The Past of Quantum is Money, The Future of Money is Quantum
The tale of quantum physics and money is a rich narrative, stretching back to a time when the notion of quantum information was forming. At the heart of this narrative lies a pioneering figure, Stephen Wiesner, whose early vision seeded many concepts core to quantum computation. One of them was quantum money. With the immense benefit of hindsight, we can say the idea was “obvious” — quantum data can’t be copied, and that money can be copied is bad, so why not encode money in quantum data?! Of course, it wasn’t always so easy. Let’s turn back the clock.
Wiesner’s quantum legacy
Quantum money traces back to Stephen Wiesner, a graduate student at Columbia University, in the late 1960s. His unpublished manuscript, titled “Conjugate Coding,” was conceived far ahead of its time. It both introduced the idea of encoding information into discrete quantum systems and showcased the first practical utility of such “quantum information.” The work was apparently rejected for publication in 1969, though it was distributed to a small group of physicists interested in information theory. The paper was eventually published in 1983 when quantum information moved from obscure to nascent, largely due to its earlier circulation and influence on the field’s more memorable luminaries.
As a more popular example, Charles Bennett and Gilles Brassard utilized Wiesner’s scheme to show that quantum information can be used to distribute cryptographic keys. This 1984 paper (dubbed BB84) launched the foundational fields of quantum communication and cryptography. Wiesner, by the way, eventually left academia and moved to Israel to practice Judaism and construction work, believing (according to a story told by Scott Aaronson) it to be much better for the soul. Having been in academia for over 20 years, he might have been right. Sadly, Wiesner passed away in 2021.
Quantum money
Wiesner’s work introduced a general technique to encode and recover information in quantum systems. We now call these “quantum bits” or qubits, so I’ll use that terminology. Quantum money was just one application. The details are a bit mathematical, so we’ll skip that in case this is a causal morning read for you, but it works on the following simple principles (not necessarily independent).
Quantum Uncertainty. Quantum money leverages the principle of uncertainty, where it’s impossible to distinguish between certain quantum data. Moreover, any attempt to do so must physically alter the medium encoding the data, which is detectable.
No-Cloning Theorem. Central to quantum money’s security is the no-cloning theorem, which states that it’s impossible to create an exact copy of arbitrary quantum data. This thwarts any counterfeiting attempts, ensuring the authenticity of quantum banknotes.
In other words, each quantum banknote carries a unique quantum data signature, which can’t be read or copied, making it impossible to counterfeit.
Great! So, why not carry around quantum money? First, we don’t have good quantum “hard drives” — that is, quantum data lasts fractions of a second before succumbing to errors due to interactions with its environment. We can barely keep quantum data uncorrupted in highly isolated laboratory experiments, let alone on bank notes. But there is no fundamental reason we won’t be able to do it eventually, and progress in quantum technology is tracking much faster than it did with digital technology.
Public key quantum money
Now, even if we had the ability to create quantum money, there is still one big drawback — at least for the modern citizen. In Wiesner’s scheme, the physical banknote needs to be brought back to the bank that created it for verification. Perhaps it’s better, then, to call it quantum currency since it doesn’t have all the features we would want of money. In the parlance of cryptography, it’s called private-key quantum money because only the bank has the information needed to verify it.
We want secure money that we can spend without the bank knowing who we spent it with. This is called public-key quantum money.
Public key quantum money extends Wiesner’s idea to a scenario where the verification of quantum banknotes can be done by anyone, not just the bank that issued it, using a public “key.” This concept is akin to public key cryptography we all use in our digital transactions online today.
Several proposals for public-key quantum money exist. While some have been proven secure, they are based on assumptions. Researchers go back and forth, breaking and patching schemes, occasionally creating entirely new ones.
While the mathematical details vary widely, each public key quantum money proposal works basically the same way as Wiesner’s original idea in that the “money” is some physical device encoding quantum data created by a bank. However, now everyone knows the verification method. The problem is that knowledge of the verification might be used to counterfeit the money.
The trick is thus in designing the right combination of quantum data and verification methods so that verification is highly likely for valid money and highly unlikely for any counterfeit.
At this point, you may be wondering, given we can’t yet physically realize quantum money and we are proposing the move to public key cryptography anyway, don’t we already have a solution with Bitcoin, for example?
Bitcoin connection
Bitcoin and other cryptocurrencies operate with public-key cryptographic algorithms with security, integrity, and traceability of transactions on their respective blockchains. One of the features of Bitcoin is its pseudo-anonymous nature, wherein the identities of the parties involved in a transaction are masked by cryptographic addresses. Yet, the transaction history of each address is publicly available on the blockchain. This design aims to provide some level of privacy while maintaining transparency and security.
The key difference between quantum money and Bitcoin boils down to the level of privacy and the underlying technology used to enable it. Quantum money could provide robust privacy, making transactions and account balances concealed from public view or even from some centralized authority. Bitcoin, while offering a level of privacy through cryptographic pseudonymity, has its transaction history and account balances publicly accessible on the blockchain, which could potentially be de-anonymized. This bug-turned-feature is simply due to the fact that digital information can be copied. Bitcoin avoids — or, I should say, allows — copying by making the entire ledger public. You can’t counterfeit money if everyone else knows who has it.
Quantum money can thus be imagined as a kind of cryptocurrency with the best of all worlds. It is decentralized, private, and secure! And, unlike some cryptocurrency protocols, it has energy-efficient verification. But, if I didn’t remind you that the technology to realize portable quantum memory is still far off, you might think this all sounds too good to be true, which brings us to…
Quantum Scams
The speculative nature of future applications and the esoteric principles underlying quantum technologies have given rise to various scams and straight-up conspiracy theories. These scams exploit the aura of mystery and sophistication surrounding quantum terminology (superposition, entanglement, parallel universes, etc.) to peddle false narratives and fraudulent schemes. Awareness and education are vital in navigating the landscape of quantum technologies and discerning the genuine advancements from, not to put too fine a point on it, bullshit.
The “Quantum Financial System,” or QFS, is a prime example of how the allure of quantum technology can be exploited to craft lies and nonsense. In short, QFS claims to be a new global financial system underpinned by quantum technologies and gold-backed currencies. However, not only does it have no verifiable evidence supporting its existence or adoption, it is often associated with known conspiracy theories and scams. If you want to learn how to easily spot quantum bullshit, and have a good laugh, I suggest you pick up a copy of my book, Quantum Bullsh*t: How To Ruin Your Life With Advice From Quantum Physics.
As quantum technologies continue to evolve, the dream of quantum money inches closer to reality, promising a future where the principles of quantum physics revolutionize our information technology. Not only may we transact securely and privately with quantum money, but we may also have “quantum” rights protection, software licensing, and other things of value that need to be used but not copied.
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Dr. Chris Ferrie
