Encryption Algorithms

3.1 What is an encryption algorithm?

DEFINITION: An encryption algorithm is a mathematical rule that turns plaintext information into ciphertext, or reduces ciphertext to plaintext. Its core goal is that the content of data cannot be deciphered without a key.

3.1.1 Encryption algorithms are divided into two main categories

Symmetric Encryption (Symmetric Encryption)

• The sender and receiver use the same key.

• It is fast and suitable for encrypting large amount of data.

• Representatives: AES, DES, ChaCha20.

Asymmetric Encryption

• Uses a pair of keys: public key encryption, private key decryption.

• Core in the modern Internet, blockchain signature, identity authentication.

• Representative: RSA, ECC (Elliptic Curve Cryptography)

3.1.2 Application in blockchain

• Hash algorithm (e.g. SHA-256): used to generate fingerprints for blockchain, irreversible, collision resistant.

• Signature algorithms (e.g. ECDSA): used to verify whether a transaction is legitimate.

• Advanced algorithms such as zero-knowledge proof and homomorphic encryption: used to protect privacy and improve efficiency.

3.2 Quantum Computers and the Future of Encryption

3.2.1 What is quantum computing?

The smallest unit of a conventional computer is the Bit, which can only be either 0 or 1. The basic unit of quantum computing is the Quantum Bit, which can be in a superposition state of 0 and 1 at the same time.

This means that quantum computers are far more capable of solving certain math problems than conventional computers.

Impact on encryption:

The central threat to quantum computers stems from two algorithms:

Shor’s algorithm.

• Factorizes large integers and computes elliptic curve discrete logarithms in polynomial time.

• It directly breaks RSA and ECC, the foundations of most current asymmetric encryption.

Grover’s algorithm

• Reduces the exhaustion time from 2ⁿ to 2ⁿ⁄² for hash functions.

• It poses a challenge to hash algorithms such as SHA-256, but not enough to be an immediate threat.

3.3 Will SHA-256 and Elliptic Curves Really Be Cracked?

3.3.1 SHA-256 Security Analysis:

• SHA-256 is an irreversible hash function widely used in Bitcoin and blockchain.

• The Grover algorithm reduces the difficulty of cracking it from 2²⁵⁶ to 2¹²⁸, but it is still very secure.

• Stronger hashing algorithms such as SHA-3, BLAKE3 have emerged to deal with future threats.

CONCLUSION: SHA-256 is still usable in the quantum era, but alternatives with higher cryptographic strength may be needed.

Can ECC (Elliptic Curve Cryptography) be broken?

• ECC (such as secp256k1 used by Bitcoin) is based on the elliptic curve discrete logarithm problem.

• Conventional computers require astronomical levels of computational resources to break it.

• But once stable quantum machines with thousands of quantum bits become available, Shor algorithm can be easily cracked.

Conclusion: ECC is a “disaster area” for quantum computing, and needs to be replaced by “post-quantum cryptography” in the future.

---In the future, it needs to be replaced by “post-quantum cryptography”.

3.4 Post-Quantum Cryptography

To meet the quantum threat, NIST (National Institute of Standards and Technology) has launched the Post-Quantum Encryption Standards Program, and has initially selected four algorithms to enter the standards development phase in 2022:

These algorithms will be the cornerstone of future blockchain, public key cryptography, and privacy protection.

3.5 Conclusion: What do we need to prepare for the “post-crypto era”?

What blockchain developers need to think about:

• Choose a chain or protocol that supports post-quantum algorithms (e.g. Ethereum has plans to do so).

• Focus on new crypto technologies like zk-SNARK, Mina, FHE, etc.

• Future wallet signature mechanisms may migrate to new algorithms such as Kyber/Falcon.

What the average user needs to realize:

• Wallet private keys need to be upgraded in the future, especially when using hardware wallets.

• Static encryption keys with a lifespan of more than 10 years are not recommended.

What is industry doing?

• Google has upgraded Chrome’s TLS encryption engine to support Post-Quantum Cipher.

• Signal, Apple also exploring “quantum-secure communication protocols.”

• National security agencies are beginning to stockpile “quantum-safe depository” solutions.

We are entering a new era of encryption, moving from classical cryptography to quantum cryptography, a revolution in computing power and trust. We are entering a new cryptographic era, from classical cryptography to quantum cryptography.

The future of blockchain is still cryptographic, but the cryptographic algorithms will change forever. Don’t ignore this change, it’s not the future, it’s the present.

3.6 What algorithms will the future consensus be based on?

Looking at the history of blockchain evolution, the consensus mechanism in the past decade has evolved from PoW (Proof of Workload) → PoS (Proof of Stake) → DPoS/BFT → PoH (Proof of History) from “security-first” to “performance-first”. The future consensus mechanism will not only be “security-first” but also “performance-first”. The future consensus mechanism will not only be an “algorithm” problem, but also a systematic project: it involves the comprehensive evolution of computation, communication, encryption, gaming, and incentives.

3.6.1 Trends in Future Consensus Mechanisms: Key Features

3.6.2 What algorithms might the future of consensus, be based on?

Combined Consensus

In the future, mainstream public chains may no longer use a single consensus algorithm, but dynamically switch or combine multiple mechanisms according to demand. For example:

• PoS + ZK (Zero Knowledge Proof)

• PoH + BFT (Solana model)

• PoS + DAG + BFT (e.g. Avalanche subnet)

Benefits: balances security, scalability and low latency, easy modular deployment.

ZK + Rollup + Recursive Proof Consensus

ZK (Zero Knowledge Proof) is becoming the core settlement logic of ecosystems such as Ether, and may be expanded to be part of the main consensus mechanism in the future:

• L2 commit state → generate proof using ZK

• L1 Verify ZK proofs only (no need to re-enact all transactions)

• Eventually Proof-of-Validity to replace traditional consensus recomputation

Polygon zkEVM, Scroll, StarkNet are all going this route.

AI + Adaptive Game Modeling for Consensus

As AI Agents become more involved on the chain, consensus mechanisms may be introduced in the future:

• AI-assisted validator selection

• Dynamic adjustment of weights and penalty mechanisms

• Parameter prediction and consensus selection based on game equilibrium

In this model, the chain’s consensus may be regulated like a “market” instead of fixed code logic.

DAG (Directed Acyclic Graph) and Asynchronous Consensus

Projects such as IOTA, Fantom, Aleph Zero, etc. have explored leaderless consensus mechanisms based on DAG:

• No more concept of “chain”, transactions form a graph structure.

• Asynchronous consensus, high throughput

• Asynchronous consensus, high throughput, can be combined with BFT consensus finality guarantee

The combination of DAG+ZK+PoS may be the ideal form for asynchronous parallel computing environment.

Intent-driven consensus: user perspective consensus

Projects such as Eigenlayer, Anoma, Espresso, etc. are working on “Intent Layer Consensus”:

• Consensus shifts from “sequentiality of transactions” to “order of fulfillment of user intent”.

• For example, if you intend to “exchange ETH for USDC”, the chain only needs to ensure that the final state is reached, not to execute each step sequentially.

This requires: “Intent gossip network”, “matchmaker”, “sequencer”.

Possibly based on BFT + MEV Auction + Rollup to accomplish this.

3.6.3 Underlying Algorithmic Foundations of Consensus Mechanisms

3.6.4 Summary: Future consensus is not just an algorithm, but an ecosystem coordinator

The future blockchain consensus mechanism may have the following shape:

• The bottom layer is PoS or modular execution layer

• The bottom layer is PoS or modularized execution layer, and the upper layer uses ZK, AI or Intent logic.

• Extended security through multi-chain consensus sharing (e.g. AVS / Eigenlayer).

• Quantum resistance and adaptive reward mechanisms.

The ultimate goal of consensus is not “everyone does the same thing”, but “everyone agrees on the outcome”. The future of consensus is the future of trust computing.

The consensus of the future is the reconstruction of trust computing, and the underlying logic of human, machine and chain collaboration.