What is Quantum Currency? How Will Quantum Money Affect Finance?
Over the years, we could observe the rapid evolution of the financial world. It is hard to imagine that not so long ago, the most common way to pay while making a purchase was to use cash. Nowadays, options are nearly endless. Want to pay with an app on your phone or Bitcoin wallet? Feel free to do so. However, even those supposedly modern solutions might become old-fashioned as new ones keep appearing on the market. One of them is quantum money. Let’s see what’s the buzz all about.
What is Quantum banking?
While in the standard model of banking, the money is real and is in the form of cash or assets, quantum finance takes a bit different approach. Quantum computing came into play as many financial players saw its potential to solve critical financial problems. Most of the banking activities, such as securities pricing, involve lots of assessing the potential outcome, and it happens with the help of algorithms and models of statistical probability. However, those solutions are not without a flaw, and, as the financial crisis from a decade ago shown, they can miscalculate the predictions.
Knowing that improved technologies are necessary to create an infallible system, some banks head towards quantum-based solutions which enable high-speed processing of vast amounts of data. Being able to analyze this data would bring many benefits, such as making more accurate calculations. That, in turn, would result in better decision making or improving the customer experience by presenting more relevant offers. Quantum banking, based on quantum computing, seems to be a pretty promising alternative for financial management as we know it.
What is the quantum money system?
While it’s hard to find a person who didn’t at least hear about cryptocurrencies, its scientific alternative is not yet so widely recognizable. It is about quantum money. The concept is similar, as both solutions adapt cryptography to provide a secure value transfer channel. However, based on quantum physics, the quantum money system applies ‘quantum bits’ or ‘qubits,’ so unlikely the traditional computing, it no longer relies on 0-1 system. In quantum computing, 0 and 1 can coexist simultaneously or even compose a kind of mixture. Moreover, this advanced system enables multiple running calculations that can differ even when input stays the same. Thus, it is much more reliable and forgery resistant than other systems.
Is the quantum financial system real?
If you wondered whether a financial system like that could be a real thing, then the answer is yes. Even though it might sound like some kind of science fiction to you, the QFS (Quantum Financial System) is a very genuine concept. The idea of implementing quantum money was initiated by Stephen Wiesner already in 1970. However, only recently, Chinese engineers decided to bring it to life, thereby causing others to follow them. The main goal of QFS is to replace central banking and enable precise and consistent integrity of the funds’ movement.
How quantum currency changed the banking and financial industry?
Over the last few decades, we could observe the financial world being influenced by emerging tech-based solutions such as Artificial Intelligence, Blockchain, Open Banking, or implementation of new directives such as PSD2. Although it is still in an early stage of development in the financial industry, the quantum currency has already brought some significant changes.
Those financiers who decide to bet on quantum computing stay ahead of the market competitors and are likely to deliver quite promising results. As you read this article, quantum analysts and specialists are implementing the QFS in many financial institutions. By testing algorithms and observing their influence, they can quickly discover that quantum-based solutions are game-changers in secure information flow. This technology enables banks and businesses to send data over a quantum network, which is impossible to hack. So, even though other instruments like Blockchain or digital identity were created to address the same need, some banks are already taking one more step forward and choose quantum instead.
What are the benefits of quantum currency?
We have already mentioned some advantages of quantum currency-based solutions for the financial world. Let’s now read about the details of the most important benefits.
- Effective data analyzing
By implementing quantum computing, financial institutions could significantly improve the analysis of large or unstructured data. That, in turn, would enable conducting calculations hundreds of times more accurately than other systems. Based on a tremendous amount of information, it would be possible to predict customer needs or future market tendencies.
- Top security standards
In a traditional system, safety standards are not very accurate. They rely on checking regular security features and revising bill’s serial numbers to avoid counterfeiting. The quantum currency system creates self-controlling protection against forgery with the concept of ‘qubits.’ They can exist in one form or another or be their mixture. Thus, a counterfeiter would encounter serious obstacles, and finally, he would get rejected by the central database.
- Improved customer experience
Customers are incredibly exacting when it comes to any financial business. With the technological advancement of today’s world, their demands rise too. While many companies lose their clients due to poor customer service, with quantum currency, you could keep the customers you already have and land an account. Quantum computing could be a game-changer in terms of a customer-focused approach. The data processed by the system would enable finding accurate models and patterns of client’s needs, which is not possible with traditional complex data structures.
Examples of quantum currency
Quantum-based computing, thanks to its properties, enables creating a unique currency that is impossible to clone, reproduce, or copy. Even if you try to read it, it won’t be possible to get the correct answer as quantum states fluctuate. For instance, quantum money mint could gather all the answers and perform as the primary verification system. Having that in mind, we can expect quantum money to be of use in many financial institutions faster than its technological peer, cryptocurrencies. For instance, some companies combine tech-based solutions like Blockchain and quantum currency to create a Quantum Resistant Ledger (QRL).
Another example where quantum would find its practical application is the internet itself. It would significantly overhaul the data flow possibilities of the internet as we know it. Thus, the technology would enable banks and companies to send information that is impossible to hack. Based on the quantum cryptography mechanic called quantum key distribution, all encrypted messages and their keys would be shipped separately, and its fabrication would result in instant destruction.
Future of financial industry in terms of quantum currencies
As we could see, the quantum currency system is already influencing many financial branches. Within the next decade, we should observe quantum computing become one of the mainstream tech-based solutions in the world of finance. Banks need to stay vigilant and test adopting quantum solutions to optimize their services as it could be crucial to answering future client’s needs.