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The CEOs of Americas biggest banks and financial institutionsBank of America BAC , Citigroup C , J.P. Morgan, Goldman Sachs GS , Morgan Stanley MS , and Wells Fargo WFC are getting a grilling today up on Capitol Hill.Theyll be asked about why theyve made so much money during COVID; and why they arent loaning out more money to help us recover from COVID; as well as getting the usual questions powerful bankers draw from our politicians, both Republicans and Democrats.

But theres one question they should be asked, but wont be: what are they doing to protect their assets and Americas financial industry against future quantum attack?Because getting the big banks to lead the charge in getting America quantum ready is as much a matter of social responsibility as promoting racial equity; and as fundamental to our national security as it is a matter of their bottom lines.

The Colonial Pipeline debacle has revealed how vulnerable our infrastructure is to cyberattack, including a future quantum computer attack.My last column revealed how important it is to use quantum and post-quantum solutions to protect our cyber vulnerabilities, now and in the future.This is even more true of our financial infrastructure, including our leading financial markets, our global payments system, and the Federal Reserve system itself.

NEW YORK, NEW YORK - MAY 11: The New York Stock Exchange stands in lower Manhattan after global ... [+] stocks fell as concerns mount that rising inflation will prompt central banks to tighten monetary policy on May 11, 2021 in New York City. By mid afternoon the tech-heavy Nasdaq Composite had lost 0.6% after falling 2.2% at its session low. (Photo by Spencer Platt/Getty Images)

Our preliminary econometric research at the Hudson Institutes Quantum Alliance Initiative indicates that the cost of a quantum computer attack on our financial system would be catastrophicfar more than a successful conventional cyberattack.In February authors Welburn and Strong of the RAND Corporation applied a standard Input-Output (I-O) model to conclude that cyber-attack disrupting JP Morgan Chases business operations for a single day would result in over $3.5 Billion in total losses for the American economy.

Unfortunately, that model ignored the network contagion effects within the financial sector.We estimate that a single quantum attack on one of the five largest financial institutions in the U.S. that disrupts their access to the Fedwire Funds Service payment system would cause a cascading financial failure costing anywhere from $730 Billion to $1.95 Trillion.Indeed, a quantum computer attack could impair nearly 60% of total assets in the banking system due to bank runs and endogenous liquidity traps.

We know from conversations with Treasury Department officials that banks and the Fed work closely with the federal government and Treasury on cybersecurity issues.But despite warnings from the last Office of Financial Research report on the quantum risk to financial stability, theres still a big hole when it comes to confronting the quantum threat.In fact, the big banks interest in quantum computers tends to revolve around how those computers amazing capabilities will be to serve customers and analyze market trends and risks.Thus far only J.P. Morgan and VISA V seem to be thinking about the day when a powerful quantum computer can break the most widespread cryptographic methods currently used in cybersecurity. The fact is, the leadership of all the big banks will be crucial for protecting our economy from a quantum-induced financial meltdown, or worse.

Therefore, its time to propose that the banks join together to create a Quantum Task Force made up of the countrys largest financial institutions, to promote quantum and post-quantum solutions to cyberattacks not just for themselves but throughout the financial system. Recent research from the New York Fed reveals that a cyberattack just one vulnerable mid-sized bank (less than $10 billion in assets, or less than five percent the size of Goldman Sachs) can bring down the whole system. Our preliminary study here at the Hudson Institutes Quantum Alliance Initiative indicates that the result would be catastrophic.

Offsetting a risk of this magnitude should be a national, as well as industry, imperative.Its a problem that wont wait until 2024 when NIST is expected to begin the roll out of its post-quantum cryptography standards. The array of tools currently available, from quantum-resistant algorithms and double encryption to quantum key distribution for the most vital corporate communications, can protect institutions today and tomorrow, against a quantum attack or the conventional threats that are already lurking out there.

It will no longer suffice to claim that the quantum threat is far off out on the horizonten years or morethat we dont have to worry about it before the next shareholders meeting. As my next column will show, the threat may be coming sooner than the experts have predicted.

Fortunately, our biggest financial institutions have the know-how, the resources, and the self-interest to lead us all into the post-quantum era.It is no exaggeration to say that none of us will be truly safe, until they are.

Originally posted here:
Getting The Big Banks To Confront The Quantum Challenge - Forbes

Great leaps are already being made in creating a super secure quantum internet. It could overturn the role of information in our lives and give us a globe-spanning quantum supercomputer

By Stephen Battersby

Ollie Hirst

MANY of us have uploaded our lives to the internet. Banking, work emails, social media, dating profiles, medical records all that vital, sensitive information. So it is a little disconcerting that the internet has a fatal security flaw. Dont panic; our private information is safe for now. But before very long the encryption algorithms that protect us online are going to crack.

That is the urgent driving force behind a new, more secure kind of internet that harnesses the power of the quantum realm. Once up and running, the system will be able to do a lot more than protect our data. It could bring us unforeseen quantum apps, and maybe become the scaffold for a world-spanning quantum computer of incredible power.

Building the quantum internet is a huge and multi-faceted engineering challenge, but the foundations are already being laid. Networks of fibres are spreading. Scientists are chatting in secret on local networks. There are even plans to use tiny satellites to enable long-distance quantum connections. Sooner or later, we could all be joining the quantum information superhighway.

Human culture and industry have long been based on information. If you could get the right kind of information, understand it and share it, you could gain power and profit. The rise of the internet as we know it cemented the role of information and we are only beginning to feel its profound effects. Now we are at the threshold of a new information age, which could change things all over again.

Conventional, classical computers deal in digital units called bits. This is the amount of information in the outcome

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Quantum internet: The race is on to build an unhackable online world - New Scientist

COLLEGE PARK Over the past few decades, quantum computing has developed from what many considered a science-fiction fantasy into what could be the next technological revolution. One local company, College Park-based IonQ Inc., could play a key role.

In what some are calling the quantum space race, governments around the globe are funding quantum computing research in an effort to become the worlds leading innovator. China spends about $2.5 billion on quantum research annually, more than 10 times what the U.S. spends, according to a report in The Wall Street Journal.

The quantum competition, reminiscent of the U.S.-Soviet era Sputnik space race, is expected to heat up under the Biden Administration, which plans to commit $180 billion to research and development and industries of the future, including quantum computing. That spending could provide a boost for IonQ, which was founded just six years ago.

Both Congress and the president have made clear they plan to invest in the research, technology and talent needed to keep the United States in the global vanguard of innovation, said Kara Sibbern, a IonQ spokesperson. At IonQ, we will be working with policymakers to support this effort however we can.

But whether new companies such as IonQ can compete in the brave new world of quantum computing is unclear. IonQ will be up against many U.S. and international companies, including heavy hitters like Google, Microsoft and IBM Corp.

Investors on Wall Street are closely watching the young company. In March, IonQ filed with the Securities and Exchange Commission to go public on the New York Stock Exchange by merging with dMY Technology Group Inc. III, a special-purpose acquisition company, or SPAC, based in Nevada. The deal is valued at about $2 billion. If the SEC approves the transaction, IonQ would be the first company in the U.S. focused specifically on quantum computing to go public.

Like many other companies that use SPACs to raise capital, IonQ is hoping that merging with an acquisition company will allow it to raise capital faster than by using a traditional initial public offering. Merging with dMY affords us greater speed to market, flexibility and ability to focus on business execution, said Sibbern. The deal is expected to be completed this year, but the company couldnt provide an exact date.

The stock offering marks a huge step for a computing technology that not long ago was widely thought to have little promise beyond the theoretical.

Quantum computers use the power of quantum physics to quickly solve problems and perform tasks faster than a conventional computer. The technology could speed up calculations related to finance, drug development, materials discovery, artificial intelligence and others.

Quantum computers function differently from conventional computers, which accounts for their speed. Conventional computers use a large number of tiny transistors, which represent information as either a 1 or a 0. Quantum computers differ in that they use qubits, which can represent and work with both numbers simultaneously. This is due to whats known as superpositioning.

To understand the principle of quantum superpositioning, it is often compared to a coin. Think of a single, stationary coin sitting on a table. It will be in only one of two states: heads or tails. Similarly, a transistor can only be either 0 or 1. But if you spin the coin, you can say its both heads and tails at the same time until the moment you stop it and see what it lands on. This is like a qubit. Until you measure it as a 0 or 1, it can exist in several different states at the same time.

So far, quantum computing is still in the research phase, far from widespread commercial use. IBM unveiled its first commercial quantum computer in 2019, IBM Q System One, but the device is not for sale. Rather, its a cloud-based product that customers can access over the internet to perform calculations.

However, executives at IonQ and other companies believe the industry is close to developing scalable products that can serve business needs.

We believe quantum computing will power the next technological revolution for humankind and that the dawn of the quantum age is here, said Chris Monroe, who co-founded IonQ and serves as the companys chief scientist. Like the information age, quantum is expected to have far-reaching impacts across every facet of our society.

According to Monroe, any corporation with an optimization problem can yield results from quantum computing. Were seeing exciting advances in artificial intelligence by applying quantum to machine learning, which can lead to even greater results, he said.

Important hurdles still exist for quantum. Eddy Zervigon, CEO of Quantum Xchange, a quantum-focused cybersecurity company in Bethesda said that while quantum computers can potentially lead to significant advancements, their speed and power could make it easier for hackers to break into the systems because current encryption methods wont be able to keep up.

This critical point in quantum computing is known as Q-Day, or the day in which quantum computers can render current encryption methods useless. No one is questioning if, but when this day will come, said Zervigon. Quantum Xchange, recently named one of the 20 most promising startups by Technical.ly DC, is dedicated to preparing companies and organizations for Q-Day by offering quantum-safe data protection.

IonQ was founded in 2015 by Monroe and Jungsang Kim. Both are professors in electrical engineering and computer engineering at Duke University in North Carolina. Both have also taught at the University of Maryland and are currently visiting professors in Marylands Physics Department.

The two previously spent more than two decades combined researching quantum physics and engineering. Monroe and Kim would later combine their efforts to publish a scientific paper, Scaling the Ion Trap Quantum Processor, which was published in 2013, and detailed how to build and scale a programmable quantum computer. The paper was noticed by Harry Weller, a venture capitalist with the Maryland-based New Enterprise Association, which provided IonQ with $2 million in seed money.

Between 2015 and 2018, IonQ raised an additional $20 million in funding from Google Ventures, Amazon Web Services and NEA. IonQ would later raise more than $55 million from investors such as Samsung Group, Lockheed Martin Corp. and others.

If IonQ succeeds, it could foster growth of other quantum computing and related companies in Maryland and the Washington area and drive billions of dollars of economic improvement over the next decade in the region, said Monroe.

He added that the University of Marylands support is contributing to the industrys growth. In 2020, IonQ opened a new Quantum Data Center, a 23,000-square-foot center in Marylands Discovery District. The site was made possible in part due to a $5.5 million investment from the university.

Charles Winthrop Clark, a fellow at the National Institute of Standards and Technology and the Joint Quantum Institute, offered a more measured but still optimistic view of quantum computings potential in the region. He notes that while a quantum industry wont do for the Washington metro region what the digital revolution did for Silicon Valley, there will be a lively quantum ecosystem in the DMV.

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Big bang theory: Maryland company moves ahead in quantum space race - The Star Democrat

Christian Weedbrook, founder of the quantum technologies company, Xanadu, listens in as Varun Vaidya, left, discusses the working principle of one of the building blocks of quantum computers, at their office in Toronto on June 20, 2019.

Tijana Martin/The Globe and Mail

Toronto startup Xanadu Quantum Technologies Inc. has raised US$100-million led by U.S. venture capital giant Bessemer Venture Partners as competition intensifies to bring quantum computers to market.

The financing, first reported by The Globe and Mail this month, is also backed by Canadian billionaire Jeff Skolls Capricorn Investment Group and U.S. investment giant Tiger Global and past investors Georgian, OMERS Ventures and U.S. venture capitalist Tim Draper. The funding values Xanadu at US$400-million post-transaction.

Notably, BDC Capital and In-Q-Tel, the U.S. Central Intelligence Agencys venture arm, also backed the deal. Both have invested in Burnaby, B.C.-based D-Wave Systems, which sold the first commercially available quantum machines. Despite 20 years of development and US$300-million of funds raised, D-Wave has struggled to commercialize its technology; last year it stopped efforts to sell hardware to focus on offering online access to its machines and completed a refinancing that wiped out most of the value of some investors.

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D-Waves technology is Quantum 1.0 and the rest of us are Quantum 2.0, Xanadu chief executive Christian Weedbrook said in an interview. I think there has been somewhat of a passing of the torch.

With the financing, Xanadu cements its status as one of the leading upstart companies in the global race to develop the worlds most powerful computers by harnessing the power of subatomic particles to perform calculations that would take current supercomputers millenniums to run. Industry players believe quantum computers could eventually offer powerful new ways to help with drug discovery, materials science, financial risk modelling and other applications.

Xanadu, alongside U.S. startups PsiQuantum Ltd., IonQ Inc. and Honeywell International Inc., are bringing newer approaches to a field that also includes global giants Microsoft, Google, Intel and IBM.

D-Wave and many rivals, including IBM, are developing machines that contain quantum chips that must be cooled to temperatures colder than deep space to function.

Xanadu and PsiQuantum are trying to draw their computing power from light. Xanadu uses a process called squeezing light by firing lasers that enable light particles to generate quantum effects on thumbnail-sized chips. IonQ and Honeywell, by contrast, are developing trapped ion technology that would draw power by creating charged ions from a rare-earth metal.

Xanadus method, based on Mr. Weedbrooks PhD thesis at Australias University of Queensland, happens at room temperature, and he believes with further development he can cut out supercooling, which is still required for a part of the process, altogether.

Without supercooling an elaborate undertaking Mr. Weedbrook says Xanadu can develop machines quicker and cheaper than other quantum computers and eventually shrink its chips enough that they could fit in small devices. By contrast, D-Waves computers are housed in shed-sized boxes.

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Mr. Weedbrook said Xanadu has managed to increase the number of qubits which replace the 1 and 0 bits of conventional computing and can simultaneously hold a mix of values and interact with each other in complex ways tenfold to 40 per chip in the past two years. He said Xanadus goal is to increase the number of qubits used to power its computers to one million. Thats where you can start solving a customers problems and start making an impact, he said.

The company wouldnt do that on a single chip, but by networking together many chips through fibre optics within new quantum data centres Xanadu hopes to eventually build. As with cloud computing, users would be able to access the technology over the internet to do their complex calculations. By distributing computing power across many chips, Mr. Weedbroook believes the company can correct for errors generated by the quantum computing process that experts have long identified as a major hurdle for developers.

Quantum computing is still early in its development. Some skeptics believe it will take many years and billions of dollars to develop functional, commercially successful machines that live up to their hype. If [Xanadus] invention becomes a reality, its the most important company in the country, Michael Hyatt, a Toronto tech entrepreneur and Xanadu investor, said.

For now, Xanadu is offering a handful of clients online access to its early machines and has created open-source software tools for developers to work with quantum computers. It is also designing and selling quantum computing hardware to universities, government labs and corporate customers to help fund its development. Mr. Weedbrook estimated the company was five years away from reaching a significant commercial scale. Our investors know [our technology] can really change the world and they take a long-term view.

Bessemer partner David Cowan, whose firm has also backed quantum computing startup Rigetti Computing, said in a statement, Xanadu impressed us as the leading contender to develop the first commercially valuable, photonic quantum computer. BVP is betting that in this decade quantum computers like Xanadus will make the conventional supercomputer look like an antiquated abacus.

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'Passing of torch' in quantum computing race as Toronto's Xanadu raises $100-million from Bessemer, CIA, Jeff Skoll - The Globe and Mail

A former White House cybersecurity coordinator told last weeks RSA Security conference that ransomware has gone from being an economic nuisance to becoming a scourge that must be fought by governments worldwide.

The conference took place against the backdrop of a cybersecurity industry increasingly challenged by attacks, many of them driven by ransomware.

Michael Daniel, chief executive of the Cyber Threat Alliance, told a panel that ransomware has evolved from economic nuisance eight years ago to a national security and public health and safety threat today.

He argued that it would require significant action to reduce the value that criminals got out of ransomware.

According to a March 2021 ransomware threat report by Palo Alto Networks, the average amount demanded by ransomware gangs doubled in 2020. The average ransom paid tripled in the last year to over $300,000.

The panel was recorded before details of the recent Colonial Pipeline ransomware attack emerged, so it could not discuss the lessons learned. As the conference was taking place, it emerged that Colonials chief executive Joseph Blount had transferred 75 bitcoin around $4.4m to the attackers because he was unsure of the attacks extent or Colonials prospects for recovery.

Alongside concerns about ransomware, the future impact of quantum computing and the lessons from the SolarWinds attack were also among the critical issues discussed during the RSA conference.

The ongoing development of quantum computing has been described as threatening the encryption algorithms that currently protect data, from online banking records to personal documents on hard drives.

Prominent members of a cryptographers panel at the conference played down quantum computings potential impact. Ron Rivest, one of the inventors of the RSA algorithm, described it as astonishing to me how much energy is going into the commercialization of technology that doesnt yet exist.

Rivest added that the number of start-ups involved in quantum computing meant that the amount of money being invested in the technology is incredible.

I think the two major questions are, Can you build a quantum computer at scale that will last long enough to do it a useful computation? and Are there useful applications for this technology, even if you could build it? And I think the answers so far are not clear and maybe.

In a separate session, SolarWinds chief executive Sudhakar Ramakrishna said the companys ongoing investigation into last years cyber breach found that the nation-state group behind it began probing SolarWinds network as early as January 2019.

Previously, it was widely believed that attackers first gained access to SolarWinds systems in October 2019. The breach, which impacted 100 companies and nine government agencies, remained undetected until December 2020, nearly two full years after the initial malicious activity.

What the RSA conference confirmed is that hackers remain several steps ahead of the cybersecurity industry. Ransomware attacks are increasing precisely because attacked companies like Colonial Pipeline will pay to keep their operations running. In the absence of effective government and industry action to thwart the attackers, theyll probably keep on paying.Related Report Download the full report from GlobalData's Report StoreGet the Report

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RSA conference highlights 'scourge' of ransomware and takes aim at quantum computing - Verdict