Quantum and AI will make hackers more powerful than ever (Ed. Op.)

The advancement of computing power over the last few decades has been extraordinary. As computers become more powerful, hackers have access to more sophisticated tools to launch attacks against cryptographic platforms. The threat of quantum and AI-powered hackers will soon be a major challenge for crypto entrepreneurs and developers.

Web3 hackers are one of the biggest challenges facing the industry and a major barrier to institutional adoption and widespread use. According to Cyvers data, more than $2.1 billion has already been stolen this year, and there’s still almost a quarter of the year to go.

Cybercriminals are always exploring new techniques to exploit their targets, and cybersecurity experts need to stay ahead of the curve. This back-and-forth continuum has shaped Internet governance since its inception, and has intensified as cryptography has further intertwined finance with online technology.

However, this goal has become much more difficult with the emergence of new technologies. Quantum hacking and AI are gradually becoming the go-to methods for hackers, involving sophisticated data breaches and allowing access to previously impenetrable systems.

What is quantum hacking?

Quantum hacking refers to using superior computing power to break modern cryptographic algorithms. While cryptographic algorithms are theoretically “unhackable”, advances in quantum computing have made it possible to break the encryption techniques used by cryptographic platforms. Breach of secure cryptographic communications can lead to serious security compromises.

The threat of quantum hackers is already upon us and will continue to grow as quantum computing systems evolve and become more widespread. Hackers have come a long way with traditional computer systems, but now their capabilities will grow exponentially.

Quantum Hacking and AI

Artificial intelligence (AI) has been one of the most defining technological trends of the last two years. The rise of generative AI platforms like ChatGPT has captivated tech enthusiasts around the world. AI presents remarkable opportunities, but also serious threats, especially when it comes to data privacy and security.

It is important to understand the broad scope of AI. This technology extends far beyond generative chatbots and includes automated functions that traditionally relied on human intelligence. AI applications range from data crunching tools and machine learning to speech interpretation and more. While this offers endless possibilities for innovation, it also becomes a double-edged sword when malevolent actors use AI to achieve their goals.

Furthermore, the possibility of AI engines developing awareness and self-awareness remains one of the biggest “what ifs” of our time.

The growing threat

The threat of quantum hackers is clear for all to see. A recent report by the Hudson Institute estimates that future quantum hacks targeting global financial institutions or systems like FedWire could result in an indirect loss of $2-3.3 trillion in GDP, catastrophic damage to the global economy.

Hackers are constantly looking for new ways to compromise systems, and advanced methods like quantum computing are becoming more feasible. Although quantum computers are not yet widely accessible, their numbers are growing and are no longer limited to Western countries.

AI, on the other hand, is accessible to almost anyone. However, to gain the ultimate hacking power, it is necessary to develop proprietary or semi-autonomous AI models that are free from the ethical constraints imposed by big tech companies. That said, today’s most significant crypto hacks are not carried out by small-time hackers, but by well-funded organizations, sometimes even state-sponsored groups.

State-sponsored hackers, such as North Korea’s Lazarus group, are notorious for infiltrating highly secure systems. Most recently, the group was suspected of being behind the $235 million WazirX hack. These groups are much more likely to have access to quantum processors and set up AI-based hacking tools.

Weak solutions to a strong problem

To stay ahead of these threats, crypto companies need new solutions. Cryptographic keys, which underpin encrypted communications, are not infallible. However, quantum computing also offers security enhancements, such as Quantum Key Distribution (QKD), which detects eavesdropping attempts. But this is not enough to overcome the threat.

The combination of quantum computing and AI creates an almost infinite array of attack vectors. Because individual solutions only address specific vulnerabilities, more comprehensive and holistic defenses are needed, especially to protect against “zero-day attacks,” which are unexpected and previously unknown hacking methods.

This requires innovative and proactive solutions that can address incidents in real time, or even before they occur. Given the sophisticated nature of new-age hacking techniques, it is no longer sufficient to rely solely on pre-launch security measures such as auditing or passive threat intelligence tools which may respond too slowly to evolving threats.

Fight fire with fire

If hackers can harness AI, so can cybersecurity experts. Fighting hackers with AI and quantum calls for AI-based security tools.

One solution could be real-time monitoring and detection of cyber-attacks using machine learning geometric patterns and anomaly detection that trigger prevention mechanisms. Companies taking a more proactive approach can use address screening tools to assess the security reputation of smart contracts and wallets.

However, the ultimate solution is to combine preventive and proactive measures. For example, an AI-powered firewall that simulates transactions and validates them for malicious intent. Firewalls, which have long protected online systems, can be adapted for Web3 security, offering businesses peace of mind against advanced hacking techniques.

These solutions reflect a broader shift in Web3 security toward more proactive, technology-based products.

The big picture

Web3 security is a crucial aspect of blockchain platform management. Bounties for hackers grow as the industry grows. With quantum computing and artificial intelligence giving hackers unprecedented capabilities, crypto companies cannot ignore security. They need advanced tools to combat this new wave of supercharged crypto attacks.

Author:

Michael Pearl is a seasoned fintech and blockchain executive with over a decade of experience in business development and growth. Before joining Cyvers, he was the COO of Intentable and was the director of content at Finance Magnates and global economics editor at Calcalist. Michael is also the host of the podcast “Free and Decentralized” and is launching a new podcast called “Web3 Watchdogs”. He is a lawyer and has a master’s degree in International Relations and a degree in Law from the University of Haifa.

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