One of the main reasons why cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) became popular is the brilliant computing science behind them. Blockchain has the capability of changing how records are kept across a variety of industries.
Cryptocurrencies are not like cash at all – electronic or physical versions. They are essentially computer algorithms. I'm not an expert on this in the slightest, so if you're interested there are many other places on the internet that can hopefully explain Blockchain.
Marco Tomamichel, a Senior Lecturer at School of Software, University of Technology Sydney, recently told readers of The Conversation how quantum computers might one day be able to solve the Blockchain 'puzzle' efficiently. They would be able to use the quantum mechanical interactions that dominate physics at a microscopic scale and perform calculations extremely fast. This threatens the strength of cryptocurrencies if the key can be solved in the short time that the transaction is proposed..
The public key for many Bitcoin transactions is already in the public domain on the Blockchain, meaning theoretically a hacker could steal funds even if a transaction isn't proposed.
Although this doesn't sound good it's also possible that an arms race could occur. Quantum computers may be able to break the current system, but quantum computers could also lead to much stronger defences as well.
Ever since December last year the excitement surrounding cryptocurrencies has been falling. With less buyers there's less support for the current prices. But, because they have no intrinsic value and don't create any cashflow the Bitcoin price would be as justifiable at US$3,000 as it had been at US$7,000 or US$19,000.
I'd avoid putting any money towards cryptocurrencies, it would be better to invest in high-priced tech shares like Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).
