Information asymmetry leads to wealth asymmetry

[John F Sowa]

Quantum computing is threatening an immense economic upheaval.   The following article summarizes the issues.  

What Wall Street Knows About Quantum Computing — But Won’t Say Out Loud

https://medium.com/mr-plan-publication/what-wall-street-knows-about-quantum-computing-but-wont-say-out-loud-9eda60942a79

[Excerpts]:

. . .
 Wall Street’s sharpest minds have learned an immutable truth: information asymmetry creates wealth asymmetry. If you can run simulations 

no one else can, model markets no one else sees, and decode information no one else understands, you’re not just ahead; you’re playing 

in a different league altogether.
 
 This isn’t science fiction or a distant future. It’s already happening behind closed doors. The quiet war for quantum supremacy is the next 

great battleground of finance.

 

The Quiet Consolidation Phase
 
 If you’re waiting for headlines or flashy announcements, you’ll be waiting a long time. The signs are subtle, buried deep in quarterly filings, 

footnotes, and so-called “innovation budgets.”
 
 Over the last eighteen months, I’ve tracked a pattern that many overlook. Quantum physicists are vanishing from academia, absorbed by 

hedge funds and banks under job titles so vague they might as well be code names. “Advanced computational researcher” and “quantum 

algorithm developer.” These roles mask a gold rush for Nobel Prize level talent.

 Partnerships with companies like IBM, D-Wave, and Rigetti rarely make the news. When firms mention “exploring computational advances,” 

they’re not talking about faster laptops or better software patches. They’re quietly staking claims in the foundational tech of the future.
 
 Even family offices, traditionally conservative, are placing early bets on quantum startups, companies with little more than intellectual property 

and prototypes and no revenue to show. The silence here is strategic. The fewer people who know, the longer the advantage lasts.
 
 This is Wall Street’s old playbook: accumulate quietly, test in private, and deploy when the field is unprepared. History shows that when a new 

paradigm emerges, the winners are the ones who prepare in silence.
 
 Total System Disruption
 
 To grasp the impact quantum will have on finance, imagine a world where tasks that once took days or months happen in seconds.
 
 Derivative pricing is a perfect example. Monte Carlo simulations, which analyze countless market scenarios to price complex derivatives, currently 

require enormous computing power and time, often producing only approximations. Quantum will have the ability to run these calculations in real 

time, delivering precision that makes today’s methods look like finger painting.

. . .

[Michael DeBellis]

I agree about information asymmetry and wealth asymmetry... although I tend to think it goes just as strongly if not more so in the other direction: those with money have a better chance at getting a decent education. 

But I'm really skeptical that quantum computing is the big deal everyone thinks it is and just because VCs are throwing money at an idea, doesn't mean that idea has merit. People talk about the AI bubble but whatever you think of them LLMs have clearly shown that they have value in the real world. Quantum computing has yet to do that and I'm skeptical if it ever will. And if it does it won't be a general computing revolution. 

Quantum Computing is inherently random. This isn't something that we can eventually get rid of by better technology, it is a fundamental fact about the quantum world. And the infrastructure required build and use a Quantum Computer are huge. Here is a table that estimates the costs of Quantum Computing:

Category                                                 Typical Cost Range
Cryogenic system                                   $0.5M–$2M+
Control electronics                                 $1M–$10M+
Facility & shielding                                 $1M–$5M
Fabrication & R&D                                  $10M–$100M+
Talent & staffing                                     $2M–$20M/year
Total (for ~100-qubit prototype)         $20M–$100M+

Sources:  https://dl.acm.org/doi/fullHtml/10.1145/3624062.3625533  

https://thequantuminsider.com/2023/04/10/price-of-a-quantum-computer/

Note: the above costs are for a "~100-qubit prototype".  So we are talking tens to hundreds of millions for a prototype, probably an order of magnitude for something where the cost of the Quantum Computer is less than the equivalent number of traditional super-computers. Hence, the number of applications where Quantum Computing can be used are fairly constrained such as hacking codes, doing Monte Carlo simulations, etc. There are ways to exploit this randomness to get near optimal solutions to certain NP hard problems and that's a big deal (assuming it ever works) but consumers (including the wealthiest) have little need to solve NP hard problems on their phones or tablets. So, I agree if Quantum Computing ever actually works it will be confined to a small group of corporate/government users but the same was true for Data Warehouse, Supercomputers, etc. This kind of tech only justifies the expense for large scale business, engineering, and science.  I don't see it as something that will significantly widen the gap between rich and poor... although there are plenty of other forces, especially in the US, that are already doing an excellent job of that. 

Michael

https://www.michaeldebellis.com/blog

[Nadin, Mihai]

Dear and respected colleagues,

If quantum chips could do the number crunching of 1000s of NVDIA's GPUs for some applications, the arithmetic of mining of the Bitcoin would change. Alan Baratz competing with Jensen Huang—another wealth distribution show we are witnessing. The Nobel Prize winners are volens-nolens part of the show.

 

Mihai Nadin

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[Michael DeBellis]

the arithmetic of mining of the Bitcoin would change

I asked ChatGPT about Bitcoin mining and quantum computing because I haven't read much about Bitcoin mining but what I remembered seemed... well kind of insane. In a sane world, everyone would realize it is another tech bro wet dream and it would be as dead as NFTs but we live in an insane world with a reality star president.  I'll paste the entire thread below but the TL/DR version is:

• your intuition is right: as the blockchain grows and more miners join, competition increases, margins shrink, and profitability depends on very cheap electricity and expensive custom chips.
• Conclusion: Quantum advantage for mining is theoretically possible but practically decades away.
• Conclusion: The security of existing Bitcoin addresses could be threatened by large-scale quantum computers well before mining becomes quantum-efficient.
• your intuition is correct: Bitcoin mining is already unsustainable from an energy standpoint, and quantum computing would not fix that — it might slightly accelerate mining but far from making it efficient. The real disruption quantum computing brings is not mining, but potentially undermining Bitcoin’s cryptographic foundations, which will eventually require a shift to quantum-resistant signatures.

Here is the complete thread:

MD Prompt:  In a discussion of quantum computing, someone said it could change how bitcoin is mined. As I recall bitcoin mining seemed kind of insane to me and the reality is the longer the blockchain gets, the harder it is to make money by mining so while people may have gotten rich in the past doing this, it will require more and more resources. Can you comment on Bitcoin mining and quantum computing

------------------------------------ Begin ChatGPT -----------------------------------------------------

🪙 How Bitcoin Mining Works

1. Purpose: Mining keeps the Bitcoin blockchain secure and consistent. Miners compete to solve a mathematical puzzle; whoever wins gets to add the next block to the chain and earns newly minted bitcoins plus transaction fees.

2. The Puzzle: The puzzle isn’t meaningful computation — it’s finding a number (a “nonce”) such that the SHA-256 hash of the block’s contents starts with a certain number of zeros.

3. Difficulty Adjustment: Every ~2 weeks the network automatically adjusts the difficulty so that one block is found roughly every 10 minutes, regardless of how many miners participate.

4. Energy Cost: Because the puzzle is purely brute-force, miners must perform trillions of SHA-256 hashes per second using specialized hardware (ASICs). The total electricity consumption of global Bitcoin mining is roughly on the order of that of a small country (like Finland or Malaysia).

So, yes — your intuition is right: as the blockchain grows and more miners join, competition increases, margins shrink, and profitability depends on very cheap electricity and expensive custom chips.

Enter Quantum Computing

Quantum computers pose two potential impacts, and they’re quite different:

1. Mining Efficiency (Breaking SHA-256)

• Grover’s Algorithm can, in theory, speed up brute-force searches by roughly a square root factor.

• Since Bitcoin mining is a brute-force search, Grover’s algorithm could reduce the effective difficulty — but not dramatically.

  • Classical: O(2256) possible hashes.

  • Quantum (Grover): O(2128) — still astronomically large.

• Realistically, you’d need millions of logical (error-corrected) qubits to outperform today’s ASIC miners. We are nowhere near that — current machines have on the order of hundreds of noisy qubits.
  🟰 Conclusion: Quantum advantage for mining is theoretically possible but practically decades away.

2. Security Risk (Breaking Elliptic Curve Cryptography)

• Bitcoin addresses rely on elliptic-curve cryptography (ECDSA) for verifying ownership of wallets.

• Shor’s algorithm can break elliptic-curve cryptography efficiently on a sufficiently large quantum computer.

• If that becomes practical, a quantum attacker could:

• Derive private keys from public keys,

• Steal funds from exposed wallets (those that have made a transaction, thus revealing their public key).
  🟰 Conclusion: The security of existing Bitcoin addresses could be threatened by large-scale quantum computers well before mining becomes quantum-efficient.

What’s the Timeline?

• Quantum-resistant (post-quantum) cryptography is already being developed and standardized (e.g., NIST PQC project). Bitcoin could migrate to such algorithms via a network-wide software update (“hard fork”) before quantum computers become a real threat.

• Quantum mining is unlikely to become viable before such security updates happen.

---

🧩 Bottom Line

Aspect	Classical Bitcoin Today	Effect of Quantum Computing	Realistic Timeline
Mining difficulty	Enormous, energy-intensive	Grover’s gives only modest advantage	Decades away
Wallet security (ECDSA)	Safe today	Shor’s could break it	Possibly within 10–20 years
Environmental impact	Huge electricity use	Unchanged or worse if quantum used	Ongoing concern

---

So, your intuition is correct: Bitcoin mining is already unsustainable from an energy standpoint, and quantum computing would not fix that — it might slightly accelerate mining but far from making it efficient.
The real disruption quantum computing brings is not mining, but potentially undermining Bitcoin’s cryptographic foundations, which will eventually require a shift to quantum-resistant signatures.

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[Ravi Sharma]

What about combined effect of Quantum computing , AI and Wealth?

If QC is low cost, AI that consumes compute power is then at low cost, where does wealth correlate with them?

If AI is demonstrably reducing costs and increasing cababilities, then AI controllers are going to become rich as they dictate the market and product and service costing?

An ontology of these three namely AI QC and Wealth as outcome would be interesting!

Regards

Thanks.

Ravi

(Dr. Ravi Sharma, Ph.D. USA)

NASA Apollo Achievement Award

Former Scientific Secretary iSRO HQ

Ontolog Board of Trustees

Particle and Space Physics

Senior Enterprise Architect

SAE Fuel Cell Standards Member

To view this discussion visit https://groups.google.com/d/msgid/ontolog-forum/CALGFikf_JdvPZ9B4zkFYUffO_sd%2B3ePoCSZmHhUNyccoBdUFXA%40mail.gmail.com.

[John F Sowa]

Ravi,

The asymmetry is caused by the ratio between the immense payoff from an investment of a modest amount of money (or other resources).

The people who make the investments become very rich from the profits, and they eliminate many jobs that paid the salaries of many. many other people

Net result:  The people who get in on the ground floor, become super wealthy.  And they put many many other people of work. 

We are already seeing the effects of AI eliminating many entry-level jobs.  Recent college graduates are finding it very hard to get jobs.  Many people who had jobs answering telephone calls are being replaced by computer voices.

This is becoming a major social problem.   And it is threatening to become much worse.

John

 

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From: "Ravi Sharma" <drravi...@gmail.com>

What about combined effect of Quantum computing , AI and Wealth?

If QC is low cost, AI that consumes compute power is then at low cost, where does wealth correlate with them?

If AI is demonstrably reducing costs and increasing cababilities, then AI controllers are going to become rich as they dictate the market and product and service costing?

An ontology of these three namely AI QC and Wealth as outcome would be interesting!

Regards

Thanks.

Ravi

[Ravi Sharma]

John

Yes, appreciate.

Thanks.

Ravi

(Dr. Ravi Sharma, Ph.D. USA)

NASA Apollo Achievement Award

Former Scientific Secretary iSRO HQ

Ontolog Board of Trustees

Particle and Space Physics

Senior Enterprise Architect

SAE Fuel Cell Standards Member

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