Quantum Leap Ahead: The Willow Chip and a Wake-Up Call for the Crypto Industry

Back in the late '90s, I was running ServerVault, a fortified cloud for servers back when the internet was still crawling. We were the first cloud providers with a special focus. Our mission? Bulletproof security in a world where most folks didn’t even password-protect their laptops.

One of the steps we took for that elite-level security was RSA SecureID tokens—they were clunky little gadgets with a tiny black and white screen that popped-up random numbers every 60 seconds. You couldn't log into our servers without them, and they were state of the art. I mean cutting edge. Now, quantum computing is here to drop a Willow-sized tree into the digital security pond. One of the biggest areas I see the ripple effects hitting first is the crypto world. After all, many people forget that “crypto” means cryptography, literally digital security (I even had a dog in 2000 named Crypto the Wonder Dog).

Based on 25 years of participating in the evolution of technology industries I’m going to tell you what needs to happen to make the transition to quantum seamless for crypto. I’ll give much more detail at our YPO-only event at Bitcoin Summit in Las Vegas but here’s a start. I’d also like my friends in the industry like @amityoran, @JohnBroome @ErikFichtner and @ScottBethke to add in their thoughts.

If you haven’t seen the data, Google’s Willow chip sounds like something out of a science fiction movie: it is solving problems in five minutes that would take today’s fastest supercomputers longer than the age of the universe. The implications are massive. Remember those RSA tokens? Quantum computing makes cracking them child’s play, as in what we thought was uncrackable just a decade ago can be broken in less than a minute.

Here’s the scariest part, the same ease of breaking goes for the cryptographic algorithms that underpin Bitcoin, Ethereum, Solana, and your favorite DeFi apps. The Willow chip is a wake-up call for crypto, and like my old days at ServerVault, we need to get serious about security. (Don’t think it’s only crypto, the truth is that your bank accounts are under even more threat because of weaker protection)

I’ll let you in on a secret of how I’ve run all my companies for the past 25 years and a great way to look at this problem. We will OODA Loop our way through this.

What’s an OODA Loop, you might wonder? Observe, Orient, Decide, Act. It’s Colonel John Boyd’s legendary strategy for staying ahead of the curve in almost any dynamic situation, and if there’s ever been a time to be nimble, it’s now.

Step 1: Observe

Willow’s performance blows past classical computing like a Ferrari racing a soap box derby. If quantum computing can break RSA and ECC (Elliptic Curve Cryptography), then your private keys, encrypted transactions, and even smart contracts are all at risk. Cryptography, the backbone of blockchain, needs an upgrade and I have a few suggestions to make sure the crypto industry is ready. The good news I notice during this observation is that the good guys have (so far) the most success. Google is not a bad-acting nation-state or terrorist organization, and initiatives like the Massachusetts Green Super Computing Center (MIT, Harvard, Northeastern, BU and Yale collaboration for quantum) so the defenders are ahead of the attackers.

Step 2: Orient

We all know it: the crypto world isn’t exactly known for keeping its feet on the ground. Between meme coins, NFTs, and Sam BTC-is-Fried, we’ve been busy building castles in the sky. There have been some breaks in the clouds however, and since the US Presidential election BTC, thanks largely to efforts of Mike Saylor from Microstrategy (MSTR), has broken into the mainstream. But just as BTC is becoming an accepted global standard the industry needs to ground itself to the reality of quantum threats. Orienting means looking at all the alternatives and angles and understanding what needs to change. Then we need to rally the industry to take action before quantum hacks start making headlines.

Step 3: Decide

Here’s the decision: Do we let Willow and its successors render blockchain security obsolete, or do we future-proof our systems and see Willow as a collaborative partner? Spoiler alert: The only winning move is the latter. We must get ahead of the possible hacks with quantum-specific defenses.

Step 4: Act

To paraphrase an old ServerVault philosophy: Secure your system before someone else does it for you—by breaking it. We used to regularly hack into our own defenses. We built an automated system called Nightcrawler that @JOhnBroome and his amazing team of security studs would try to break into 24/7 we need to do the same for Web3 and blockchain technology. Here’s how we start:

10 Quantum-Safe Steps for Crypto Survival

1. Upgrade to Post-Quantum Cryptography (PQC): Replace RSA and ECC with quantum-resistant algorithms like lattice-based cryptography. We are close to a standard that will help the industry progress rapidly thanks to the US Government (NIST) and industry leaders. Think of it as swapping your rusty padlock for a titanium vault. This will become critical for the world of IoT as well.
2. Adopt Hybrid Cryptographic Systems: Use both classical and post-quantum cryptography during the transition. It’s like wearing suspenders and a belt—just in case and there is backward compatibility to ease the pain of transition.
3. Double Down on Hashing: Upgrade to quantum-resistant hash functions (like SHA-3 or extended-length SHA-256 the mining protocol for BTC). This ensures miners and validators aren’t quantum-raced out of a job.
4. Secure Wallets with Quantum-Safe Key Management: Your private keys will need a makeover. Quantum-resistant wallets will ensure your digital assets aren’t quantum snacks. Theses should be available in early 2025 since The US National Institute of Standards and Technology (NIST) has been working hard to create a standard for PQC.
5. Redesign Consensus Mechanisms: Proof of Work (PoW) could become quantum-easy. Creating a quantum proof of work would mean a major shift to the industry so considering Quantum enabled Proof of Stake (PoS) or other mechanisms with quantum-safe designs should be evaluated.
6. Invest in Real-Time Quantum Adversary Testing: This is a no brainer that’s already happening in areas of the government. Simulate quantum attacks on your blockchain. It’s the digital equivalent of stress-testing your defenses against the Pink Panther, you know the smartest burglar alive.
7. Educate Developers and Users: Most people didn’t know RSA was breakable until it was. No matter what you think about my strategy, getting the word out about potential risks and opportunities to mitigate and evolve is critical. We have to start the dialogue – so share this post! Teach your industry about the quantum risks and the path to safety especially with blockchains.
8. Create Adaptive Governance Models: Blockchains need governance systems and DAOs that allow for very rapid and in-situe upgrades to cryptography without massive disruptions. This will require leaders that have both long-term vison and the ability to build consensus in a servant leadership way.
9. Collaborate Across Industries: Quantum security can’t stand alone. Industry leaders need to work with academic researchers, cryptographers, and quantum labs to stay ahead. My fellowship at the US National War College taught me one thing – the best and brightest young leaders are willing to listen to industry and learn, as well as share their unique perspective from inside the various government agencies.
10. Implement a Migration Plan: The transition to quantum-safe systems will take years. Start now with clear milestones, so we’re not scrambling when quantum systems go mainstream.

Why I am such a fan of the OODA Loop

Quantum computing is the ultimate disruptor, and the OODA Loop framework is your best friend when it comes to responding. Here’s how it works in this context:

• Observe: Quantum breakthroughs like Willow and everything they touch or impact.
• Orient: Understand their implications for blockchain and get many different perspectives (not just your industry or group).
• Decide: Transition to quantum-safe systems, and prioritize the various areas of impact.
• Act: Implement changes quickly and iteratively so you create more data to Observe and start the cycle.

By staying in the loop (literally), you’re not just reacting—you’re adapting and staying ahead. Every single time you take an action you get new and critical data back. With new data you observe the changes and start all over again. This can happen wicked fast in a quantum world so let’s take advantage of it to stay ahead of the bad guys.

The Bottom Line

Quantum computing, led by Willow and its close following successors, is no longer a future or theoretical threat. It’s real, and it’s coming faster than most people have planned for. Much like my ServerVault days, when security meant being ready for the next attack, not the last one, the crypto industry needs to embrace quantum security now. Or, as I used to say: It’s not paranoia if they really are out to get you.

Quantum is here.

Let’s OODA Loop our way to a safer, smarter crypto future, and ensure that BTC, Etherium, Solana and other leading blockchain technologies are the most secure alternatives in the world, because god knows old slow moving banks like Santandar, Bank of America, BNP Paribas are going to be the first victims of attacks. With this in mind, crypto can become the most secure alternative in the financial world, but it the work has to start today.