Central Banks are Concerned about the Rise of Crypto

The Bank Of Canada Uses Quantum Computing To Predict Crypto’s Future in Market

I recently decide to start a Quantum computing Newsletter, you can view it here.

I really do believe that Quantum computing be will be able to crack the cryptography of Bitcoin and other cryptocurrencies by 2035. But that’s not what I’m going to be writing about here today.

As Central Banks try to predict the future of money, something a bit odd is happening. The Bank of Canada has become the first G7 country to turn to quantum computing to simulate scenarios where cryptocurrency and fiat currency can coexist.

With Circle getting serious about the future of stablecoins and being backed by major Financial institutions, it’s do-or-die time for regulators. With Bitcoin being used by the financial elite to store and inflate their own total net work, don’t expect Bitcoin to be regulated in North America and European any time soon.

Please support Creators on Substack by following us in the iOS app:

Quantum Computing Used by Central Banks to Study Crypto Adoption in a Fiat-Stablecoin World

The Bank of Canada, a G7 central bank, and Multiverse Computing, a developer of quantum computing solutions for the financial industry and other sectors, announced completion of a proof-of-concept project using quantum computing to simulate the adoption of cryptocurrency as a method of payment by non-financial firms.

The quantum simulations were designed to help generate examples that illustrate how similar firms may end up adopting different levels of cryptocurrency use. Multiverse Computing is a global leader in quantum computing for finance. It is headquartered in San Sebastian, Spain, and has subsidiaries in Toronto, Paris and Munich.

Multiverse Computing said this is the first central bank to leverage quantum computing to simulate crypto adoption. The project was to such a degree that conventional computers could not be utilized due to the massive number of combinations.

This week, the startup leading Canada’s research hit a milestone: Their model can evaluate more than 1 octillion possible scenarios in 30 minutes. An octalion 10 is followed by 30 thirty zeros.

In this a real use case for QC, or just an example of how cryptos are complicating our lives and the global economy!

Why does it matter?

The International Monetary Fund (IMF) has urged El Salvador to reverse its decision to make Bitcoin legal tender. In September, El Salvador became the first country to allow consumers to use the cryptocurrency in all transactions, alongside the US dollar. Hyper inflation so far in 2022 has occurred in Sri Lanka, Peru and many other South American countries look vulnerable. Food shortages and an Energy Crisis related to the War and a Chinese global recession are expected in 2023.

Enjoy some of the content on this channel? Then share it with someone you know.

The Financial Metaverse is a Dystopian Soup of Economics

That means Multiverse Computing has completed its proof-of-concept, which combines blockchain data from stablecoin Tether (USDT), whose tokens are pegged to the U.S. dollar, and public data from up to 10 major financial institutions. It also consulted with experts from two major Canadian banks to come up with realistic parameters. 

Stablecoins will likely be regulated somehow by 2025, but Circle (USDC) and Tether (USDT) are likely to become the Stablecoin duopoly, since America really likes its duopolies.

That the Bank of Canada (Canada’s own “Fed”) has chosen to rely on research and simulations to figure out how to regulate crypto in its economy, is a bit alarming and a bit amusing.

All in all here are many partnerships going on, but this one was a bit weird. Multiverse Computing conducted its innovative work related to applying quantum computing for modelling complex economic interactions in a research project with the Bank of Canada. The project explored quantum computing technology as a way to simulate complex economic behaviour that is otherwise very difficult to simulate using traditional computational techniques.

From an excerpt from the report: “According to our model, we find that cryptocurrencies would tend to share the market of financial transactions with traditional wire transfers. The total share of financial transactions made using cryptocurrency depends on the wire transfer costs set by each institution in the financial network. These costs are input parameters in our model, which allows us to apply the quantum algorithm to assess the stability of realistic financial networks.”

What do you make of it all?

1 Octillion Scenarios

The Bank of Canada must really be uncertain about the future of crypto and stablecoins to have to formulate so many potential scenarios.

Most scenarios show that mass adoption of cryptos by ‘non-institutional companies’ will be slow. This is because there are knowledge and costs associated with converting fiat currency to a digital currency. Could that be true?

It’s good publicity for quantum computing in finance and crypto, that’s for sure. By implementing this solution using D-Wave’s annealing quantum computer, the simulation was able to tackle financial networks as large as 8-10 players, with up to 2^90 possible network configurations. Note that classical computing approaches cannot solve large networks of practical relevance as a 15-player network requires as many resources as there are atoms in the universe.

“We wanted to test the power of quantum computing on a research case that is hard to solve using classical computing techniques,” said Maryam Haghighi, Director, Data Science at the Bank of Canada. “This collaboration helped us learn more about how quantum computing can provide new insights into economic problems by carrying out complex simulations on quantum hardware.”

Multiverse computing’s expertise in quantum control and computational methods as well as finance means it can secure maximum results from current quantum devices.

Its flagship product, Singularity, allows financial professionals to leverage quantum computing with common software tools.  The company is targeting additional verticals as well, including mobility, energy, the life sciences and industry 4.0.

I guess I always knew the “singularity” would arrive in crypto first.

If you want to support me so I can keep writing, please don’t hesitate to give me tips, a paid subscription or some donation. With a conversion rate of less than two percent, this Newsletter exists mostly by the grace of my goodwill (passion for A.I.) & poverty as I try to break into the Creator Economy.

Anyways I hope you enjoyed the topic, that’s all for today.