paraphrasing Drake’s words]
“SNARKs are so incredibly powerful that it would become impossible for blockchains not to incorporate them. SNARKs solve scalability, in our [Ethereum’s] context - ZKVMs. SNARKs solve the efficiency of post-quantum. SNARKs solve privacy and all of these other things. So, for us it’s a sunk cost.”
When asked about MLDSA, Drake argued that it is not worth the cost and the risks it poses.
Finally, commenting on Google breaking ECDSA, and ECDSA.fail beating Google’s time by a factor of 2, Drake dropped a major hint:
“There is another result coming soon, which is going to blow the 10 minutes completely out of the water. I think this new result is going to wake up the world, including the Bitcoiners, and move the timelines forward yet again.”
The Migration Will Be the Real Hurdle
At the end of the day, it doesn’t matter which cryptographic algorithms blockchains choose. Regular crypto users like you and me don’t care about signature schemes - we care about the safety of our funds. When the time comes, most blockchain users probably won’t even know that a migration is happening. And that is what we should be worried about.
Crypto has always had a communication problem, especially when it comes to users who aren’t particularly seasoned or technically savvy. So, the crux of the quantum problem isn’t just the cryptography - it’s communicating that the entire industry, and every single wallet owner, needs to migrate to a new system.
We shouldn’t wait for the quantum threat to materialize. We should start talking about the migration now.
Thank you for reading! I hope you found this article insightful.
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