From Portfolio Optimization to Quantum Blockchain and Security: A Systematic Review of Quantum Computing in Finance

TL;DR

This systematic review explores how quantum computing impacts finance, covering portfolio optimization, blockchain security, and quantum-resistant systems, highlighting recent advances, vulnerabilities, and future directions for integrating quantum tech into financial applications.

Contribution

It provides a comprehensive overview of quantum computing applications in finance and blockchain, addressing security vulnerabilities and quantum-resistant solutions, bridging the gap between quantum tech and financial systems.

Findings

Quantum algorithms enhance portfolio optimization and risk calculation.

Quantum vulnerabilities threaten blockchain security, necessitating quantum-resistant protocols.

Quantum infrastructure is essential for future secure blockchain implementations.

Abstract

In this paper, we provide an overview of the recent work in the quantum finance realm from various perspectives. The applications in consideration are Portfolio Optimization, Fraud Detection, and Monte Carlo methods for derivative pricing and risk calculation. Furthermore, we give a comprehensive overview of the applications of quantum computing in the field of blockchain technology which is a main concept in fintech. In that sense, we first introduce the general overview of blockchain with its main cryptographic primitives such as digital signature algorithms, hash functions, and random number generators as well as the security vulnerabilities of blockchain technologies after the merge of quantum computers considering Shor's quantum factoring and Grover's quantum search algorithms. We then discuss the privacy preserving quantum-resistant blockchain systems via threshold signatures, ring signatures, and zero-knowledge proof systems i.e. ZK-SNARKs in quantum resistant blockchains. After emphasizing the difference between the quantum-resistant blockchain and quantum-safe blockchain we mention the security countermeasures to take against the possible quantumized attacks aiming these systems. We finalize our discussion with quantum blockchain, efficient quantum mining and necessary infrastructures for constructing such systems based on quantum computing. This review has the intention to be a bridge to fill the gap between quantum computing and one of its most prominent application realms: Finance. We provide the state-of-the-art results in the intersection of finance and quantum technology for both industrial practitioners and academicians.