With Microsoft’s Moderna and U.S. CHIPS Act funding accelerating quantum hardware, credible estimates point to 2029 for machines capable of breaking modern financial encryption. But for banks as well as managers out there, the risk is immediate under harvest now, decrypt later threats. And while major blockchain networks do remain years away from quantum preparedness, Algorand has shipped native NIST approved Falcon 1024 post quantum accounts directly into production.
Joining us live this morning here at the New York Stock Exchange to discuss the post quantum migration as well as enterprise security, is William Herkelrath, CEO Algorand. William, great to have you here. Thank you so much for joining us.
Thanks for having us.
Well, many of us have heard about this quantum threat and are concerned about security. But can you break down this post quantum threat?
Uh, so obviously computers are getting faster and faster, and there’s the threat that within the next 3 or 4 years, uh, malicious actors will have access to quantum computers, which will be able to break most. Uh, you know, most of the financial systems that we have in play today. Mhm.
Yeah. And when we’re talking about highly regulated industries, in particular financial services, tell us your concern, especially when it comes to that term harvest now and decrypt later. Can you walk us through this.
I mean, I think the primary issue that everyone has to face across the industry is how they’re going to be prepared for the for the reality that people will potentially get access to the systems. It’s already starting to escalate as AI is finding threats or being able to find flaws in the way that current encryption systems are implemented.
And then with computers getting faster and quantum computers being on the horizon, I think everybody is needs to get their head around that. This is a large major project. This is one of the largest, uh, transitions we’re probably ever going to see in the financial industry, certainly in my lifetime.
So let’s talk about the intersection here, especially when it comes to blockchain as well as quantum. So what are you doing differently over at algo.
So we started early I think we were I’m proud of what we did. I myself was not there at the time. But in 2022 they did sign the first post quantum transaction on the Algorand blockchain. And since then we are now fully, uh, fully migrated over so that all of the accounts Algorand, I believe, is probably the only fully quantum resistant, uh, you know, cryptocurrency.
And it’s also the fully quantum resistant chain that’s available in the market today. But we’re already being able to provide those quantum resistance services such that all of the accounts, all of the activity that’s occurring on, on our network at least, is already using the next generation of encryption rather than the previous.
And William, you assumed the helm as CEO of Algorand this month, so congratulations on that role. But of course, when it comes to the difference between other blockchains out there, many people may know of the difference between Ethereum, Solana, or even the protocol for Bitcoin. But what is different when you’re comparing it with other chains out there?
Well, so first and foremost, you know, we are quantum resistant, but we’re actually taking a little bit of an interesting, you know, turn in that I’m a little bit less interested in forcing everyone to use our system. I’m a lot more interested in using our system to harden and, you know, help all of those other systems.
So we’re going to take a little bit of a twist. You’re going to start seeing us becoming Ethereum compliant sooner rather than later, and being able to work on other protocols as well. So we are more about trying to harden the entirety of the Web3 ecosystem rather than simply the Algorand chain, which of course is already compliant with with quantum resistance technology.
Yeah. And William. Of course, we have to bring in the elephant in the room. And that is artificial intelligence, right? So when it comes to AI, every single day, we continue to hear about rogue AI agents. And that is a concern for all industries out there. But when it comes to your space, how does this post quantum cryptography actually ensure AI authorizations do remain verifiable as well as proof against spoofing when it comes to quantum?
Well, so AI threats that are that are taking advantage of I guess people’s human mistakes are going to be with us for a long, long time. There’s not much you can do about that. But what you can do with respect to quantum resistance is you can make the math that’s required to break your encryption systems, you know, a thousand times harder to do.
Right. And that’s the kind of that’s the kind of work that everyone’s working on right now. So the standard 32 bit encryption systems that have been around for a very long time are now reaching that point where there’s a lot of concern that they will no longer be able to hold serve, so to speak. And but the next generation is, you know, orders of magnitude harder to break.
And that’s exactly what, what, what what our industry is focused on.
Yeah. And finally, before I let you go, because you have assumed this new position at Algorand, I do want to ask you about the commercial adoption playbook moving forward. So you have a clear focus on institutional finance as well as post quantum resilience. So give us your vision as we move forward.
I believe that by and large, we’re talking about the entire financial industry, not just in the blockchain space, but the entire financial industry is going to have to shift just about every system that they’re buying and every system that they’re working with from a from the previous system to the next system.
There’s going to be plenty of opportunity for folks like around to help them during on that journey. And I’m sure there’s others that will join us as well. But the commercial opportunity, I think for those systems that already know how to do that is extreme.
Yeah. And finally, before I let you go, one more question. So we all know that the nation’s capital is in the spotlight today as a lot of AI leaders meet with regulators as well as with the executive office of the nation. So what do you think should actually happen when it comes to guardrails?
Uh, there are people who get paid a lot more money than me. There is a lot smarter than me who would probably know that answer. I will say that it is important that people in general, people, do not seem to really perceive the risks. I think they don’t understand the quantum risk to the level that they’re doing.
They’re kind of glossing over it. They are glossing over the AI risks. I think everyone is just of that world that it’s all going to get figured out. It’s actually going to be a lot, a lot harder than people think. And I really don’t think people are going to go it alone. I think people are going to need partners like ourselves and others to help them get there.
There’s a huge, huge effort that’s coming our way that I’m not sure everyone is fully prepared for it.
And why do you say that? It will be harder than most people expect.
Because it’s it’s these signatures. Even the everyone says, oh, the math will get figured out. Well, that math alone is like orders of magnitude harder. The packets that have to get passed between systems are much, much larger. The compression systems have to change. We’ve worked out all of those challenges, and I just don’t think people are really aware of how much they have to do to get there.
We’re three years into four years into our journey. This is not this is not this is not a four month process. This is a multi year process. And it will be for everyone else as well. Fortunately, we’re hoping that we can help them get there.
So even advanced AI systems won’t be able to figure this out.
That’s that is exactly what we’re all hoping for, isn’t it?
Well, William, great to have you here. Thank you so much for joining us today for this conversation.
Thank you.
