Good morning and welcome everybody. My name is Derrick and I would like to thank Andrea and Bertolt for this invitation to spend some time with you today. This is my second time speaking at a KuppingerCole event. I recognized some of you from Frankfurt last year, Impact Day, and it's great to be here in Berlin. I've had a fantastic few days in Berlin, very good to be here.
As I said, my name is Derrick and I'm co-founder of the Quantum Core Institute along with my partner Bryant. The Quantum Core Institute, our mission is to help organizations manage quantum risk. We provide advisory services, training, we provide simulators, and we've also published recently a quantum standard, and I invite you to download the standard and we'd welcome feedback on our quantum standard. We think it's very important that a standard is published and recognized, and I look forward to hopefully getting some feedback on our standard from you. Welcome to those of you online as well.
I'm also a security, just by way of introduction, I'm also a security consultant. I've been in consulting for 25 years. I started my career in South Africa many, many, many years ago with Anderson Consulting, which should tell you how long I've been working for. I moved to the US about 20, 22 years ago. I ended up in Atlanta and I'm based in Atlanta. I'm also an instructor at Kennesaw State University in Atlanta. I teach various topics on security, digital forensics, and we are also in the process of looking at starting a quantum laboratory too.
Brian, would you mind giving a brief introduction? Sure. My name is Brian Ilson and I'm the co-founder also of the Quantum Core Institute. As you can actually see up here, a little bit about me. I'm a serial entrepreneur, but a lot of the things that I do all revolve around risk management, and the Quantum Core Institute is exactly that. It's a quantum risk management advisory firm. But I also have founded the Satoshi Institute, and I'm the author of the Bitcoin Treasury Playbook. Since I've scanned all of you so far, all of you will receive my forthcoming book on the Q-Day Clock.
So that book will be published by, I'd hoped to have it published before the conference here, but it's taken a little bit longer than I anticipated. But all of you will have then access to that for free. I've written a number of books. I've been in the emerging technology space for the last 20-25 years. So with that, Derek, go ahead. Thank you.
Okay, we invite you to join the Vivox voting session because we've got a very, very important poll coming up, and we'd be grateful if you join the session and vote on this poll. Sorry about that. It's really easy. You scan that QR code, and then basically what happens is it'll open up an application, and as we go through some of the questions, you'll be able to vote on them. So we actually get a poll from you, the audience. And for those of you online as well, please feel free to join our Vivox poll. All right. For the most important question of the day, why don't we start with this one?
Let's see who the audience thinks is going to win the tournament next month. Oh, what a pity. That is unfortunate.
Bright, could you see if you could reset the poll? Um.
Well, then let's go to plan B. Not your account, I can't. Okay. Let's go to plan B. Germany? I'll put in the US and South Africa because obviously I'd like one of those two to win. France or Spain? Which one? France?
No, just kidding. Brazil or Argentina? Okay. And England, Croatia or Senegal? I'd love to see a team from Africa win it eventually.
Croatia, there, my friend from Croatia. Portugal, the Netherlands or Belgium? Nice. Okay.
And other, there may be a, okay, who is it? Colombia, yes. Okay. They've gone far before, right? Okay. We'll enjoy the tournament. Now on to quantum. Let's talk about quantum. The presentation is divided into four parts. We'll talk about post-quantum cryptography, the legal and regulatory landscape. It's very important to understand the legal and regulatory implications of post-quantum cryptography. We want to introduce the standard.
I've mentioned that we have a standard, a quantum standard, and we'd like to introduce the reasoning for the standard, why we built the standard, the purpose of the standard. And again, we're going to remind you to please download the standard for free from our website and feel free to comment on that. And then we're going to wrap up with the conclusion. I'd be very surprised if this poll worked.
Now, let's see. I did, yes, last night. Not working? Okay. By show of hands, and of course, it's unfortunate that our friends online can't participate, but by show of hands, do we have some diversity in industry here? Financial services? Great. Healthcare? Great. Great. Healthcare? If this was in the US, we'd have healthcare thoroughly represented. Okay. What about public sector? Very interesting perspective on post-quantum cryptography. Industrial and manufacturing? Great. Transportation, tech, or other?
Okay, so we've got some diversity. It's always good to see that diversity because we believe that the post-quantum cryptography is a phenomenon that's going to affect all industries, both in the public and the private sector.
Now, let's just ask this perhaps rhetorical question. Are your identity systems fully protected against classical? We haven't even started talking about quantum attacks. Let's talk about classical attacks. Are your systems fully protected against classical attacks? And I notice the lady in the audience is nodding her head. That's very pleased to see that. How about you at the back?
Sir, your system's fully protected against the classical attacks. You're fairly confident. You'll never be breached using classical technology.
Okay, I like that confidence. We know that some organizations are not fully protected against classical cybersecurity attacks. We hear of breaches every day.
Banks, hospitals, car manufacturers in the UK recently. So this is something that is ongoing. Organizations have to deal with classical cybersecurity attacks all the time. And now what's happening is they're presented with the prospect, the potential for quantum cybersecurity attacks as well. Let's talk about post-quantum cryptography. What on earth is post-quantum cryptography? When we think about the trust model, what guarantees our security? What guarantees that you and I can do online banking? Or you and I can log on to register for this conference?
Or you and I can do, we've got some academics in the audience, that you can teach online just like I do and safely secure your students' information. I call it the trust model, the foundation of trust. And there are five elements of this model, each of which is threatened by a quantum attack. And if one of these elements is broken, then the trust model collapses entirely. So we talk about confidentiality. Information is accessible only to authorized parties.
Of course, with GDPR in Europe, that's an enormous regulation. We talk about integrity, that data represents what it should represent, that it hasn't been compromised in any way. I tell my students at the university, do you want your grades to represent your actual grade when it comes to the end of the term? Do you want your bank account balance to represent your actual bank account balance? We've got to ensure integrity in our information. Availability, is information and is the system available, accessible when we need it?
Authenticity, the identity of the users and the origin of data can be verified and trusted. And finally, non-repudiation. This means a party cannot deny that they sent or received or operated on any information. These five elements, we call them in the US, the CIA triad. This is actually the extended CIA triad. It started with the first three. And what this means, what this presents to us is, if any one of these is threatened or compromised, the trust model collapses entirely. These typically rely on multi-factor authentication, encryption, identity and access management.
All of these support this trust model. And again, if any one of these is compromised, the entire trust model collapses. So what is post-quantum cryptography? Let's talk about post-quantum cryptography. The problem that we faced with nowadays is that today's public key cryptography relies on mathematical problems. We've been using the same cryptography for decades and it's been keeping us secure. It's been keeping our data confidential. It's been ensuring integrity. It's been ensuring availability of that data.
It's been ensuring accessibility of the data and it's ensuring non-repudiation of that data. And it relies on mathematical models. It relies on mathematical algorithms. That typically, a classical machine might take hundreds of thousands of years, if not millions of years to solve.
However, a sufficiently powerful quantum machine will be able to solve those algorithms relatively quickly within days or possibly hours or even minutes, depending on the power of the machine. Now, the estimates range from when a machine will be delivered, will be available from 2029 to 2035. There's some estimates that are on the low end, 2029, and there's some estimates on the high end. And then there's some skeptics out there who completely are cynical about a quantum machine being developed that will actually break current encryption in our lifetime.
My response when I have these debates or conversations or arguments, in some cases, with some of my friends in industry is, can we afford to be wrong? Can we really afford to assume that a quantum machine will never be developed? And can we ignore the problem? Compounding the problem, making it infinitely worse, is that migration for a typical enterprise can take up to 10 years. So this isn't just switching out one system or one server. This is routing out every bit of cryptography in your enterprise, some of which is hard-coded and replacing it with something that is quantum safe.
And that's what we talk about when we mention post-quantum cryptography. It's replacing our current cryptography with algorithms that are safe, assumed safe from quantum attack. So the solution is post-quantum cryptography. It uses mathematical as well as physical properties to secure our information.
NIST, the National Institute of Standards and Technology in the US, you may have heard, published four quantum safe algorithms in August of 2024. And hopefully with these algorithms, if once organizations move to implementing these algorithms, we'll be in a position where we can assume that these new algorithms are quantum safe. But there's a bigger problem. And this is sometimes underappreciated. And this is called harvest-now-decrypt-later. Any data that is harvested now, that is lost in a breach, until fairly recently, we can assume, because it's been encrypted, that it's safe in perpetuity.
It's safe forever. It's always going to be encrypted. The problem, of course, is some of these are adversaries, some of these bad actors, these nefarious actors, particularly in nation states, if they get their hands on a quantum machine in the future, they're sitting on vast troves of encrypted data, but it's been expropriated, it's been stolen. And when they get quantum machines, they'll be in a position to then decrypt that data.
Now, is that a problem? Well, some of that data is highly sensitive. National security secrets, for example, healthcare records.
Again, does GDPR really make the distinction between, wait a second, this was harvested five years ago or 10 years ago? It doesn't matter. The organizations, the institutions still have the obligation to keep it secure.
Again, we can refer to the window. Anywhere from about 2030 to 2035 is the estimate of when a quantum machine will be available to break current encryption. Meaning today's data is at risk. If your iPhone or your Android gets hacked today and the data's stolen, even if it's encrypted, potentially can be decrypted when the hacker gets access to a quantum machine. It gets a little more complicated than that because we talk about industrial control systems, we talk about utilities, we talk about avionics.
There's a whole class of hardware out there with hard-coded cryptography that may need to be replaced as well as part of PQC. I've included this slide because I think it's important to understand what big tech is doing in this market right now. Big tech has got the capability of moving markets. If Google and Facebook and Microsoft decide to move the market, they're more than capable of doing so.
Now, some of you may argue that big tech is in it for commercial reasons, right? To make money. And I would agree with you. I certainly wouldn't disagree with you, but I would add to that that big tech is also in it to ensure that their systems and their client systems are secure. Bryant and I use Google Cloud, for example. As a client of Google, we want our data to be secure in Google's storage, in Google Cloud. Google wants it to be secure.
Now, there may be solutions and services that Google develops to help their clients and to help themselves, and I'll grant them that. I don't have a problem with them doing that. They may have a commercial interest, but they've also got a security interest. And it's quite interesting to see what big tech is doing in PQC. Google has committed to fully migrating their systems to be quantum safe by 2029. And I'd like to clear up perhaps a misperception. They did not say that a quantum machine is going to be available in 2029.
What they said was that's their internal deadline for being quantum safe under the assumption that it is possible that a quantum machine will be here by 2029. They're very clear on this. They're not telling everybody that a quantum machine will be here. Based on their analysis, their research, their quantum machine, their quantum chip, Willow, they took the view that they've got to be quantum safe. Everything. Google Cloud, Chrome, Gmail, Android, everything needs to be quantum safe by 2029.
And again, we clients of Google, so I'm very reassured to hear that. Apple is moving to quantum safety from 2027 and beyond. If any of you use our message now, that is quantum safe. That is considered quantum safe right now. I think Apple's migration window is going to be a little longer than that. That's going to go into the early 2030s.
Microsoft, they would like their full enterprise suite to be quantum safe by the early 30s as well, 2032. They've got a little more complex problem to deal with in Google. They've got Microsoft installed on desktops throughout the world, some of which is outdated. And on servers throughout the world, they still have got Microsoft Exchange out there in industry. So they've got a little different challenge, of course, than Google. But they've committed to being quantum safe in the early 2030s.
Meta, I know in Europe, everybody uses WhatsApp. Billions of us are going to be quantum safe in early 2030. Now our data is encrypted on WhatsApp. Don't get me wrong, it's end-to-end encryption now, which means it's relatively safe now, but the data at rest can be harvested and it is not quantum safe. And Amazon, the full Amazon web services platform is again expected 2030.
Now again, the reason we include the slide in this presentation is to show you what big tech is doing for what it's worth. I know there are some of us out there who are contrarians when it comes to what big tech does or cynics when it comes to what big tech does, but they are certainly moving in the right direction as far as we are concerned in terms of moving to quantum safety. I'd also like to talk about what AI is doing in this space. This is very important because all of us are consumers of AI, we use AI, we upload data to AI.
Google, as mentioned, all Google, Gemini and the entire Google platform will be quantum safe by 2030, by 2029 actually, very impressive. Anthropic, Claude, they rely on protection in the cloud platforms and the infrastructure that they use and they're very discerning in terms of the choice of cloud. They use Google Cloud, of course, and AWS, but they also want to be fully quantum safe in 2030.
Open AI, again, they're going to be following Microsoft's quantum safety journey. And then XAI, nothing public about what their intentions with PQC are. The greatest risk to cybersecurity, and I know you can't vote on this probably, but traditional threats, current AI, frontier AI, or quantum threats. By show of hands, traditional cybersecurity threats, I know this lady and that gentleman are confident that they're immune to classical attacks. Current AI? Yes. Frontier AI, Mythos, for example. Thank you. And any takers for quantum threats?
Ah, even better. I wish I had the actual data. Let's talk about this for a minute because I had a spirited debate with a colleague of mine and he was saying, systems like Mythos are the existential threat to cybersecurity. It's not quantum. His view was it wasn't quantum. And it occurred to me when I was flying over here from the US that I do need to address this. Is that the bigger threat or is quantum the bigger threat? And my conclusion was there are different types of threats. They are remarkably different types of threats and both of them are major threats.
Anthropx Mythos is a tactical threat. It's an immediate threat, right? Anthropx Mythos is an advanced AI model. I've been in software, I've been in technology for a long time and I've never seen anything like this. I've been in security for a long time. I've never seen anything like this. It's almost, it's such an imposing challenge what it can actually do. It's got the capability of jumping virtual machines. It's got the capability of jumping from sandbox environments to production environments. It's got the capability of understanding developer intent.
It can search and scan code bases and understand what the software engineers and the coders wanted to do. It can identify vulnerabilities and it can identify and join vulnerabilities to compound the effect of those vulnerabilities. It is the most remarkable, I think, piece of software that I've ever seen in my career.
Fortunately, it is constrained within Project Glasswing, within Anthropic, and supposedly the bad guys don't have access to it yet, but some of its competitors are being leaked to the market and Anthropic themselves have said eventually something like this will be available to all of us. Now, the good news here is it can be used for defense as well as offense, right? AI can be used for defense and offense. So we can use it to help defend our systems just as well, if not better, than the nefarious actors can use to attack our systems. I'll give you an example.
The way I look at Mythos is it unlocks one key to one bank vault in one bank. Now, it could do that now. Remarkable.
I mean, it found vulnerabilities in Linux code 25 years old that no human could possibly have found. Now we move on to quantum computing. This is the strategic threat. This is the long-term threat. It's a different altitude to the Mythos threat. As we've mentioned, a computational paradigm that uses quantum physics to solve mathematical problems. The threat horizon is much longer, five to 10 years. We've described that already.
And again, there's some people out there who are skeptical of that as well. But it will render our current cryptography completely useless, completely useless. And the example I like giving here is it unlocks all keys.
Sorry, it unlocks all keys to all bank vaults in the world. It's a completely different paradigm. It's less targeted. It makes everything obsolete. It makes everything compromised.
Now, when we talk about AI, it's important to understand what AI does to PQC, to our journey of PQC. And I think it's very clear we can use AI to accelerate, to improve, to amplify, to compound our journey to PQC. Algorithm design, crypto analysis, verification, proof verification of the strength of some of our algorithms. We can use it for performance tuning. Tactically, we can use it to inventory all our cryptography. We are using cryptography, as I said, that is decades old. Digital certificates, signatures, algorithms themselves, keys, some of which 25, 30 years old.
We need AI to help us get the inventory, tell us what we have, where we have it. And then, of course, we can use AI to help us get to this hybrid where we've got a classical algorithm and we've got a quantum algorithm to help protect us. So let's talk about when will quantum machines break encryption, digital encryption? As we've stated, 2029, 2030 to 2035. By show of hands, does anybody think it will be longer than 2035? You do? Good. What's that? Cold fusion. People have been talking about cold fusion for decades.
Yes, fair enough. Okay, good.
Oh, sorry. Yeah. Good point. This gentleman says it's cold fusion, maybe physically impossible. That's quite possible. There are laws of the universe which need to be obeyed, right? It may be physically impossible. I would argue, can we afford to be wrong on that? Maybe not. And with the rate of investment and change and technology change over the last 10, 15, 20 years, that gives me a little less reassurance that we'll never get there, to be honest.
Now, there are estimates out there. There are conservative estimates, 2035. There are neutral estimates, round about 2030. And there are aggressive estimates, 2028. As I've said, Google said 2029, they want to be quantum safe. The implication, the inference that I take from that is, I assume Google knows what the hell they're talking about, right? They want to be protected. They don't want to be in a position where they get surprised and where they get compromised. The scope of the PQC problem, it's not just algorithms. It's certainly algorithms, but it's key exchange protocols.
It's digital signatures, digital certificates. It's TSL, SSL exchanges on the internet. It is authentication and integrity. The scope is enormous. Originally, there was, I think, another misperception that, oh, it's just some algorithms we need to change out. It's not. It's the entire trust architecture. And it gets even more complicated than that because it's not just information technology. It's operational technology as well. There are hardware security modules. There's firmware in a satellite, for example. How on earth do you make that quantum secure? The satellite's already in space.
Is there a solution to something like that? I hope so. And I challenge the technology community to find it. But this is what PQC is all about, recognizing the current problem and trying to build a roadmap to solving that problem. If our encryption is compromised, as we've discussed, it's potentially catastrophic. There are financial penalties. There are business operation penalties. There are reputational issues, loss of customers, loss of operations. Everything is threatened. Data breach at quantum scale, at a scale that is unimaginable.
Not to belabor this point too much, but if our current trust model is gone, we cannot rely on doing business in the digital world anymore. We can't do online banking. We can't make a phone call. We can't stream this to all of our friends out there on the internet. Critical infrastructure. Let's talk about that for a minute.
Utilities, health care, transportation, all of that is compromised. The autonomous vehicle driving down the road. Can we trust that that autonomous vehicle is going to obey reasonable common sense, let alone the laws of driving? Vendor lock-in. Most of our organizations, if not all of our organizations, do business with partners. They've got customers and they've got vendors. What happens if your vendor is not quantum safe, but you are quantum safe? Can you continue doing business with them? Enormous problems. So we suggest some PQC actions, some relatively short-term PQC actions.
Build governance. Start talking about it. Look at training. This is the most important thing that any organization we believe can do now. Put in place a governance structure. Have the conversation with your CISO. Have the conversation with your CIO. Have the conversation with your board of directors. I speak to boards of directors all the time. And the response I get is, but I've got to worry about AI. I can't worry about quantum. They need to be encouraged to think about, yes, AI, yes, traditional issues, but also quantum. Take an inventory of your cryptography.
Again, this is where AI can really help us. Take an inventory. What cryptography are you using? What algorithms? What certificates? What signatures? What hash functions? Everything. We've got to somehow catalog that and decide what needs to be replaced. There's some technical things you can do now. You can make your browsing quantum safe for data in transit. This is relatively inexpensive, relatively easy to do. We always encourage our clients. This is something that should be done immediately. At least switch on the quantum safety in a browser now.
Again, you're not switching out hardware. You're not switching out software. You're just updating the browsers.
And then, of course, you're going to have to retire the legacy crypto. You're going to look at your hardware, your encoded security in your hardware, depending on your industry. You may have to plan to use a PQC root certificate. This is something perhaps we can get off offline. But the certificates themselves at the highest altitude, at the highest level of cryptography will need to be replaced to make them quantum safe. If the certificate, right at the top of the trust model is compromised, again, the entire trust model collapses. Operational technology, again, underserved. Underserved.
I've seen this at many of my clients. Operational technologies, some of it's been around for decades. Systems running manufacturing, systems running process control, industrial control systems. Some of the hardware hasn't been changed in decades. Needs to be addressed. Third parties, again, I've mentioned this before. It's one thing for you to... I help companies with third-party risk management programs all the time. And of course, we ask our vendors, do you have an AR policy? Do you have a security policy? Do you get external penetration testing?
All of that needs to be supplemented now with what's your PQC strategy. There's no point in being a hospital in the US if some of your vendors who process your data are not going to be quantum safe. Re-encrypt with quantum safe algorithms your sensitive archives, particularly for long life data. And finally, map your compliance obligations. There are compliance, and Brian's going to get into this, there are compliance obligations that we're all subject to. Understand what those obligations are and also understand your vendor environment, your third-party risk environment.
So now I'll ask the question, are your identity systems safe against quantum attacks? Remember at the beginning of the presentation, we spoke about classical attacks, and I had two guests here who said they were 100% confident that they were protected. Now I'll ask you, are you protected against quantum attacks? Don't think so. How about the gentleman at the back?
Okay, less confidence. And this is the point we're trying to make here. It's one thing to have reasonable assurance that your systems are protected against classical attacks. Great. You've been building cyber security programs for decades, some organizations, and there's expertise, there's experience, there are partners, there's technology that you use all the time, but quantum's a little different. It really sounds, it hits a little different because we haven't come across an organization yet that is remotely quantum safe. And that's understandable.
It's a journey to get there, and there's some severe challenges in getting there, but it is certainly something that needs to be looked at. Let me hand it off to Brian to talk about the legal and regulatory environment. So I get the next section, the next two sections, and we're going to talk about, of course, the legal and regulatory environment. We exist in societies where we're looking at ourselves, especially here in the European Union, where we have a number of different regulatory environments that are starting to impact us.
Of course, the oldest being GDPR, the requirement that anybody who has any data can actually withdraw that data, and they can be reasonably assured that that data is not going to be used by anyone going forward. But when we start to think about it, you know, there is Article 32 that covers about failure of adopting post-quantum computing. A lot of people don't even pay attention to that. So when you start to look at the regulatory environment, some of the existing regulatory environments already cover these specific topics. And of course, then you have DORA, which is one of the latest.
It's a year old, essentially. It allows for financial entities that need to actually resist the decryption threats that are going to happen. The unique thing about quantum is this, is that in a classical attack, cybersecurity attack, there are flags, red flags, we can call them that, that identify that they are literally under attack. And so generally what has happened is that the CISO and all the security departments set up rules and frameworks to actually manage and deal with that. With quantum, there are no red flags.
In fact, it looks as if it was done by the person who is ordering it. So if you start to think about it, all of a sudden, the moment that you have a risk, the risk, as Derek pointed out, in the CIA, it's the trust framework that exists out there. You have already these things happening and we already have now rules and regulations that are starting to impact us immediately. And of course, we have the NIST 2 directive. That actually requires critical sectors that need to manage their cryptographic risks. We already have these rules coming out at us.
We are starting to see that not only are the risks out there, but the biggest important thing that at least what we're seeing is that people are ignoring the risk. We also now, of course, have the EU AI Act and that's starting to impact us.
You know, Derek just covered quite a bit in detail in terms of what big tech was doing and what AI is doing. And what we started to see is that the big tech is trying to take a quantum risk seriously and they're also taking the impact of AI. What we're not hearing a lot of the conversation about is what happens when you start mixing AI with quantum.
Now, all of a sudden, you have the fastest calculation machine on the planet being governed and managed by AI at speeds that we can't even fathom. You know, that's really something that we have to start to think about when we start to look at the regulatory framework that we're in. So one of the questions that early on was asked was, you know, are you classically cybersecurity safe? And I would say that what I saw from your hands was that, yes, most of us feel that we're classically safe. Then the question was, are we quantum safe?
And I think that no one answered, except for you, these two right here, felt that they were quantum safe. I would argue that while we think of ourselves as quantum safe, we're really, really not. We're not even, we're pretending that it's quantum safe because, really, we're overwhelmed by what AI is doing for us.
In the US, we have the same things. What we, of course, have seen is that NIST has come out with four different quantum algorithms that can be deployed. They don't make a recommendation as to which quantum algorithm you should deploy. They're just saying, these are the four that we have. And they have three more that are kind of in the docket, making the decision as to when they can actually add these to it. So what we're starting to see is this, is we're starting to see that we're having a huge amount of risk management coming out. Tools are being given to us.
Now the question is, is what are we doing to not only inventory what our products are, inventory where our risks are, looking at what is the mitigation plan, how long is that migration going to take over time? Now, if you're a small organization, you might be able to do it fairly quickly, say in 12 to 18 months. But the larger that your organization is, the more complexity that you have out there, that could take up to 15 years, 10 to 15 years.
I mean, the irony is this, is that if you look back to 2021, when people were talking about what AI was capable of doing, and of course, we know what happened in late November, I think it was the November 29th, 2023, when ChatGPT was first released. Well, what people were thinking at that time was, is that AI, as we understand it today, was 10 years away. They didn't take 10 years. It took a year and a half, 18 months. And now we're seeing iterations of AI happening so quickly that we're on a six-week cycle. That's about it. Every six weeks, there's a new model that's being released.
Mythos, of course, is a model that is being withheld from the public. And when we think about that, we're going, well, is Mythos AGI? Do we know if it is or not? Then the question is this, that is just only the latest of the frontier AI models. What's going to happen in six months from now or nine months from now when we see that Mythos is actually publicly released and now we have a new frontier model out there that people are using?
But what we see here is this, is that there's a lot of regulatory landscape that's already being built, whether it's here in the EU, whether it's in the US, whether it's in the UK, whether it's in Singapore. A lot of these models are already out there. And the question that we generally ask people is this, is that when are you going to start thinking about it? And how long is it going to take for you to start to create a governance model? Who's responsible within your organization to do this? You can't just say, well, it's the CISO. He's kind of, he's doing it.
No, it has to be someone specific that manages that. But what we start to see is this, is that not having a plan creates legal liability. So of course, there's the regulatory breach. When we start to look at where statutes and regulations are increasingly mandating state-of-the-art approaches, what are you doing about that? Are you going to wait until actually it comes down to having the regulator say to you, what is your plan?
Well, at that point, everything that you need to do will cost five, 10 times what it will do, take than if you do it now. Well, what if there's a contractual breach? Derek brought up the question very, very clearly is, well, if your data is encrypted today, you can feel safe about it, or we used to be able to feel safe about it. Now the question is, what happens if that's encrypted and now that's released? The penalties are actually out there and they are huge.
Of course, we have a fiduciary, their directors have a responsibility. And of course, when we start to think about it, negligence is going to be something that will be very powerful. So when we start to look at things, we have penalties that we're looking at. The penalties here on the right, I mean, on the left is the United States penalties. And they're really not as severe as the European penalties. If you look at the NIST 2 penalty, it's $10 million or 2% of global turnover. You're basically your revenue for your organization. That is and could be a massive multi-billion dollar penalty.
And that could happen every single year. You start to look at any of these things. And when you start to just go down, you look at, so in the US we have HIPAA. So the penalties there is up to 1.9 million per category per year. I don't know how many organizations that can easily absorb a $2 million penalty on top of all the risk management, all the lawyers that are going to have to pay to deal with that regulatory penalty. You start to look at these things and you're going like, that's absolutely insane.
In the EU, we have DORA. It's 1% of your daily average turnover, your daily revenue. Are you willing to pay that kind of penalty? Because you're not willing to deal with what's coming up. Then of course, there's the personal liability. So we look at it from an organizational standpoint, but we also need to look at it from a personal standpoint.
Of course, what we have is this, is that in the EU, we have NIST 2 with personal liability. It has to come down to what is it you're willing to take.
Now, every organization carries insurance, but can you imagine you're the insurance company that is now providing insurance for your board of directors or your C-suite, and now all of a sudden, they're having to make up these massive payouts. Those are just astronomical numbers. And of course, it has the ability to personally bankrupt any one of us.
I mean, not all of us will have a trillion dollars that Elon Musk has, but when you step back and look at it, it has the ability to crush not only organizations, but individuals. So what is part of the due diligence?
Of course, the due diligence is that you need to develop, every organization needs to develop these basic six steps. One is it's a commission to understand what is the inventory that we currently have. There has to be a board level risk adoption. When you start to think about it, it always starts at the governance level. And the board of directors, if anything that they do, they want to have a governance model to follow.
Of course, there has to be a written plan. So you need to have a written migration plan. You're needing to enable the hybrid TSL now.
TSL, TLS. Also, you need to be looking at your vendors. No organization that I'm aware of has everything horizontally managed internally. They're all dependent on vendors. Now the question is this, are the plans that you're making going to cover the vendors who are not making that? Are you asking your vendors, what plans do you have to become PQC compliant? And of course, then what are you going to be doing for the legal counsel and engagement? So really it comes down to this, is PQC interaction is no longer just a technical risk, it's a legal liability.
So really what we wanted to kind of do is at least at this point is introduce you to our standard. We've spent the last essentially two years creating this standard. This is a standard that sits on top of the, it sits on top of all of the regulatory environments that we have, whether you're in the EU, whether you're in the US or whether you're in the UK, whether you're in the APAC regions. And really this question was supposed to be, does your organization have an identity migration plan? That this is a complete conference on a digital identity.
So from that standpoint, chances are, and I'm really, really sorry that this is not working, this VBOX apps, because it really is a lot of fun to start looking at how everyone starts voting and then actually being surprised at what is really, people are out there really thinking about. The bigger question though is this, because a lot of organizations can go out there and they can say, you know what? We are fully compliant.
Well, then the big question is this, is that compliance auditable? That's a big question. It's easy enough to say, you know what? We have a plan in place, we have an assignment, we have everything there, but could it survive an audit? The chances are, the first one is, is this is what we hope we have. The follow-up is, this is what we really have. So when we start to look at things, of course, the Quantum Core Institute is a risk advisory firm. What we primarily do is help organizations understand what their risk is, and that's why we created the standard. The standard we publish for free.
You can go to quantumcoreinstitute.com, download the standard for free. There's no gating, no emails that are captured. You can just go there and take a look at it. We also encourage people who want to help contribute to it, because it's a living document. We're trying to respond to how technology is actually going through it.
Now, the quantum standard breaks itself down into five pillars. These are the five pillars that they have. These are all governance pillars. These are what your board of directors really need to be managing. So you have all of these. What is the threat? Are the regulators already starting to act? What is the migration? How long is that going to take? Can you audit what we have? And are you dealing with third-party risks? But the other aspect is these eight domains, and this is really where your CISO, your CTO, your CIO, they're going to have to manage this.
Who's managing the governance and accountability? Is there crypto asset viability? In the United States, we talk about real-world assets being tokenized. We're talking $10 trillion worth of assets, financial assets that are being tokenized. That is a crypto asset. So what is your data longevity exposure? What are you doing for PQC migration readiness? What is your third-party exposure? All the way down to the last one, the assurance and auditability. So with that, I'm going to turn it back to Derek to wrap up.
So I've got some late-breaking news, especially for this gentleman here, who claims that he's skeptical about a quantum attack. I've got it on confirmation that the reason the voting wasn't working is because there was a quantum attack on our voting system. First quantum attack in history, so perhaps you'll change your mind on that. I try to address it. I try to reset and go in. I wasn't able to, which may illustrate that quantum attacks can be fairly serious. We weren't able to vote in this discussion today.
I gave a similar presentation in Frankfurt in November last year, as I mentioned, and the voting technology worked perfectly. So four or five months later, look what happened. Quantum attack compromised our voting technology. But don't worry, because we're going to partner with the Quantum Core Institute. We're going to migrate to post-quantum cryptography, and we won't have this problem next time when I hope to see you in Frankfurt or in Berlin next time. But thank you, Brian, and thank you for spending some time on the legal and regulatory implications. Fundamental.
In the US, when I talk to general counsels of large organizations, it's very compelling for them to understand, wait a second, there are significant implications to not acting. NIST has published the standard. It's very difficult for companies to say, there was no standard. The National Institute of Standards and Technology has published the standard. Nobody could argue that we don't have the standard. The Quantum Core Institute has published the standard. There are standards out there.
Eventually, what's going to happen in the market is organizations are going to understand the prevailing practices. There's going to be momentum. People can point to, well, why is Google moving towards quantum safety? Why is Facebook, why is Meta moving towards quantum safety? Why are some of the airlines moving to quantum safety? It's very difficult to justify not doing anything under those circumstances.
And again, we don't always move because of the legal and regulatory environment, but sometimes in technology, that is the mover. We need to understand the severe implications. There are cyber security implications, just like we can get our voting technology.
I mean, we can have business interruption. We can have disruption to our operations. We can have disruption to our clients, disruption to our vendors. There are several motivations for moving to post-quantum cryptography, and certainly the legal and regulatory environment is one of them.
Now, let's talk about the anticipated objections. Whenever I'll go to a board presentation, I like trying to identify, well, what are some of the anticipated objections and perhaps I can come up with some type of response.
Well, we don't understand the quantum threat. I hear that all the time. The timeline is very clear. There's no ambiguity about the timeline here. There's no ambiguity about the threat. You can engage with the Quantum Core Institute and we'll do our best to help explain that threat to your colleagues and to your executives. The impact is catastrophic.
Again, not to belabor the point, and I'm trying to avoid hyperbole, but I do want to be as realistic as possible. It is important to understand the magnitude of this potential quantum compromise. Another quick poll. How many of you were around for Y2K? Do you remember some of the fear in the mid-90s like I do? The fear that everything would break. You wouldn't be able to turn on the tap and water wouldn't flow out the tap. You wouldn't be able to put gasoline or petrol in your car. You wouldn't be able to do anything because of Y2K.
And I was working on some of those projects in anticipation of Y2K. And what happened was it was a bit of a letdown, wasn't it? We went into the new millennium. And I don't know about in Germany and I don't know about in Europe, but certainly in the US, relatively smooth, relatively painless transition. We've got to ask ourselves why. And people turned around and said, well, come on, all that work, all that investment was a waste of time, a waste of money, a waste of effort. But really, was it because the transition into the new millennium actually went smoothly? There wasn't drama.
There wasn't business disruption. There weren't catastrophic consequences. It's because of the preparation. I would argue because of the preparation, the investment, the work, the effort, the design, everything to try and avoid drama on that very auspicious day. I think December the 31st, right? 1999. I still remember where I was at that time.
Now, is quantum, is this threat the new Y2K? Any comments? Any similarities? Gentleman shaking his head, it's not.
Oh, thank you. This gentleman does not think it's the new Y2K.
Why not, sir? Because most of the anticipation of the Y2K issue was everything stopped working. Yes. This is not going to stop everything from working. It's just going to add other layers of technology and improvements and stuff. It's a fair point. It's not going to break. It might disrupt, but it's not going to break the existing technology. Thank you.
Madam, what do you think? Wait, wait. I think sometimes it's difficult to anticipate this. So if you are thinking about history, I have this feeling that usually things that are caused by nature are actually catastrophic, and things that are caused by human, in a way, not necessarily can be mitigated, but there are workarounds and it's not, everything stops, water, energy. So it's not going to be, it's a similar threat, fear.
Yes, yes. But it's not going to happen, like COVID. So this actually quite stopped things. Yes. Thank you. Thank you. Very interesting perspective. Thank you. Differentiating between natural catastrophes and man-made or person-made catastrophes. Very interesting.
And COVID, I'm pleased that this lady mentioned COVID because we went through drama. Of course, we all went through drama and there was some tragically loss of life as well. There was certainly business disruption. Fortunately, we were able to adapt and now we can work from home, which is probably a good thing for many of us, but we can adapt. And my prediction is, for what it's worth, is that we will be able to adapt to the quantum threat. It will take investment, it will take time, it will take energy, it will take risk, but I think we will be able to adapt it.
I disagree slightly with this gentleman in that things won't stop working. Some things will stop working if they're compromised. Yes.
Oh, yes, absolutely. Yes, exactly. By the breaches, by the compromise, absolutely. So if a bank is compromised, you will not be able to do online banking. It's not safe to do online banking. You may have to store your euros under your mattress, like in the old movies. That is a potential implication.
We won't, if a banking system is compromised by a quantum machine. But thank you for mentioning that as well because we are adaptable as a species and we can come up with solutions. We can come up with mechanisms to try and cope with this and that's what Bryant and I are trying to do proactively. I think our call to action now is to just be proactive and not reactive when it may be too late. And it was similar to Y2K. We were proactive, we had a date.
Now, the major difference was we had a specific line in the sand. It was a date in the future. This is a little different. There's no specific date and I would argue that there's a range. There is a range and perhaps we'll never get there. Perhaps the range gets extended.
But again, we don't necessarily want to assume that that won't happen. Wow, another quantum hack. What on earth is that? Look at this. What font is that? Any idea?
Okay, the first one, and I'm not reading that. I'm not translating that, by the way. I'm going by memory. An objection could be, well, there's no expertise. There's no real knowledge out there on this topic and that is absolutely incorrect.
Again, while Bryant and I started the Quantum Core Institute, there is knowledge, there is expertise, there is experience. We joined by some esteemed academics in the room as we speak right now. There's research that's taking place. There's investments that's taking place. Some of the largest companies on the planet are investing in this. The consulting firms, the tech firms, the AI firms. So I would argue that there is knowledge. It just needs to be identified.
Okay, I can't read the next one. No standards. This is a typical objection, no standards.
Well, there are standards, as we've said. NIST has got a standard. I would argue that that is a technical standard. There are standards for technical algorithms, great. But there's also standards for quantum risk, for quantum governance, for quantum migration, as we've just published fairly recently. So that argument that there are no standards can be relatively easily refuted. Budget constraints. Anybody heard this before from their manager or their executives or even their board of directors? This gentleman's laughing. He must've heard it before, right? Budget constraints.
Sometimes that's the reality. Again, just like cold fusion may be physically impossible, sometimes organizations simply do not have budget for this type of investment, this type of project.
Now, I would argue there, fair enough, but I would encourage those directors or those executives to try and find the budget because comparing it to the cost of compromise, the cost of your systems being completely degraded, if not destroyed completely, is very easy to compare and contrast those. Let's try and invest, find the budget. As difficult as that may be, it's worth finding that budget in order to avoid system compromise.
One of the things that should also be mentioned, at least on this particular topic of budget constraints, is is there an advantage to actually becoming post-quantum ready for your organization? In comparing itself to your major competitors, is there an advantage to all of a sudden going out and saying, you know what? We've already done the work.
In fact, we're so concerned about it, we've already spent the money to become post-quantum ready. In fact, we've mitigated all the risk with what we do, what your services we're providing to you, and with what our vendors are providing to you.
Now, all of a sudden, there's a marketing advantage. So oftentimes, when we look at these things, we look at them from strictly an expense side of the equation. And maybe that's the wrong way to look at it. Maybe the way to look at it is what advantage, what financial advantage can we actually have if we go through the process of getting this done in preparation for that? Because there will be different, there'll be a kaleidoscope of responses that organizations that will take on this particular topic.
And when you start to look at that kaleidoscope, really the question is going to be, is where do you want to fall in that array? Thank you, Brian. And that's a great question. That's a great point. I'm very pleased you made it. By show of hands, because I don't trust the Boeing technology till I've reviewed it and ensured quantum safety, by show of hands, would you prefer to bank with a bank that is quantum safe? Or would you prefer to not bank with a bank that is quantum safe? Or are you neutral? Do you care if your bank is quantum safe?
By show of hands, who would prefer to bank with a bank that is quantum safe? All right, this gentleman as well, okay.
Okay, maybe a trick question. Yes, of course, Brian.
Wait, wait, wait, let's, because we have people online and they don't get to hear you. Could you pass this?
Yes, sir. Yes, good morning. Morning. My question is how can one say that his company is quantum safe? Can you really trust this kind of phrase?
A claim, yeah. Yes, excellent, excellent, excellent question. Thank you. Thank you. And let me respond by saying there is a certain level of assurance that you can provide if you've implemented the new algorithms. If you've done all of the things we've described, you've got the governance, not just the technical things, but the governance committee, you've done the inventory, you've established what cryptography you have, where your cryptography is, and you've moved it, you've changed it. You've been agile. We talk about crypto agility.
You've switched out the algorithms, which are quantum insecure. You've made them quantum secure. So you can make that claim. One of the reasons we published the standard was we want organizations to certify themselves against the standard. So then you can say, well, we've done the technical layer, we've done the governance layer, but we've also been certified, independently certified by the Quantum Core Institute or one of our partners, that you've gained this certification. Similar to an ISO certification, many organizations that I've helped organizations get the ISO 27001 certification.
I'm helping organizations get the ISO 42001, which is the AR standard, get that certification. We anticipate there'll be a market in the future for a quantum safety standard certification. And we'd invite you again to review the standard. And if your organizations are interested in certifying against the standard, please reach out to us. Just as kind of a step back to what I was talking about in the middle, and that is, is it auditable? Simply because an organization comes out and says, I claim to be quantum secure. The question should be immediately asked then is, is it auditable?
Could an independent third party come in and say, yes, you've gone through all these steps. We've verified that you've gone through all these steps. And we can actually now give you permission, an audit of that saying, yes, it has actually been done. So you have to think about it from two standpoints.
One is, is what are you telling your public, your consumers, but also what are you telling your board of directors? The board of directors have a legal liability for the organization and personal. So from that standpoint, they're not gonna just be happy with somebody stepping up and saying, yes, we're ready or using the Y2K example.
Yeah, we're ready. What are you going to do if all of a sudden things shut down? So from that standpoint, that question of auditability is really the crux of that value statement. Agreed.
Thank you, Brian. Great question. I also wanna suggest something which is perhaps a little more positive. I know I've been speaking fairly bleakly about the potential future, but let's talk about something very positive, extremely positive. And that is there's an opportunity for organizations. I know there's a whole host of sponsors who are identity management platforms and solutions and services.
Well, guess what? The quantum threat presents extreme opportunity, enormous opportunity, business opportunity for those of us who wanna help our clients become more secure. PQC readiness assessments. This is something that we do all the time. Other organization, we've got competitors. The consulting firms do it. The technology firms do it. Crypto agility, architecture consulting. This is technical.
This is, wait a second. We now know what cryptography you use. We've got it now switch out some of that cryptography and we've got to identify what needs to be switched out. And we've actually got to implement those switch. So there's some technical architecture solutions and services. There's software solutions. There are several very impressive companies out there that are offering PQC software, crypto agility software that they can go out into your network and they can identify your cryptography. And then they can switch it out to quantum safe algorithms. This isn't a theoretical exercise.
Eventually algorithms will have to be switched out and what's an efficient and effective way in doing so. There's training and workforce development quantum training and workforce development, risk services of which the Quantum Core Institute is involved in. And then there's some also adjacent markets quantum networking, very important. We talk about the quantum internet.
Well, that needs to be built. It's a very different internet. The telecommunications very different to current classical traditional communications. There's also emerging additional security areas and avenues such as quantum key distribution which is very securely exchanging a key using light photons through fiber optic cable which guarantees safety, guarantees security because if there's any eavesdropper into that interaction because of the quantum states of those light photons not to get into physics lecture, those quantum states will break down.
And then the recipient will know that there's been some type of breach. So there's some very technical avenues for some companies to get involved in and some very impressive organizations are doing research and commercializing some products there. And of course, other areas that I'd invite particularly those of you who are helping clients become more secure, explore as potential avenues for your business. So in summary, the last slide, the quantum threat identity is real. It's foreseeable and it's accelerating. It's not decelerating.
Unfortunately, or fortunately, but depending for those of us in the business of helping clients move to quantum safety, it is accelerating. The data is not getting pushed out. The data is getting pulled in. PQC standards exist. The gap is organizational execution. It's not technical. This isn't a technical problem. It's an enormous problem. It is a challenge, but it's organizational will to actually take on this problem with all of the other competing problems that you may have, including the real gorilla in the room, which is AI.
And in every conversation, Bryant and I go to talk to executives or boards of directors or industry associations or government. It's, wait a second, we're dealing with AI. AI is the threat. AI is the solution, not quantum. That's why we've got to try and introduce quantum into that, show the relationship between AI and quantum. And that sometimes helps.
You know, one of the things that I like to bring up on this particular topic, and that is, is that we are living in an environment where technology is improving so rapidly, where we used to think something happened and it took, I mean, I'll take CPU chips. When Moore's law was first created, the idea behind it was, is that there would be, roughly every 18 months, there would be doubling of the number of transistors on a particular chip. And that has held true since the 70s.
I mean, the 8086, actually the very first one, 8088, then the 8086, and then we went through all these cycles. That's exactly what we've experienced. So we've gotten used to this idea of, well, there's sufficient time between each generation. What we're now seeing though, is this total breakdown in that timeframe. What we're now seeing is, is that acceleration to where, like I said earlier, AI is going through an iteration every six weeks. We're not used to that type of compression in terms of expansion of technology.
It's only going to become more and more severe when AI and quantum start working in tandem with everything else that's out there. At that point, we're gonna be seeing iterations that will be happening maybe daily, hourly. The question is, is how do we then create a governance model? How do we create a response plan towards this type of acceleration? Thank you. And I'm very pleased Brian brought up completely unplanned or unanticipated Moore's law, because Brian's correct. Moore's law predicted the cost of technology halves every 18 months or the power of technology doubles every 18 months.
And it's been fascinating. I mean, yes, you're right. You mentioned chips. Think about the power in your iPhone compared to 10 years ago.
Now, quantum, we measure qubits, not bits. We measure qubits. And it's very interesting to see, does Moore's law, does this doubling of processing power every 18 to 24 months, does it apply in the quantum world? If it does, we're in trouble. And is there an end to Moore's law? Will Moore's law eventually run out of steam? And some would argue that, no, it won't run out of steam because of new materials, because of three-dimensional chips, because of new circuitry that Moore's law will go on indefinitely.
But when we start moving away from bits into the quantum world of qubits, very interesting, does Moore's law apply? And IBM has proposed an equivalent of Moore's law that we'll be able to find more qubits in a given period. And there's some argument as to, well, what law does apply in the quantum world? How often can we double our qubit count? Or how often can we halve the cost of qubits?
And if an equivalent law of Moore's, similar to Moore's law, applies in the quantum world, again, not to get too technical, that's either a great thing or a very bad thing, or both, because it will eventually mean that quantum machines will break our current encryption. I'm just going to jump in also, and talk about that what he's talking about is primarily a hardware question. Yes. What is the speed of change in the hardware? That's totally ignoring, though, the speed of change in the algorithms.
Shor's algorithm from 2010 to 2020, and then to 20 recently, has had dramatic improvements to the point where in 2010, it was estimated to break cryptography. It was going to take 10 million qubits.
By 2020, that was 1 million. Most recently, that has been estimated to be 20,000 qubits. So you're seeing this dramatic de-escalation in terms of what is needed on the hardware side because of dramatic improvements on the software side. Right.
Thank you, Brian. Yeah, good point.
So again, a good thing and a bad thing. The regulatory and legal landscape is moving fast. As we've discussed, the regulators, the politicians are starting to understand the implications.
The US, it's mandatory for federal systems to be quantum safe, and they gave themselves, I think, 10 years. An enormous undertaking.
I mean, can you imagine here in Europe, the EU government moving to quantum safety in 10 years? Just an enormous set of systems of applications, of infrastructure, servers that needs to be quantum safe within a certain time period. And we believe that organizations that don't start the migration now will face operational, regulatory, and competitive pressure. Brian spoke in very eloquent length about organizations that move to quantum safety will be differentiated from others.
Or banks, for example, I will want to do business with a bank that's quantum safe. Other organizations will want to do business with a bank that's quantum safe. Vendors who supply banks, if they're not quantum safe, they may lose business. So very important, there's regulatory pressure, there's legal pressure, there's operational pressure, and there's competitive pressure as well.
Now, when we talk about, I've had this before in a presentation, what do you mean by starting the migration? What does that actually mean? Does that mean you've got to go home today and start looking at your cryptography throughout your enterprise? And I would argue, no. It starts off relatively easily. The start to this journey is awareness, just like you hear now. You've actually started the journey. Congratulations, right? Having this discussion, some of you may have known about the topic before you joined us today, and for those of you online as well.
But congratulations, because you've actually started the journey, just becoming more aware, just starting to look at, well, wait a second, what conversation should I be having with my colleagues? Whether it's the CISO, the CIO, the audit chair, the chief audit executive, the chief risk officer in your organization, the CEO, or the board of directors themselves. At some point, what types of conversations need to take place and with whom? So the PQC journey, it's long and it's complex and it's detailed and it's expensive, but it starts relatively easy and it starts with these conversations.
So PQC is or should be an audit finding. I've spoken to many audit executives and risk officers fairly recently and I've asked them, is it an audit finding? If it is such an existential risk to your organization, even if it isn't five years time, even if it's 10 years time, should it be on your books right now as an audit finding? And we believe it should be. No question. We are left with two choices as we wrap up this conversation, which I must admit, I've thoroughly enjoyed and I think Brian has as well. Start now and treat this as prudent, disciplined cyber security and IT modernization.
This is a modernization exercise. This is, wait a second, we've been using this infrastructure for 20, 30 years. It needs to be modernized. It's come to its end of life, just like any system, any motor car, any application, at some point there's a life cycle and the infrastructure, the cryptography is reaching its end of life. It needs to be replaced. The sooner we start understanding that project and the implications of that, the better, but it's an end of life. It's a modernization exercise and there are benefits to modernizing the entire cryptographic infrastructure.
We find other problems, we find other inefficiencies, other exposures throughout our system. So we want to propose that this is a modernization exercise more than anything. That's the one choice. The other choice is delay and be forced to react, perhaps abruptly, perhaps impulsively. There's going to be a breach next week or next month or next year. What do we do about it? Is it too late to act? When systems are compromised or when your customers turn around to you and say, wait a second, we're quantum safe, why aren't you quantum safe? Have you really dropped the ball on quantum security?
And all regulators demand it. When the regulation comes down from Brussels or from Washington, that, wait a second, you should be quantum safe. What's taking you so long to get there?
So again, these are the choices we're left with. Start now and treat it as IT modernization.
Yes, it's expensive. Yes, it's challenging.
Yes, it's difficult. Or potentially have to react in the future and hopefully not impulsively or abruptly. I'll invite any questions. I think we've got a few more minutes if there are any questions. We have 10 minutes.
Well, one of the things I also wanted to say in terms of the complexity of the task at hand, and that is, in a prior life, I used to own a capital one, I mean, a capital markets training firm. And one of the things that we learned very, very early on was, is that the number of legacy systems that are in a standard tier one investment bank, and that's generally 40,000 legacy systems. The question then is, is that how do you go about creating the priority of what needs to be managed today so that you don't have to all of a sudden say, I have to do all 40,000 today or tomorrow.
I need to create a priority of that. But that's true though for every industry. So I just use the capital markets as an example of 40,000. And when I mean legacy system, systems that were written in Cobalt are still being used at your major banks. It's just nothing you can do about it. They say to themselves, it's working. I don't want to replace it. I don't want to hire a whole new IT staff to come up with a replacement during this time. But what we're seeing now, at least with quantum, is that the risk is no longer something that is going to happen at some point in the future.
It's theoretically going to happen now. And if you're a major financial institution and all of a sudden you have a breach where billions of dollars are lost, are you going to rely on your regulators to protect you and to back you up to make these people whole? Or is it just going to be they've lost their money? So these are a lot of big questions. And whether you're in financial services, which is this whole category of people that are sitting right there, or whether you're in health care, health care is a massive, massive issue.
Think of it as GDPR is the same as HIPAA, which is in the United States, but for just health records. These are massive, massive risks that are coming up. But we have seven minutes. What we'd like to do is if you have questions, we would love to entertain them. So thank you. Thank you very much. My question is what is implementing this PQC standard now to the performance for the actual system? Great question. So does PQC improve or degrade? Does it increase or decrease your performance, you specifically asked? Perhaps technical performance, throughput, that type of thing? It depends.
I would argue it increases your security, which is a good thing. And there may be a bit of compromise that you have to make. But the data is relatively clear. The new algorithms perform fairly well on the security side. They perform well in security. They haven't been broken yet. They haven't been theoretically proven to be compromised. I haven't heard of any problems with security. And a part of that could be because hardware is now so cheap. If you've got some type of performance issue, just throw some more GPUs at it, and it may resolve that problem.
But that has not been an issue that I've come across, performance issues. Thank you. Good question. Any other questions?
Yes, Professor. Professor Derek, I should say.
Yes, Ante Derek, University of Zagreb, but also representing FortID here. So I'm going to disagree a bit on the point, too, that you made about standards existing and solving all the technical problems. So NIST gave us standards for CAM and for digital signatures. But systems are much more complex, especially when you need fancy security properties. If you want to use messaging as an example, you want end-to-end security, you want deniability, you want post-compromised security. And it's much, much harder to achieve all of those using only standardized post-quantum solutions.
So Apple currently has their own thing. Signal has a hybrid protocol, but it's very unclear what exactly are the security properties that these newly proposed protocols provide. Even something as ubiquitous as TLS is currently a hybrid solution because it depends on Diffie-Hellman key exchange for providing perfect forward secrecy. So to turn this into a question is, do you see technical risks from being prematurely forced to migrate to fully post-quantum systems?
Because from my point of view, you may be stuck between a rock and a hard place where fully post-quantum systems give you quantifiably less security in certain situations. I would hope not, but you raise a very good point. There are standards, but there's not a complete set of standards that covers the entire cryptographic trust model. Absolutely. And thank you, professor. That's a very good point. Excellent point. So in answer, there are standards, but there's not a complete group of standards that covers every part of cryptography. They are emerging.
Academics such as yourself, research institutions, companies are investing. What I see happening in the future is possibly multiple standards continue to emerge and eventually a subset of those standards will remain as the more permanent, more long-term standards that we'll have to rely on. But there is a great deal of effort and investment taking place at the moment, but there's also the risk that some of those standards will be proved to be compromisable at some point. So a great point, and thank you. And please continue the work in academia, which we believe is a key partner in PQC.
It's not just about the industries. It's not just about big tech. It's not just about the big consulting companies. It's not just about big AI. It's about partnering with academia as well to do their technical, rigorous academic research on which so much of this depends.
Yes, sir. Is the migration effort a one-time effort or is it ongoing? And then with respect to the not technical solutions, I find that kind of challenging because wouldn't it need to be done at the identity level and or at the application level?
It's, thank you. Let me answer the second question first. Absolutely, it needs to take place across the entire stack.
Identity, application, network, database, everything. Your first question, also a very good question. We've got this technical challenge and we've got this non-technical challenge. The non-technical challenge is the governance, the budget, organizational structure, industry, what's the industry doing? If I'm a bank and the rest of my competitors and my peers in industry aren't doing anything, perhaps I'm less likely to do something. That to us is the real challenge, but it can be addressed through consultation, through awareness, through training, through pilot projects.
Both of them are significant challenges. And trust me, the technical challenge is no joke either, switching out your cryptography at all layers of the stack. But the non-technical challenge is also very, very difficult to estimate and to try and deal with. I think if there are further questions, I invite you to link in with both Bryant and I or scan, I think we've scanned many of your cards. Feel free to contact us, visit the Quantum Core Institute. We'll be around outside if you'd like to have a more in-depth conversation or challenge.
And I would like to congratulate you on starting the PQC journey and for possibly surviving the first quantum attack on Earth, which we've done relatively well, I think. So thanks very much, everybody.
Thank you, Bryant. Thank you, everyone. And thank you to Kupinga Cole. And thanks, everyone. Enjoy the conference and enjoy the World Cup too. Thank you.
