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Recently, Alphabet, Inc. (GOOGL) announced it will release the Chrome Canary browser to experiment with post-quantum cryptography through deploying the "New Hope" post-quantum key-exchange algorithm. The plan is to run Chrome Canary experimentally for the next two years.

Specifically within Chrome Canary, Alphabet is switching the TLS web encryption in a test portion of Chrome installations and Google services from elliptic curve cryptography, a common form of encryption for all intents and purposes unbreakable for normal computers, to a protocol that adds a new encryption type known as Ring Learning With Errors or Ring-LWE. The test is to determine whether the Ring-LWE technique will be resistant to quantum code-breaking (which elliptic curve cryptography is not).

In conjunction with NASA, Alphabet is operating adiabatic quantum computing systems developed by D-Wave that will play a critical role with Chrome Canary. D-Wave raised $23.1 million in January 2015 from unknown investors, and has received a total of $139 million in funding from a variety of investors, including Goldman Sachs Group Inc. (GS), In-Q-Tel (the investment arm of the US Central Intelligence Agency), Bezos Expeditions (the investment arm of Amazon.com Inc. (AMZN) founder Jeff Bezos), and BDC Capital, Harris & Harris Group, and DFJ. D-Wave has shipped a quantum machine that sports 1,000 quantum bits, or qubits, and is arguably on the bleeding edge of quantum computing.

So, if quantum computing is an area where research has been underway for over 30 years with only modest commercial development to date, why all the excitement over Chrome Canary? The primary reason is prophylactic as vast amounts of current encrypted data can be stored and decoded with future generations of quantum computing systems. In other words, future quantum computing systems are expected to be used to retroactively hack the present.

Note that, based on its own assessment of near-term risks, the National Security Agency (NSA) Information Assurance Directorate issued an advisory in July 2015 to government agencies and private companies to begin the transition to quantum-resistant cryptography (see: US Committee on National Security Systems (CNSS) Advisory Memorandum on Information Assurance 02-15 (CNSSAM 02-15)). Clearly, among others, the NSA will be watching the progress of Chrome Canary's "New Hope" algorithm with great interest.

GOOGL Efforts Part of a Broader Effort

With the long-running development effort around quantum computing, it is worthwhile to note that Alphabet's Chrome Canary is only one instance in a far broader effort. Some estimates are that quantum computing will offer a factor of 34 million speedup compared to conventional binary CPU architecture.

Microsoft Corp (MSFT) has organized Microsoft Station Q for its quantum computing research and funded efforts at various external institutions such as Purdue University to complement its own internal development. International Business Machines (IBM) has a long-standing interest in advancing computing architecture as indicated by the $1 billion spent to fund the massively parallel BlueGene supercomputer effort from 1999. Some estimates are that quantum computer deployment will require substantially greater investment levels.

Intel Corp (INTC) has allocated $50mm to support research at Delft University of Technology's QuTech initiative over the next decade. Intel engineers will coordinate with QuTech specifically in manufacturing, electronics, and architectural expertise to reduce the size of the electronics gear required for quantum computing which it can then supply. The likely evolution of quantum computing, when it becomes more economically viable, is as a coprocessor for conventional systems.

Apart from these various company efforts, the Quantum Wave Fund is raising up to $100mm to invest in startups related to quantum computing. At the same time as the Chrome Canary announcement, post-quantum cryptography startup PQ closed a $10.3mm funding round.

While quantum computing is not a consumer development that will be integrated in consumer devices such as smartphones, it will make for a much faster user experience.

Meanwhile, as Johns Hopkins University cryptography professor Matthew Green notes with regard to Chrome Canary, "Everything we use today is about to be broken, and we know it. The fact that we’re actually making progress in dealing with this is really heartening. It’s nice to know that some people aren’t waiting, they’re doing something now.” Were Ned Stark's Winterfell located in Mountain View, CA, the watchword would be "Quantum Computing Is Coming." The future draws near, time to get ready.

Disclosure - Ownership: Personal: PYPL Family: AAPL, INTC, MSFT, PAY Firm: AAPL, INTC, MSFT

About the author: 

David Garrity is Principal of GVA Research, a New York-based consulting firm. He has more than 25 years of experience in the financial services industry. He has served in many senior roles including CFO and Board Director for both publicly-held and private companies, and has extensive experience in several disciplines including advisory, operating and research. David is a thought leader in technology sector developments and their application to the broadening of the financial sector, as well as in the areas of banking and finance, capital markets, and technology innovation. He is a sought-after advisor for technology companies and consults with The World Bank Group on financial inclusion and mobile technology, as well as the development of technology strategy for health initiatives in southern Africa. His paper on mobile money and disaster relief is published in "Technologies for Development: What is Essential?" (Springer Verlag, June 2015). You can find him on LinkedIn here and follow him on Twitter @GVAResearch.