Quantum Cryptocurrency Simulation Project—What it Shows

By Carolyn Mathas

Multiverse Computing completed a proof-of-concept project with the Bank of Canada using quantum computing to simulate cryptocurrency as a method of payment by non-financial firms.

According to Sam Mugel, Multiverse Computing CTO, “The empirical study was calibrated using the Deloitte Global Blockchain Survey for 2018, 2019, 2020. Participants: 1,488 senior executives and practitioners in 14 countries and regions. We focused on the answers from two questions in the survey."

Q1: "Blockchain will be critical and in our top-five strategic priorities within 24 months" Q2: "On which of the following blockchain use cases is your organization or project working?"

The effort involved simulating the dynamic formation of networks. Depending on the state of the network, firms may want to form/break new connections--in this case, channels of crypto payments. They then looked to find stable states of the network, where no players can form or break any more connections or stable cycles where the network state oscillates between a closed set of states. This allowed the participants to determine which network states we may end up with in the future.

Using D-Wave’s annealing quantum computer, the simulation was able to tackle financial networks as large as 8-10 players, with up to 290 possible network configurations. Quantum annealing is designed to find the ground state of quantum systems, which have a direct mapping to combinatorial optimization problems.

The result of the project was the development of an algorithm together with Bank of Canada that allows for the modeling of a complex system reliably and accurately based on what is known today. The study showed that for certain industries, digital assets would share the payments market with traditional bank transfers and cash-like instruments.

According to Mugel, it was interesting to see stable network configurations with inefficiencies, where players could not form or break any connections, but not all players were satisfied, as some needed to compromise. These types of network states are directly related to dynamic network formation rules, difficult to conceive under a static analysis of the network. Mugel claims it makes the work very interesting as it opens up the realm of properly exploring complex dynamic network behaviors that may not be initially obvious.

See the original press release on the Multiverse Computing website.

April 15, 2022