Zcash warns of quantum threat: private payments at risk

Zcash (Zec) is known for its strong privacy protections, but future quantum computers may be able to break through them. Especially with transactions via crypto platform NEAR Intents, there is a risk that one public address will expose a user's payment history. That's why Zakura developers are working on a solution to better protect the privacy of Zcash wallets.

The problem is with NEAR Intents, a platform that allows users to exchange crypto coins between different networks. When converting Zcash to, for example, USDC, a Zcash address is made public. That address is intended to return any remaining coins.

Even if no refund is required, the address remains visible. Currently, that is not an immediate danger, but future quantum computers could change that.

With a sufficiently powerful quantum computer, an attacker may be able to uncover the secret viewing key behind the address. That key is used to recognize and view payments received.

Because multiple Zcash addresses may be linked to the same key, a single vulnerable address could potentially give access to a much larger payment history. Not only transactions and amounts can be visible, but also any private messages.

That doesn't mean an attacker can automatically steal Zec. This requires another secret key. So the biggest risk is the loss of financial privacy.

To prevent that, developer Zakura proposes a new security method. In addition, each exchange via NEAR intents receives a separate viewing key.

If a future quantum computer manages to retrieve one key, the possible damage is therefore limited to the associated payments. Other transactions remain shielded.

The solution does present a practical problem. When a wallet uses hundreds of separate keys, it becomes more difficult to retrieve old payments. This happens, for example, when someone restores their wallet on a new device.

Zakura wants to solve this with private information retrieval (PIR). This allows a wallet to request information without the database administrator seeing what data is being searched for.

According to the developers, wallets using the open-source software could add the new security in a matter of weeks. Hardware wallets require additional software updates first.

The threat is not limited to Zcash. Bitcoin (BTC) and Ethereum (ETH) are also investigating how future quantum computers can influence security.

Particular attention is paid to Bitcoin addresses whose public keys are already visible. A sufficiently powerful quantum computer could in theory find out the corresponding secret keys.

Major technology companies are making progress in the meantime. For example, with its Willow chip, Google has taken important steps in reducing errors during quantum calculations.

Still, no quantum computer has currently been shown to be powerful enough to crack the cryptographic security in question. When that will be possible is still uncertain.

Zakura wants to make the new protection available before a previously announced January deadline for quantum-proof Zcash payments. The year of that deadline has not yet been confirmed.

The proposed solution does not make Zcash fully resistant to quantum attacks, but should prevent one public address from compromising the privacy of an entire wallet.