Quantum computing is fundamentally changing data security. Experts predict that within the next ten to twenty years,1 quantum computing will have the capacity to break encryption methods commonly used today to secure personal data. The risk? Encrypted data stolen today may become readable in the future.
Lawyers and businesses must understand the basic principles of quantum computing, how it will affect encryption, privacy, and data security, when it will have the capacity to break encryption, and what they should do now to prepare. Although a very complicated area of study, we will provide a simplified explanation, and some key terms needed to understand the basics of quantum computing.
What is Quantum Computing?
Quantum computing is a field of computer science and engineering that uses quantum mechanics and algorithms to solve complex problems.
Why is Quantum Computing Different?
Because quantum computing can compute using qubits in superpositions, for certain types of problems, quantum computers have the capability to process more complex issues more quickly than conventional computers. For more on qubits, see the Technical Primer, below.
How Does Quantum Computing Threaten Encryption, Privacy, and Data Security?
To understand why quantum computing will impact encryption, privacy, and data security, it is important to also understand the fundamental basics of encryption.
What is Encryption?
Encryption is a data security method commonly used to secure browsing, messaging, and e-mail connections, data transfers, mobile and IoT devices, and even medical and financial records. The process uses algorithms to transform readable data into ciphertext (aka the encrypted text) that can only be restored using the proper decryption key(s). There are two main types of encryption - symmetric and asymmetric. However, symmetric and asymmetric encryption are not equal in this fight against quantum computing.2
Symmetric encryption uses one key. It works by feeding the plain data text and the key through the encryption algorithm, transforming it into ciphertext. This method can be strengthened by using a longer key.
Asymmetric encryption uses two keys, a public key and a private key. The data is encrypted using the public key but can only be decrypted using the private key.
Why are RSA and ECC Vulnerable to Quantum Computing?
Two specific asymmetric encryption methods – RSA and ECC – are at risk here. These encryption methods were designed to be secure. Because of their “computational hardness assumption” today, they are considered nearly impossible for a human to crack, even with the help of a conventional computer. However, RSA and ECC are now vulnerable to quantum computing threats because quantum computers use Shor’s Algorithm to efficiently solve the mathematical problems these encryption systems rely on for security.
When Will Quantum Computing Break Current Encryption?
Although quantum computers are gradually becoming available through research platforms and cloud services, there is currently no quantum computer with sufficient computational power to break RSA or ECC encryption. However, that day is quickly approaching, and is often referred to as Q-Day.
What is Q-Day?
Q-Day refers to the day when quantum computing can break public-key cryptography.
What is the Quantum Computing Development Timeline?
IBM is working towards creating a 100,000-qubit system by 2033,3 meaning Q-Day could be a mere seven years away.
Why Start Preparing Now?
There are two main reasons: “harvest now, decrypt later” and implementation.
What is “Harvest Now, Decrypt Later?”
Commonly referred to as “harvest now, decrypt later,” is the idea that although the technology does not currently exist to decrypt RSA or ECC encryption, bad actors can to collect (aka harvest) vast amounts of encrypted data today in anticipation of future decryption technology. Bad actors are not waiting for Q-Day, so lawyers and businesses should not wait either.
Why Does Implementation Take So Long?
Implementation of post-quantum encryption will take time, resources, and collaboration. Businesses will need to assess their current data security practices and policies, obtain buy-in, approval, and resources, develop an understanding of quantum-resistant cryptography, and plan for the technical and logistical aspects of implementation. Because implementation takes time, businesses should begin acting now rather than waiting for a threat to materialize.
What Should Lawyers and Businesses Do Now to Prepare?
Lawyers should:
Address post-quantum encryption in B2B contracts.
Many service agreements remain active for five or more years. Addressing “cryptographic threats” and “post-quantum encryption” in agreements today makes them more future-proof and reduces the risk of vendor or supplier disruptions down the line. Consider the following potential additions:
- Consider adding provisions requiring vendors and suppliers to implement and maintain NIST-aligned post-quantum encryption standards.
- Consider adding “cryptographic threats” to security, audit, and breach monitoring obligations.
- Consider adding “encrypted data” to breach notification requirements.
- Consider adding “post-quantum computing and encryption” to training requirements.
- Consider adding timelines for post-quantum computing migration.
- Consider lengthening confidentiality periods.
Review data retention policies.
If businesses have not reviewed their data retention policies in some time, now is the time to do so. Lawyers should help businesses review their policies and practices to ensure they are not retaining unnecessary data or retaining data longer than necessary.
Consider Data Breach Notification Implications.
Currently, most state data breach notification laws contain an encryption safe harbor – if the data subject to the breach is encrypted and the encryption key has not been accessed, notification is not generally required. However, as discussed above, the encryption key may not be needed in the future, raising the question of whether the intent of the safe harbor is undermined. Although there is no clear answer, quantum computing could affect how these laws operate in practice. Lawyers should monitor legal and regulatory developments and consider whether changes to incident response plans or breach notification procedures are warranted.
Businesses should:
Evaluate potential vulnerabilities.
Assess current data security practices and inventory cryptography across all systems and products. Identify what encryption methods are currently being used and which may be at the highest risk. Determine whether the security of highly confidential or sensitive data depends on potentially vulnerable encryption methods.
Develop a risk-based approach.
Unless a business has unlimited resources, it will likely need to take a risk-based approach. When developing that approach, consider factors such as the risk of “harvest now, decrypt later,” sensitivity and longevity of data, the vulnerability of algorithms, the criticality of systems, business impact, and practical constraints.
Identify vendor and supplier dependencies.
Inventory which vendors and suppliers are critical to the business’s operations. Assess each vendor’s and supplier’s readiness to adapt to a post-quantum computing environment by requesting roadmaps, monitoring adoption of NIST standards, and evaluating crypto agility.
Get buy-in.
Many businesses are currently focused on GenAI, so quantum computing may not feel like a business priority. A project of this scale will require buy-in from various stakeholders, including IT, information security, privacy, legal, and compliance. Ensure stakeholders are involved early and identify a project champion.
Understand quantum-resistant cryptography
NIST has released three finalized and two draft post-quantum cryptography standards intended to combat quantum computing vulnerabilities. These include:
Understanding these standards and considering the use of hybrid cryptography will help teams begin developing a migration and implementation plan.
Develop a migration and implementation plan.
Migrating products and systems from legacy encryption to post-quantum encryption will take time and significant technical and logistical planning. Ensure that all relevant stakeholders participate in this planning process.
Implement crypto agility.
If a business has hardcoded cryptographic algorithms, consider modifying systems and products to allow algorithms to be updated without any major system changes or rewrites. This will allow the business to adapt more quickly as the post-quantum computing landscape evolves.
Reassess cyber insurance coverage.
Take this opportunity to reassess internal cyber insurance coverage to confirm it remains adequate. Additionally, consider whether requirements for vendors and suppliers should be updated.
Quantum computers capable of breaking public-key cryptography may still be years away. But the transition to quantum-resistant cryptography will take significant planning, technical changes, and coordination. Businesses that handle vast amounts of data should begin evaluating their cryptographic infrastructure now. Lawyers should begin future-proofing contracts and evaluating the implications of breach notification obligations. Waiting until Q-Day arrives will almost certainly be too late.
Appendix: Technical Primer
What are Qubits, Superposition, Entanglement, and Interference?
While conventional computing uses ‘bits’ to process information, quantum computing uses ‘qubits.’ A qubit, unlike a bit, can exist in a combination of both 0 and 1 states simultaneously (called a superposition). When multiple qubits are combined, the number of possible states they can represent grows exponentially. While combined, qubits can interact with other qubits and share information (called entanglement). When qubits exist in superposition, their quantum states behave somewhat like waves. These states can interact in ways that increase or decrease the probability of certain outcomes (called interference).4
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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