The evolution of carding, taking into account quantum computing and its potential for hacking card encryption

[Student]

For educational purposes, I will provide a more detailed analysis of the evolution of carding in the context of quantum computing, its potential to break the encryption used in bank cards, and the implications for financial systems. The answer will be structured to cover technical aspects, possible scenarios, countermeasures, and educational examples, while remaining accessible to a general audience. I will also consider current trends in cybercrime and cryptography, drawing on available information and logical inferences about the future.

1. Understanding carding and current protection methods​

Carding is a form of cybercrime in which criminals use stolen bank card information (card number, CVV, expiration date, and sometimes PIN) to conduct unauthorized transactions, purchase goods, or withdraw funds. Common carding methods include:

• Phishing: Obtaining data through fake websites, emails or messages.
• Skimming: Using devices to read data from magnetic stripes or card chips.
• Data Leaks: Purchasing Stolen Card Number Databases on Darknet Markets.
• Infrastructure attacks: Hacking payment gateways, POS terminals, or bank servers.

Current protection methods:

• Public-key cryptography (RSA, ECC): Used to secure connections (e.g. HTTPS for online transactions) and digital signatures in EMV protocols (chip cards).
• Symmetric encryption (AES): Used to protect data in databases and transactions.
• Tokenization: Replacing card data with unique tokens that are useless outside of a specific transaction.
• PCI DSS: A security standard for card data processing that requires encryption and access control.
• Multi-factor authentication (MFA): Confirm transactions via SMS, biometrics, or apps.

These methods are effective against current threats, but quantum computing creates new risks that can circumvent them.

2. Quantum Computing: Foundations and Threats to Cryptography​

Quantum computers utilize principles of quantum mechanics, such as superposition, entanglement, and interference, to perform calculations beyond the capabilities of classical computers. Their impact on cryptography stems from two key algorithms:

a) Shor's algorithm​

• What is it: An algorithm developed by Peter Shor in 1994 that allows a quantum computer to efficiently factor large numbers and solve the discrete logarithm problem.
• Threat: The RSA (based on factorization) and ECC (based on the discrete logarithm) algorithms will become vulnerable. For example, RSA-2048 can be cracked in hours on a sufficiently powerful quantum computer with millions of qubits and a low error rate.
• Carding example: If an attacker intercepts encrypted card data transmitted via HTTPS (protected by RSA or ECC), they can decrypt it and gain access to the card number, CVV, and other data.

b) Grover's Algorithm​

• What it is: An algorithm proposed by Lov Grover reduces search time in unstructured databases from O(N) to O(√N). For symmetric encryption, this means a reduction in the effective key length.
• Threat: AES-256 will be equivalent to AES-128, and AES-128 will be equivalent to AES-64 in terms of attack resistance. This makes databases containing encrypted card data and password hashes vulnerable.
• Carding example: Carders can use Grover's algorithm to brute-force PINs or passwords if they are stored as hashes, or to decrypt stolen databases containing encrypted card data.

c) Current limitations of quantum computers (2025)​

• Current quantum computers (such as the 433-qubit IBM Osprey or Google's Sycamore) have a limited number of qubits and a high error rate, making them incapable of breaking cryptography.
• Breaking RSA-2048 requires about 20 million qubits with error correction, which could be achieved in 5–15 years, depending on the rate of progress.
• However, research in quantum computing (IBM, Google, D-Wave, Quantinuum) and cloud access to quantum systems are accelerating the development of technologies that could become accessible to cybercriminals.

3. How quantum computing will change carding​

Quantum computing will create new opportunities for carders, changing the methods and scale of attacks. Let's look at the key areas of carding evolution:

a) Hacking encrypted card data​

• Threat: Quantum computers will be able to decrypt RSA or ECC-protected data, such as card numbers, CVV, or transaction data intercepted during transmission or stolen from databases.
• Scenario: Carders could attack old databases encrypted with outdated algorithms or intercept data in real time if banks fail to update their security. For example, the 2020 data breach, which contained encrypted card numbers, would be vulnerable to retroactive hacking.
• Example: An attacker intercepts an online store's RSA-2048-protected HTTPS traffic and uses a quantum computer to decrypt it, obtaining data from thousands of cards.
• Countermeasures:
  • Transition to post-quantum cryptography (e.g. lattice algorithms like Kyber).
  • Increasing the key length for symmetric encryption (AES-256 and higher).
  • Deleting or re-encrypting old databases using post-quantum algorithms.

b) Counterfeiting of transactions and tokens​

• Threat: Quantum computers could crack digital signatures used in EMV protocols for chip cards or counterfeit tokens created by tokenization systems (e.g., Apple Pay, Google Pay).
• Scenario: Carders can create fake transactions bypassing signature checks or generate valid tokens to conduct transactions on behalf of the victim.
• Example: An attacker hacks a bank's signature keys used in EMV and creates a counterfeit card that passes verification at a POS terminal.
• Countermeasures:
  • Implementation of post-quantum signature algorithms such as Dilithium or Falcon.
  • Strengthening tokenization using one-time keys and time limits.
  • Integration of biometric authentication to confirm transactions.

c) Optimization of social engineering attacks​

• Threat: Quantum algorithms can speed up the analysis of large amounts of user data (behavior, passwords, preferences) collected from leaks to create more convincing phishing campaigns.
• Scenario: Carders can use quantum computing to guess passwords or PINs if they are stored as hashes vulnerable to Grover's algorithm.
• Example: An attacker uses a quantum computer to analyze a stolen password database, reducing the time it takes to crack passwords from months to hours, and gains access to victims' bank accounts.
• Countermeasures:
  • Using quantum-resistant hashing algorithms such as Argon2.
  • Train users to recognize phishing and use MFA.

d) Quantum carding as a service​

• Threat: Like today's "Ransomware-as-a-Service" models, quantum computing could give rise to "Quantum-Carding-as-a-Service." Cloud quantum platforms (e.g., IBM Quantum, Amazon Braket) could be used to provide encryption-breaking services.
• Scenario: Organized carding groups will offer tools to decrypt card data or counterfeit transactions, making quantum attacks accessible even to unskilled criminals.
• Example: A darknet market offers a subscription to a cloud-based quantum service that decrypts stolen databases for a fee.
• Countermeasures:
  • Regulating access to quantum computing through cloud platforms.
  • Monitoring the darknet for emerging quantum instruments.

d) Attacks on blockchain and cryptocurrency infrastructure​

• Threat: Some blockchains used for cryptocurrency transactions rely on ECC (e.g., Bitcoin, Ethereum). Quantum computers could crack private keys, making cryptocurrency wallets vulnerable.
• Scenario: Carders may use cryptocurrencies to launder funds obtained from carding, but quantum attacks will make the cryptocurrencies themselves a target.
• Example: An attacker hacks a crypto wallet's private key using Shor's algorithm and transfers funds to a controlled account.
• Countermeasures: Blockchains transition to quantum-resistant signature algorithms such as XMSS or LMS.

4. Technical details of post-quantum cryptography​

To counter quantum threats, financial systems must transition to post-quantum cryptography (PQC) . The US National Institute of Standards and Technology (NIST) has been standardizing PQC since 2016. Here are the key algorithms that can protect card data:

• Kyber (lattice cryptography): A public-key encryption algorithm resistant to Shor's algorithm. Used to secure connections (a replacement for RSA/ECC).
• Dilithium: A digital signature algorithm resistant to quantum attacks. Suitable for signing EMV transactions.
• Falcon: Another signature algorithm optimized for speed and compactness.
• SPHINCS+: A hash-based signature algorithm that does not require assumptions about complex mathematical problems.

Implementation issues:

• Compatibility: Switching to PQC will require upgrading all devices (POS terminals, chip cards, servers), which will take years.
• Performance: PQC algorithms often require more computing resources, which can slow down transactions.
• Crypto-agility: Financial systems must be flexible to quickly adapt to new standards.

Educational example: If a bank uses RSA-2048 to secure HTTPS connections, a quantum computer with 20 million qubits could crack it in a few hours. Switching to Kyber would ensure security, as lattice problems are resistant to Shor's algorithm.

5. Timing and credibility of threats​

• 2025 (current): Quantum computers don't yet pose a threat, as their power is limited (for example, IBM has reached 433 qubits, while cracking RSA requires around 20 million). Carding relies on phishing, skimming, and leaks.
• 2030–2035: The advent of quantum computers with 1,000–10,000 qubits and improved error correction. This will enable attacks on small keys (e.g., RSA-1024) or optimized data analysis for phishing.
• 2035–2040: Achievement of a "cryptographically significant quantum computer" (CRQC) with millions of qubits. This will render RSA, ECC, and weak symmetric algorithms obsolete, opening the way for massive attacks on financial systems.
• "Store Now, Decrypt Later": Attackers are already harvesting encrypted data in anticipation of the advent of powerful quantum computers. This makes the transition to PQC urgent.

6. Countermeasures for financial systems​

To protect against quantum carding, banks, payment systems, and regulators must act proactively:

1. Implementation of post-quantum cryptography:
   • Updating HTTPS/TLS protocols to PQC algorithms (e.g. Kyber).
   • Replacing EMV signatures with Dilithium or Falcon.
   • Increasing the length of AES keys to 256 bits and beyond.
2. Strengthening tokenization and biometrics:
   • Tokenization (such as in Apple Pay) must use one-time keys that are resistant to quantum attacks.
   • Biometric authentication (fingerprints, facial recognition) will reduce reliance on cryptography.
3. Multi-factor authentication (MFA):
   • Mandatory confirmation of transactions via SMS, push notifications or biometrics.
   • Example: Even if the card details are stolen, the transaction will not go through without confirmation through the app.
4. AI for transaction monitoring:
   • Using machine learning to identify suspicious transactions in real time.
   • Example: If a transaction is made from an unusual region, the system automatically requires additional verification.
5. User education:
   • Training in phishing recognition and personal data protection.
   • Example: Campaigns that explain how to avoid entering card details on fake websites.
6. Regulation of quantum technologies:
   • Restricting access to powerful quantum computers through cloud platforms.
   • Monitoring the darknet for emerging quantum instruments.

7. Educational example: attack scenario​

Scenario: In 2035, a quantum computer with 10 million qubits becomes accessible through a darknet service. Carders intercept encrypted HTTPS traffic from an online store using the outdated RSA-2048 encryption algorithm. Using Shor's algorithm, they decrypt the data, obtaining card numbers, CVVs, and expiration dates for thousands of customers. They then use this data to purchase cryptocurrency through fake wallets, bypassing MFA through social engineering.

Countermeasures:

• The store is migrating to HTTPS with Kyber, which is resistant to quantum attacks.
• The cards use tokenization, rendering stolen data useless.
• The bank requires biometric verification for transactions over $100.

8. Conclusion​

Quantum computing poses unprecedented challenges to bank card security, threatening encryption breaches and increasing the scale of carding. In the short term (2025–2030), carding will remain traditional, but with the increasing availability of quantum technologies (2030–2040), it will become more automated and disruptive. Financial systems can counter these threats by implementing post-quantum cryptography, strengthening tokenization, MFA, and monitoring. The speed of adoption will be key, as cybercriminals are already gathering data for future attacks. User education and regulation of quantum technologies will also play a vital role in preventing "quantum carding."

If you would like to delve deeper into specific aspects (such as the mathematics of Shor's algorithm, the details of PQC, or code examples for attack simulations), let me know!