The Delphi Podcast

Nic Carter: Quantum Threatens $600B of Bitcoin

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Join Tommy Shaughnessy as he speaks with Nic Carter, partner at Castle Island Ventures, about his deep dive into the existential threat quantum computing poses to Bitcoin. After six months of intensive research and discussions with Nobel Prize-winning physicists, Nic breaks down why the "quantum threat" has moved from theoretical FUD to a material risk that the Bitcoin community is currently unprepared to face.They explore the "Q-Day" timeline, the vulnerability of Satoshi’s 2 million BTC, and the urgent need for a migration to post-quantum cryptography. Can Bitcoin’s rigid governance survive the most significant technical challenge in its history, or will sovereign nations and private firms reach the coins first?🎯 Key Highlights▸Why Nic stepped away from podcasts and TV to focus on precise technical writing.▸The 2025 Quantum Inflection: Why 2025 was a record year for quantum investment.▸The Trillion Dollar Bug Bounty: The "unsolvable" problem of Satoshi’s P2PK addresses.▸Why Bitcoin developers implemented Taproot without making it quantum-resistant.▸Defense in Depth for BTC: The technical hurdles of implementing post-quantum signature schemes and the potential for a mandatory "migration" period.▸How the U.S.–China rivalry mirrors the 1939 race for the atomic bomb.▸Applying maritime law to the potential "theft" of ancient Bitcoins by private firms like IBM or Microsoft.▸Scoring the Bitcoin core developers’ preparedness at a 1/100.💡 Want to stay updated with the latest in crypto & AI? Hit subscribe and the notification bell! 🔔🧠 Follow the Alpha▸ Nic Carter Twitter: @nic_carter🔗 Connect with Delphi🌐 Portal: https://delphidigital.io/🐦 Twitter:   / delphi_digital  💼 LinkedIn:   / delphi-digital  🎧 Listen onSpotify: https://open.spotify.com/show/62PR1Ri...Apple Podcasts: https://podcasts.apple.com/us/podcast...Youtube:

SPEAKER_00

You're now plugged into the Delphi podcast podcast.

SPEAKER_02

Nick Carter, who made these loafers? Thank you for having me. You didn't make them though. I got them from a store here in Miami called Blue Scarpa.

SPEAKER_03

How many pairs did you look at before you landed on Tiffany Blue?

SPEAKER_02

I own all of the loafers from that store. So you keep them in business? I would think I'm yeah, I'm like their power user. So they make shoes in any color as long as it's blue.

SPEAKER_03

So you walk in and they just turn the lights on. Well, they they know me.

SPEAKER_02

So I'm not like this most of the time. It's just I really like this one.

SPEAKER_03

I want to sit in the store as you come in and just watch them.

SPEAKER_02

It's in the design. Rally around it. They're great. Will they last? No, these are made of linen. They're not really meant to be worn. Damn. I thought it matched the fit.

SPEAKER_03

I love it. Nick, last time you were on the podcast was two years ago. Operation Choke Point. Was that it? That was it. That was before you broke the story and it became a big deal.

SPEAKER_02

And you know, similar to then, that like I think that was one of the first ones I'd done on the topic. This is the very first, very first podcast I've done on quantum.

SPEAKER_03

I had to pull out a lot of best friend favors to get you here. I sent one text and you said yes.

SPEAKER_02

Yeah, that was I'm retired. Until now. I don't do podcasts. I don't do TV. Done. Why not? I don't want to. That's fair.

SPEAKER_03

I don't want to. Does it distract from work, or it's just you don't like the interviews, or what's the I don't feel like it anymore.

SPEAKER_02

That's fair. That's a good reason. And I can pr communicate more precisely in writing. Well, the writing's good. For this episode, I'm gonna say a lot of stuff that's like slightly wrong, and I'll have to refer you to my writing, which is the canonical stuff. That's fair.

SPEAKER_03

So Nick, you wrote a four-part series on quantum's risk to Bitcoin. They're beautifully written, they have real purpose. It also feels like you enjoy arguing with with diehard Bitcoiners.

SPEAKER_02

Is that what I'm not even I haven't even finished the series, the third installment? Have you started it? No. But I'm thinking I'm thinking about it a lot. So that's like it that that happens in the background, and then eventually one day I wake up, I'm like, it's ready, you know?

SPEAKER_03

So why do so you had the Satoshi dice for at like in 2018, so eight years ago, and you put quantum on there. Yeah, the FUD dice.

SPEAKER_02

Quantum is on the second edition of the dice. Same year? Yeah, in 2018. What got you to put it on it that early? What was the Oh, because I ran out of FUDs. I mean, there were like three or four editions of the dice. There's only so many FUDs that you give it on a panel of a 12-sided die. What else was on there? Think about how many sides that is.

SPEAKER_01

Yeah.

SPEAKER_02

That's 48 sides. That's a lot of different FUDs. But quantum was always a good FUD because me calling something FUD doesn't mean it's not a risk to Bitcoin, to be clear. Like FUD, some FUD is quality FUD, like the block reward stability in the long term, right? The fee issue. That's quality fun because that's an unsolved problem. So is quantum. Back then, though, in 2018, that was seven years ago, right? That's a long time though. It's like, you know. So a lot happened since then in quantum. And this went from a very theoretical possibility to well, actually, it sounds like most people in the field are saying this is gonna happen. So it was something that Satoshi knew about back in the day. In 2010, Satoshi wrote about quantum and said, Yeah, probably we'll break the hash functions eventually. Probably won't, honestly. But that's what Satoshi thought. Jeez. So it's always been a uh potential issue in the cryptography.

SPEAKER_03

So how much research did you do for these articles? Like how many people did you talk to? How many books did you read? I don't know, put some numbers around it.

SPEAKER_02

Hundreds of hours. Jesus. So every six months I get totally obsessed with something. So in 2023 it was choke point, right? And then it completely dominates my focus. And before that it was proof of reserves. And I don't remember what it was last year. I don't know, maybe maybe you remember. Some time. And well, AI and data centers, that was probably my main obsession last year and the year before. Um, and this year at the end of last year, uh, for the last six months of 2025, it was quantum. And there's a lot of work you have to do to like get to a reasonable level of understanding. First of all, I didn't even know what quantum mechanics was, let alone quantum computing. You know, turns out quantum mechanics is the established theory in physics, and it has been since 1920. I didn't know that. Um it's very empirically, frankly, proven. Some people will disagree with me for saying that, is proven. There's a lot of people like, oh, quantum computing isn't real because quantum physics is actually fake. Like, tell that to Niels Bohr. I wish I could debate this with you. Yeah, yeah, no, but there's actually people in the U of our Lord 2026 that say quantum mechanics is fake. It's like, no, dude, but like we've known it's real.

SPEAKER_03

So six months of time spent, I have other questions on that, but uh, before we dive into all of the points, I want to know Well, I didn't answer your question, sorry.

SPEAKER_02

Fair. I talked to uh well over a dozen physicists, including Nobel Prize winners. I we obviously made a big investment in a quantum resistance company, uh, which a lot of people are upset about. Um why would they be upset about that? They like claiming that I have a conflict of interest, which is like I'm a VC, I invest the stuff I believe in. Obviously. Uh that's how it works. Um, so obviously, you know how much diligence goes into the full details aren't out yet. They will be in several weeks. I don't want to spoil the surprise, but you know how much goes into a material investment. Just so just that alone. It's an obscene of work. Yeah, people don't see it. And then just besides that, I had this fascination with that. I wrote an entire fiction story about it for some reason. I feel like you have more time in the day than than the rest of us. I uh I don't know. And while I work, I were I spend my weekends doing this, you know. And then I also really didn't want to get yelled out on the internet, so I wanted to make sure I was right about everything that I was writing down. So I was totally obsessive about my longer articles.

SPEAKER_03

I remembered your last obsession, it was boxing.

SPEAKER_02

Oh yeah, yeah, yeah, yeah. That was a that was a that one made no sense.

SPEAKER_03

Yeah. Yeah. So you spent a lot of time on this. Six months, read books, talked to physicists. Before I will ask you all the questions about the reports, the rapid fire questions I have are have you sold any Bitcoin following your research?

SPEAKER_02

No.

SPEAKER_03

All right. Second But I'm not ruling it out.

SPEAKER_02

Okay. But it but it is a no though right now. I would sell it if with some within the next year, the Bitcoin developer community was not sufficiently mobilized. Okay. That's a good point. Yeah. Yeah, yeah.

SPEAKER_03

And then the second question I had was your percentage chance on a quantum break for Bitcoin within the next 10 years?

SPEAKER_02

By 2035? Yeah. 70 to 80%. Wow. Maybe higher. Damn. That's a lot higher. What would you put it out of five years? By 2030, I would say 100% possible. 20 to 5 to 30%. So 25-30% for 2025? There are many for 2030. Sorry, 2030. There are many hundreds of millions of dollars that have been deployed with this belief in mind. So you don't really have to trust me. You have to trust, well, there's actually institutional investors out there that genuinely believe this and were able to convince their IC to put hundreds of millions of dollars into this concept. Wow. So well, billions, frankly, but a quantum break of Bitcoin specifically. But you know, ten billion dollars roughly were deployed into quantum computing generally, but only a subset of that was with the idea that it might break Bitcoin.

SPEAKER_03

Okay. But that's materially more than what it was historically.

SPEAKER_02

That's this was 2025 was the highest year of quantum computing investing in history by far. Typical rates like one to two billion dollars. Damn. Um and I'm not even counting internal investment in places like Google or Microsoft or IBM.

SPEAKER_03

And that investment number, is that specifically to fix the problems we're going to discuss, or is that to create alternative versions like coins?

SPEAKER_02

Like what are you? That's just the 10 billion is just general investment in QC with the idea that you'll be able to monetize the technology in various ways down the road. Physics, simulation, material science, and of course breaking cryptography, which you can sell to governments, or you can steal all the bitcoins.

SPEAKER_03

So your least favorite question, but we have to set the stage at all ask one of it. What is quantum computing versus classical computing? You specifically told me you wouldn't ask me that.

SPEAKER_02

But it's on the sheet. Quantum computing. All right, we won't dwell on it. So classical computing is like a model of the world that's not accurate, right? You know, classical computers have finite states and they are deterministic. And uh a bit is either one or zero. And they're um so that's how like c classical computers are. But the world, the stuff that we are made of that's in this room, is not classical. It is made of quantum stuff. So particles are non-deterministic, they are probabilistic, they can be ones and zeros at the same time, or both or neither for some reason. And uh particles can be entangled and be physically correlated in their attributes, even at a distance, even light years apart.

SPEAKER_03

It doesn't make any sense. It's just so hard to wrap your mind around like having something on Earth and then having it a billion years light years away and them spinning at the same time.

SPEAKER_02

No, it doesn't make any sense at all. Uh but apparently, and I looked into it, you can't actually communicate information faster than light, so even given that, so there's no loopholes around you know space-time stars. I know. I thought that was a loophole. Yeah. Um and so the world is made of, you know, and and when you measure something, uh, you're also uh, you know, collapsing the wave function and you're forcing it to be discrete. Uh and so you're actually changing the nature of a particle when you measure it, right? So this is like That is crazy to me. That I yeah, that one part I struggle with a lot. I mean, all of quantum mechanics is like an insane, like I don't think anybody actually intuitively understands it.

SPEAKER_03

Intuitively, I I can't understand that. That something could have multiple states, when I look at it, it only has one. Like, yeah.

SPEAKER_02

So yeah, we live in a quantum world as true. We've known this for about a hundred years, but physicists hated this. Hated this at the time. Einstein never accepted it, really. He was really against it. And um I mean, because it's like if you're if I'm sitting here and telling you that, you know, um particles aren't in a specific place, but they're kind of in a probability space, and um, you know, I'm trying to explain to you how the double slit experiment works, and particles interfere with themselves, and they're function as a wave some percentage of the time, and particles some other percentage, you'd be like, Well, this sucks. I hate this. Yeah. Newtonian physics is way better and more satisfying. So way easier to read. As it turns out, we live in uh a quantum world, and so then quantum computing is computing quantumly. So instead of having uh you know regular old bits compose the computers, you have quantum bits, which are basically atoms that are in a quantum state, uh, so qubits, and uh they can be one or zero or a variety, and they can interfere with each other. Um, and uh that gives you way more uh degrees of freedom in terms of your computation. So you can do uh different sorts of computation that are just completely impossible classically. So that is my really bad explanation.

SPEAKER_03

No, no, it it's helpful. I mean, uh a couple things maybe also to clarify before we get into it. I will say there's no good explanations of what quantum computing is. No, there isn't.

SPEAKER_02

I argued with Gemini for a while before this interview, and they're there's no way to intuitively describe what quantum computing is, it's impossible. Jeez. It but I'm so like I'm trusting a that quantum mechanics is real. Some people don't believe that. Okay. But we're just gonna assume that for the purpose of the discussion. And two, that not every physicist that says quantum computing is possible is lying to us. Some people think that's true as well. They think there's a huge conspiracy of the quantum physicist that everyone is lying to you know extract money from the VCs and that uh quantum computing is fake, uh, and the $10 billion that were put into it last year, everyone was tricked. So a lot of people think that.

SPEAKER_03

So, like without debating the technicals, like one thing is what you're saying, which is like all these people want to get all this money from the VCs. But as you and I both know, like the die hard technical folks, I don't think they care as much about that, right? Like, so why would they be lying?

SPEAKER_02

Like, yeah, I don't I don't believe that there's a big conspiracy of physicists, you know. I think m there are some uh physicists that don't think quantum computing will happen, but they're in the minority during and and there are some people that think thought the engineering challenges were too high for quantum computing to ever be useful because it hasn't been useful yet. Those people are defecting, so they're increasingly changing their minds. Now I would say the consensus among physicists, physicists, is this will happen. Um, and not in 30 years, but maybe in 10, maybe in 15 years, but maybe shorter.

SPEAKER_03

When you talk to these experts, the ones who don't believe the quantum mechanics is real, are those the ones that are typically raising money or not raising money?

SPEAKER_02

No, I mean you wouldn't, right? Like there is there are people that want intellectual clout from saying that quantum computing or quantum mechanics is fake, but they obviously wouldn't start a company in the domain. I'm only talking to people that are bought in.

SPEAKER_03

I was kind of trying to figure out like the mercenary versus non-mercenary, like that we saw with AI. Like the mercenaries went to Meta, took hundred million dollar paychecks, the real people kind of stayed at Google and OpenAI and Anthropic.

SPEAKER_02

But yeah, it's hard to say. I mean, oh it's very hard to say whether the people of Microsoft and Google and IBM are the purists, or the purists are in academia, or the purists are Ragetti and IONQ. It's very hard to say. Pupils just seem interested in quantum computing because it's intellectually fascinating and it's a new domain of computing, which could be very transformative.

SPEAKER_03

Yeah. So one other question to ask before we go into the fun stuff. Two of the things you called out in your second article was the difference between physical qubits and logical qubits. And you also made a really key point to discuss fidelity. And I think you did this because everybody on Twitter is just sharing these qubit counts, but there's a difference between logical qubits and physical, and then like how accurate they actually are. So can you dive into that for a minute and then we'll go into the fun stuff?

SPEAKER_02

Yeah, I mean, so a physical qubit is an atom that's held in a quantum state, right? Uh there's different modalities for this. There's um there's like trapped ions, there's super cooled qubits. Like when you think about those chandeliers that have multiple stages, and then those Microsoft videos, they're really cold, and they actually get colder and colder until they're seven millikelin, which is like way colder than outer space, like way colder. Like someone today was asking me, could you put a quantum computer in outer space? Would that help? I'm like, well, no, actually, because it needs to be so much colder than outer space. That's crazy. Yeah, it's nuts. So physical qubits are subject to interference, they interfere with each other. So if you have a lot in an array, they start to generate just all kinds of interference, right? Kind of like we're saying I'm probably generating some radiation and it's interfering with you right now. Jeez. Yeah, and vice versa. But you need And so you need to error correct these qubits that are being hit with cosmic radiation and temperature and noise, and someone was walking too loudly outside. That's a real thing. Uh they these uh quantum computers have to be held like in these very delicate, uh like pneumatic uh you know bases so that so that there's no vibrations, right? The HVAC has to be in the different part of the building, you know, stuff like that. So um, but we did figure out uh more recently how to error correct the physical qubits and to get sort of like pure, theoretically pure logical qubits, which are the things that matter. So that's the thing that you're really trying to count. Um and then the fidelity is basically the odds of uh a bit flip being successful and not happening for the wrong reason. And uh so when you're thinking about the success or progress of quantum computing, you want to think about a two-axis chart. You want to think this is this chart exists. You want to have uh physical qubits on one axis and fidelity on the other axis, and then you care about the frontier advancing. Uh so we've recently reached fidelity thresholds where people think, okay, but this thing's possible. That only just happened. Just a couple of years ago, people would say, well, we're below the uh fidelity threshold where adding more qubits means you're just increasing the total amount of noise in the system.

SPEAKER_03

So you so hundreds of thousands, I think, to millions of physical qubits correlate to thousands or tens of thousands of logical qubits?

SPEAKER_02

Yeah, I mean, for context, the best systems we have today have like a dozen logical qubits and maybe a thousand physical qubits.

SPEAKER_03

It's crazy to think that we need this at that cold of a temperature and walking close to the machine could mess it up, and yet we need to scale. I think your article said three orders of magnitude from where we're at now.

SPEAKER_02

Yeah, but three order of three orders of mag isn't that much, right? I mean it's kind of a lot. So, like if how many orders of mag are we doing in terms of like flops a year in AI? Yeah, it's like one a year. Like you think about algorithmic improvements, energy, bigger and bigger data centers, better GPUs, power, yeah. So that in AI that's happening. I mean happened quick, too. How much bigger is Grok 5 versus whatever AI model existed in 2017? Many orders of magnitude bigger, right? Yeah. Because we developed the scaling law in AI. We don't have that in quantum yet. It seems harder to spoke scale quantum than AI. There's more variables. We haven't found a way to hold most of the variables fixed and improve on the ones that matter yet.

SPEAKER_03

So before we dive into the fun stuff, we actually have to discuss the link between quantum and what is to break on Bitcoin. So like you identify three risks. The first one is trillion dollar bug bounty. So the ancient coins, which is two million Bitcoin sitting in Satoshi's original P2PK wallets. So that's a lot of money. Um you when you go into the article, you discuss a lot of different things, like how it's a pretty big moral issue because if we steal his coins, how do we even figure out who to give them back to? You also mentioned that we can't just retroactively upgrade his wallets, things like that. So let's let's uh dwell on Satoshi's coins for a minute.

SPEAKER_02

Yeah, I mean that's uh there's like two really big problems. If I mean if quantum happens and Bitcoin's not prepared, it's like the end of Bitcoin, basically. So, but even if Bitcoin is prepared, it might also be the end. So you're so optimistic. So so Bitcoin's ever faced challenge like this before. Ever, ever, ever. The Satoshi problem is very acute because Bitcoin is a replicated database that many people agree on one version of it. There's no way for any administrator to change the way that Satoshi's addresses are encoded. Unless everybody that runs Bitcoin says we are gonna collectively steal slash burn Satoshi's coins, which never happened before, right? In Ethereum, they did that one time with the DAO, right? The DAO hack in 2016, and they forked to change the state in a regular state change. Bitcoiners pointing at Ethereum so they're like, You guys suck. This is the whole thing's arbitrary, and like anyone could steal any coins for any reason. And now that's the only time they did that in Ethereum, but still, right? So this is like that on steroids. And we're talking about the creators' coins. That's like God's coins.

SPEAKER_03

So even if everybody upgraded their their wallets and and we'll go into the other risks, what you're saying is there's no way to fix Satoshi's wallets themselves.

SPEAKER_02

Unless you do something completely unprecedented, which is fork out the coins, yes. Uh those coins are held in a vulnerable state, which is a pay to public key, which is an address type that's not hashed. The hash is considered quantum resistant. So SHA 256 should be fine. But elliptic curve cryptography, the thing that is used to make sure that the private key to public key function is one way, that is not secure against a sufficiently advanced quantum computer. Satoshi's coins are in an in insecure format, and it's weird that Satoshi left them like that because Satoshi was aware of this risk.

SPEAKER_03

Didn't you mention I forgot in the article? You mentioned that he was like aware of the risk and hashed the addresses twice or something.

SPEAKER_02

Like what was the Well, addresses are hashed in Bitcoin as a matter of good housekeeping. Um I don't think it's because of quantum. I think it's just because it's C.

SPEAKER_03

But you mentioned Satoshi was aware though of quantum.

SPEAKER_02

Yeah. But if if Satoshi had really cared about the risk, Satoshi would have not left a million to two million coins laying about. It's crazy. Yeah. Like it's nuts.

SPEAKER_03

Why why do you think they would do that? They didn't they didn't think Bitcoin would be this successful, or they thought quantum was further away, or what was the Yeah, I mean in 2008 it wasn't seen to be an image.

SPEAKER_02

But if you're Satoshi, you're building this thing in the last 50 years. You have to consider. Maybe Satoshi didn't expect they probably they presumably thought that the whole thing was upgradable, easier to upgrade. Like in 2010, Satoshi couldn't have known that 15 years later, as it turns out, it's impossible to upgrade Bitcoin. And at that time, Satoshi was changing stuff in Bitcoin all the time, sometimes without asking. So Satoshi and Satoshi said this on the forum. They said if Shaw is broken through quantum, we'll just upgrade. So Satoshi didn't realize maybe that the stakes would be what they are.

SPEAKER_03

Just upgrade seems so hard. Yeah. Yeah, but like during Satoshi's tenure, Satoshi left in 2010.

SPEAKER_02

Like Bitcoin is still worth basically zero the whole time.

SPEAKER_03

We'll we'll come back to Satoshi's coins. The second risk you mentioned is the address reuse. And there's a lot here. I think you mentioned one-third of the supply itself is vulnerable, which is exchange cold wallets and tap root addresses. That seems pretty crazy too.

SPEAKER_02

Well, yeah, there's different things here. One is that if you reuse an address, you have now broadcasted your public key on the blockchain. So if the public key is known with a sufficiently powerful quantum computer, you can reverse engineer the private key out of that.

SPEAKER_03

So if you don't spend the Bitcoin, your public address is not revealed.

SPEAKER_02

If they're held in a modern address type, with the exception of Taproot. Which geez. Bitcoin developers making Taproot not quantum resistant is the craziest thing that's ever happened.

SPEAKER_03

How much of an oversight is that? Like how easy would it have been?

SPEAKER_02

They knew. I went back and I looked at the discussion. They knew. Luke Dash raised this objection at the time and said, Hey guys, by the way, uh Taproot addresses are vulnerable to quantum. This is 2021. At that point, we kind of did know that quantum would happen eventually. So what the hell were they thinking?

SPEAKER_03

Why do you think they didn't take it? Why do you think they didn't trust Luke?

SPEAKER_02

Luke didn't actually try and derail the process, he just pointed it out. Okay. Um, but I think Bitcoin developers are not physicists, you know, for the most part. So their skill set is cryptography and software engineering, and it's not uh being on the bleeding edge of what's happening in physics or theoretical computer science. So I think they just didn't have enough appreciation for the risk.

SPEAKER_03

So when you say I and I don't know if this is totally right, but one-third of the supply, that's addresses that have their public key revealed.

SPEAKER_02

Yeah, I mean it's more actually uh if you look at all the different categories of vulnerable wallets, whether it's the abandoned PDP case, Satoshi coins, the address reused coins, there's all these big exchange code wallets, or um other uh niche categories of addresses that uh reveal or expose the public key, like taproot, for instance. I want to say it's like six million Bitcoin. Jesus.

unknown

Yeah.

SPEAKER_02

But some of those can be addressed. Like if we have a fork and we're like, okay, everybody move your coins to quantum safe format. Most of those can be secured, but not all of those, right?

SPEAKER_03

What's the overall risk number? Six, seven hundred billion?

SPEAKER_02

You said a third, maybe a little bit higher? Yeah, I mean it's hundreds of billions of dollars. And it you know, like you what you can't do is call up Satoshi and say, uh Hey Bud, I know you've been like A-WOL for a while. That's fine. We're not mad at you. Please check back in. Uh it's really important that you come back because we need you to move those million plus coins a second, dude. Otherwise, China is gonna get them.

SPEAKER_03

So, like, if I don't know if this is accurate, but like, could the Binance hot wallet you mentioned or cold wallet, whichever one it is, um, could they they could transfer their Bitcoin to a new wallet, but they would never be able to spend the money because they would reveal their key.

SPEAKER_02

There is a risk that in the 10 minutes between broadcast and spend, this is a more niche risk. It's still worth thinking about. A quantum attacker could see the mempool and they could be like, okay, let me quickly reverse engineer your private key from Republic Key, and then I'm I'm gonna pretend to be you and broadcast a can, you know, but that is is kind of not that likely to happen, even in the case that quantum computing occurs, because we think that it would take a really long time to compute a key quantumly. So probably you wouldn't be able to get all that done in 10 minutes. And also you could just send the transaction to the miner directly.

SPEAKER_03

So in the 10 minutes to send the transaction, that's not enough time for the quantum computer to reverse engineer.

SPEAKER_02

Assuming like normal rates of development. Maybe in 30 years it would. Okay. But probably not. That's probably not the thing we have to worry about right away.

SPEAKER_03

So we talked about Satoshi's coins. That's kind of like unsolvable from what we're talking about.

SPEAKER_02

I wrote a short story about it. Yeah.

SPEAKER_03

So then in part two, now we're talking about publicly revealed addresses, though. That is solvable?

SPEAKER_02

I would I would say it's all solvable. It's just a matter of is the Bitcoin developer community and the Bitcoin community community interested in solving it. Satoshi's coins could be solved with a fork, or we just say, whatever, the quantum attacker gets the coins. Who cares? Um But how do we fix the address reuse ones?

SPEAKER_03

What do people do there?

SPEAKER_02

We implement a new signature scheme in Bitcoin, which uses post-quantum cryptography, which does exist. It's not efficient. Your key sizes are most likely way larger. So it basically implies a block size increase, which Bitcoin can handle. I mean, look at Solana, right? Yeah. Yeah. Solana blocks are like I think Solana is like 500 times more data per second than Bitcoin. So we can handle a block size increase. So there are obviously we have to pick a post-quantum scheme, which is like, oh, this is new and untested cryptography. This is scary. Um, there's a risk that the post-quantum signature scheme could be classically breakable. That would be bad. Can you imagine if we were like, okay, everybody move over to this post-quantum signature scheme? And it turns out ordinary computers can break it.

SPEAKER_03

But if we if you change the signature scheme, that is that a hard fork? Is that a soft fork?

SPEAKER_02

You could do it with a soft fork, but you would need a long time for people to move over their coins voluntarily.

SPEAKER_03

Oh, so it doesn't retroactively help people who don't move their coins over.

SPEAKER_02

Well, there's a couple ways you could do it. So probably the Bitcoin way of doing it would be a soft fork. You have five to ten years to like, you know, wake up or wake up from your coma or get out of prison. Like, you know, Bitcoin is meant to be long duration. Yeah. Wealth technology, right? So we can't just assume everyone's online. No. I some people are like hermits. You know, they're at a monastery in Mongolia and they're on a silent retreat for a year. I don't know. Yeah. People are busy. No, I get it. They are.

unknown

Yeah.

SPEAKER_02

If you gave me a year to move my coins, maybe I wouldn't figure out how to do it. Like gotta go to five different cities and you know.

SPEAKER_03

But the the big people would though, like the coinbases, the Binances, like they would Yeah.

SPEAKER_02

I don't think everyone would, honestly. I mean, this is why I'm saying we need to act now or plan now, because maybe there is a quantum break in five years. We need to have begun that migration.

SPEAKER_03

Look, the crazy part though about the timeline that's like killing me is you not only need years to like figure out the fix and discuss it, but then now you're also saying even if you had it, you still need time for people to move over. That's a really long timeline.

SPEAKER_02

Yeah, so when you work backwards from Q day, it's like Y2K with the bottom. We work backwards from Q day. Okay, Q Day, let's say it's 2033. Okay, it will be conservative, right? How long will it have taken for Bitcoin to migrate? I don't know, five years? Okay. How long will it have taken for us as a community to agree on the path forward? Three years? How long will it have taken for us to test the code? A year? That takes us back to now in the past. Yeah. But we're in the present. So the numbers are not adding up anymore. No. Right?

SPEAKER_03

The hard thing though is like, as we both know, like I feel like there always is creative software fixes that sort of come about.

SPEAKER_02

Like I'm betting on Bitcoin devs' ingenuity. The fact that I still have any Bitcoin is a testament to my belief in these devs who mostly don't like me now, uh getting their act together. I don't think they liked you for a couple of years. So they're extra mad. But uh, I am betting that we find a creative uh solution. But really, like the fundamental facts are what they are. I think this is gonna happen in 10 years. Satoshi's coins can't move without a forcible, basically confiscation by the community, which is unprecedented. We have to rip out all the cryptography in Bitcoin, which is unprecedented. We have to get every single Bitcoiner to make a transaction on-chain. Like, and for we haven't even talked about like, okay, well, there's a finite amount of blocks. Like, okay, so you need hundreds of millions of transactions. Like, how long does that take? So is that even possible? It is, it just takes months if it's even ordinary. And it will that's assuming no other transactions on the network? Yeah, so it's like the only transactions are happening are migration transactions, nothing else is happening. So, like, the whole this is by far the biggest problem Bitcoin's ever faced ever, by 10 orders of magnitude. Like, compare like SegWit or Tap to this. Completely irrelevant nonsense, right? Yeah, like we spent five years or seven years building lightning. That was the developer priority for me.

SPEAKER_03

Man, do you remember how much funding those Lightning Labs companies got or like years ago? I funded someone else. But they didn't work. No, I mean at the time it made sense as an investment.

SPEAKER_02

It's more hindsight. This is the biggest problem Bitcoin's ever faced. This is like Godzilla compared to an ant. Okay. And uh no one wants to acknowledge that it's a problem because even speaking that out loud, it's like saying Lord Voldemort's name. Like it's a dangerous, right? That shall not say his name. He it's the problem that must not be named. If you say it out loud, the investors might panic. Yeah. Which is, I think is fine, right? Uh probably the investors should know about this. Yeah. Uh so that we can mobilize and figure it out instead of being like the turkey the day before Thanksgiving gets subtly executed because that's what's going to happen otherwise.

SPEAKER_03

So, Nick, what how do you like score the preparedness intensity of the Bitcoin core developers in actually fixing this issue?

SPEAKER_02

One out of 100. Wow. Yeah. So uh you fail at 50%, right? Anything below that is an F. So they're just not talking about it? What's the They mostly don't think it's real or they won't acknowledge that it's real. They And who who's who's they?

SPEAKER_03

Is it like one person?

SPEAKER_02

Is it a hundred people like companies? I read all the discussions on the mailing list about it. There's one named BIP that has to do with quantum, which is by an outsider. It's a very nice guy, Hunter Beast. He's not like part of the inner club, right?

SPEAKER_03

I think I listened to his podcast prepping for this.

SPEAKER_02

Hunter Beast is awesome, and I hope that he succeeds. His BIP, BIP360, is a very first step in many, many steps that have to happen. But even his BIP is not being really considered. And you know how it works in Bitcoin. You need the high priests to endorse the Bitcoin conclave, right? So the Council of Trump for Bitcoiners, right? Or come together.

SPEAKER_03

So you need So is it blood sacrifice then BIP? Then how does it work when you walk up?

SPEAKER_02

I don't know how it works exactly. It's a little arcane. It's either you Greg Maxwell and you maybe Adam Back needs to be involved.

SPEAKER_03

And uh so if I point blank asked asked Greg and Adam, they would just say quantum's not real.

SPEAKER_02

Like, um I know you can't speak for them, but like obviously says that it's real, but it's under control and that I should stop asking questions. That's never a good answer. That's his view, genuinely, and he's been like subtweeting me a lot. It's like, dude, I'm not your enemy here. I'm actually your friend.

SPEAKER_03

I just don't get why arguing against it like is the correct approach.

SPEAKER_02

The Bitcoin devs, as I said, are not experts in physics, which neither I am I, but I know that I'm not, and so then I wouldn't talk to a bunch of physicists, right? So that's the difference. Um, I am a generalist, I am an investor, and it's my job to price risk. It's not their job to price risk, they don't do that for a living. They design software which needs to be like really ironclad, but it's not their job to put a dollar value on the probability of something happening in 10 years. That's our job.

SPEAKER_03

But their software isn't ironclad if it's at risk for quantum.

SPEAKER_02

So they're normally very paranoid. They're paranoid in Bitcoin against all kinds of stuff. Like they won't use certain dependencies in their code because they think, well, what if someone attacked Bitcoin through one of these libraries? You know, so like they're very paranoid and they rolled their own cryptography back in the day, actually, uh, their own implementation, um, because they didn't want to trust another library, right? So like the Bitcoin level and paranoia in development is real, and yet they're not paranoid about the biggest thing, which is as it turns out, the cryptography doesn't work anymore. So that's weird.

SPEAKER_03

If somebody like we have a lot of new actors in Bitcoin, like you know, we have the DATs, we have the ETFs, we have the banks, we have new large holders, sovereign nations, the US government, all these new groups of people. Generally the financial actors won't make changes, they'll just sell. But if they wanted to create their own quantum Bitcoin core dev group and they wanted to, you know, produce these BIPs and move them forward, could they work around these high religious priests?

SPEAKER_02

Yeah, it's a really good question. Uh I don't know if you read my short piece of fiction. I only read nonfiction, Nick. I know, but I was really hoping you'd read my story. This whole thing is just a pretext for my creative endeavors. Uh I'm a frustrated writer.

SPEAKER_03

You're doing all the quantum work to promote the books.

SPEAKER_02

So in the book, I'll spoil up, um, the big economic actors get together and they sign a letter saying we need to fork out the Satoshi coins. Wow. And that actually is persuasive. Uh in the story, I won't tell you what happens. It's very exciting.

SPEAKER_03

You know I'm gonna read it.

SPEAKER_02

In the story, it doesn't get implemented in time, but uh that just spoiled it. Um, but in in that story, this is actually what I think is gonna happen. Um, I think they will decide, uh, okay, the devs aren't really moving on this. We need to kind of mobilize the community because these are these financial institutions are fiduciaries. They um don't want to be sued by the people that bought their Bitcoin ETF because something terrible happened to Bitcoin, right? So they I think will eventually start to agitate, not in a very active way, but just quietly but uh with conviction and saying, hey guys, um I don't know what's happening in Bitcoin Dev World, but you need to freeze the coins at a minimum.

SPEAKER_03

It's kind of crazy. When I think of fiduciary duty, I think of like an active manager making investment decisions, right?

SPEAKER_02

I don't think of an ETF with a single asset, but but they're still this is why they have risk disclosures in the prospectus. But and it's Crusoe BlackRock, for instance, disclosed the risk recently. So people so we know that they know what's going on. But uh what none of them have done is say, okay, well, we need to do something about this. But I think it'll happen. I think uh they probably feel very strongly, um, non-speaking specifically, that this needs to be addressed.

SPEAKER_03

You you go through a lot of really interesting like geopolitical scenarios, like North Korea, China, US government, and I think the last one is like a US company, tech company, like developing quantum, getting the coins, and what happens. Your what is your most probable scenario of those four?

SPEAKER_02

Number one was likely, but I don't think this is the most likely of all. Like I don't think it's just 51% likely, but I think the modal probability, as in the one with the fattest you know, part of the distribution uh or tallest peak is that a private firm let's say there's no fork, right? So let's say we don't collectively steal the Satoshi coins. It would be that a private firm at the behest of the US government requisitions the coins and gives them to the US government.

SPEAKER_03

So like IBM, Microsoft, Google.

SPEAKER_02

And they do this because they believe that China's bound to do it. And so the government authorizes them to do that. That seems like the easiest option. So that's what my story's about. Okay. Yeah, you didn't read my story. I'm very upset. I read the other parts. Yeah, I mean so you read the nonfiction, not the cool stuff, you know. Like so I think that's gonna happen if there's no fork. Because I think the US is probably the bleeding edge of quantum development. I know that there are efforts underway to do this, to build a at-scale quantum computer within the next five years. Those are underway. Whether they will work, I don't know. But there's hundreds of millions of dollars out there that think they will work, right? So real people put their careers on the line saying, I think these guys are gonna do it. They're gonna build a quantum mainframe, right? They'll build an early version of a quantum chip, and it'll be sufficient. Uh so people think that'll that'll happen.

SPEAKER_03

It it's I mean, in your article you talk about like North Korea stealing the coins or like China stealing the coins. It I could see China being pretty far ahead.

SPEAKER_02

I mean, the valley of quantum, which we haven't spoken about, is is very strategic. So the quantum is most valuable to governments that want to do code breaking, right? It's also valu valuable to like physicists and chemists that want to come up with new battery types or superconductors, or they just want to do simulation of quantum physics. Like that's actually why quantum computers exist in the first place.

SPEAKER_03

You didn't mention AI at all. Like, is quantum not helpful for AI development?

SPEAKER_02

People think it could be, but we don't know for sure yet. Okay. Um there's some stuff that we think like maybe it's good for portfolio simulation. It feels like a tool the way you're describing it, not like a I mean it's just a new genre of computing. Yeah. That uh you can do stuff that you can't do otherwise. Like what we know for sure it can do is simulate physics particles because it's built of physics stuff as opposed to computers, which are built of abstractions. Yeah. Um that that's why it was even uh Feynman even proposed quantum computing back in the day. But yeah, China is probably investing in quantum more actively than the US. However, I think the US is just better at technology.

SPEAKER_03

So like at the government level, China's investing more, but at the corporate level, the US is investing.

SPEAKER_02

At the private level, there's more, yeah, but it probably is roughly equal when you net it out.

SPEAKER_03

So if you want to be bullish Bitcoin quantum, you you're making a bet that US firms are further ahead than China and quantum.

SPEAKER_02

Maybe we should really hope that that's the case.

SPEAKER_03

It's so hard to figure out if that's true. China's so secretive.

SPEAKER_02

So that's a thing. It's kind of like in 19 uh 39 when we were and I were at.

SPEAKER_03

I just read the Maniac book with uh John Von Neumann. It was great.

SPEAKER_02

That's a great recommendation. I actually then I read actually a couple books based after that about the development of the atomic bomb. It's very uncanny.

SPEAKER_03

So you read my book, Rex, but I didn't read your book. It's okay.

SPEAKER_02

It's okay. Um people stopped publishing about nuclear physics because they want to keep the secrets, right? And I would say we're in the equivalent of 1939 quantum time, which is we know that it's possible now. They demonstrated nuclear fission in Germany in 1938, I want to say. And then there was a race, which is get enough fissile material together and find out how to assemble it into a bomb. So that's what we spent the next six years doing, right? And no one was publishing during that time, although all the theoretical physicists knew was possible. That's where we are. And no one's gonna publish their papers when we're getting close and close. There are already quantum papers that are not being published that I'm aware of.

SPEAKER_03

So they they'll no, that's that's a great point. So they'll publish like like within Microsoft or IBM, but only to like their core team?

SPEAKER_02

Yeah. Or maybe they'll share with US government. DARPA has an initiative, quantum benchmarking initiative. Uh NIST, uh the standard setting body has already said government agencies have to phase out quantum vulnerable computation by 2030. That's the government saying no agency can use what is NIST? National Institute of Science and Technology. Okay. So this is an official government-wide directive. So by 2030? By 2030, and by 2035, it's like strictly prohibited. The same government that runs the DMV? Like that. That very same. That very same. So in some ways, they're really good. They're pretty aggressive. Yeah, that's yeah. In some ways they're really awful. But in uh I'm glad that we've got it's an aggressive timeline. So that's that's a thing that kind of sparked my interest. I'm like, hang on, 2030 is like really, really soon.

SPEAKER_03

But what like if like just walking through the theory, like if IBM or Microsoft or Google or whoever develops quantum, the government comes to them, like is Bitcoin like first on their list of things to fix?

SPEAKER_02

Or probably not like so encrypted communications, like at that point, so let's say IBM builds a quantum computer that has 2,000 logical qubits. That's like roughly the amount that we think is needed. Your article says 2030, I think, right? Or 2130 or something. It's not like a specific number. It's like basically it keeps coming down because we develop more efficient ways to do computation. Probably it'll keep coming down. But right now, the state of the art for RSA, um like the normal RSA standard we use is around 2,000 logical qubits. Okay. So if they go to the US government and say, hey, we built this thing, the government will probably start using it to crack data that we stole from China. All right, so encrypted data that was encrypted with AES or with elliptic curve cryptography or RSA. Those are all crackable at that point. So they'll probably do that. But also they'll probably start to get very worried if the administration in 2029 or 30 or 32 cares about Bitcoin. Probably will, right? The government probably has Bitcoin at that point still. They might say, Well, IBM, how far behind you is China? And IBM would be like, uh, two weeks. Probably they're gonna steal our secrets. They're gonna steal our secrets, man. They've infiltrated all the AI labs, they're infiltrated the quantum guys, too.

SPEAKER_03

Yeah, right. I just feel like they're more interested in protecting our nukes than they are in protecting Bitcoin.

SPEAKER_02

Like, sure, it's on the list, but it's just yeah, well, I think the nukes are probably already stuff, but um, you know, they'll probably look at the data going back and forth between the satellites, because that might actually not be upgradable, you know. But yeah, they'll they'll probably care about quantum. So my guess is they'll probably tell IBM or whoever, would you just steal the bitcoins too? Like on the downtime? Like on the weekends at 6 p.m. I don't like just steal and give it to us.

SPEAKER_03

Like, if that happens, it's crazy because without like if people don't know why the coins are moving, the price is gonna crash. Well, yeah. So they have to steal the coins, but they also have to like put out a PR or tweet like five seconds later. Yeah.

SPEAKER_02

So you steal all the coins, but you don't broadcast the expenditure. Right? So you do reverse engineer. So people wouldn't know they stole the coins? Yeah, I mean they could be stolen now and we wouldn't know, right? So you could reverse engineer all the private keys from the public keys, because remember, Satoshi's address is like 40,000. I didn't know that was a real okay. They're in 50 Bitcoin lots because what happened was Satoshi and others mined the coins, 50 BTC apiece, Black Ward back in the day. Didn't move them ever. They're just sitting there, all these different addresses. It would take you a long time to grind through this.

SPEAKER_03

Is there a scenario where the government asks a tech company to steal them privately, like you're mentioning, and just never tell anybody?

SPEAKER_02

No, because you have to broadcast. Because let's say you think China's about to do it, then you have to broadcast the spend on-chain. Why? Everyone knows. Because otherwise China can do it.

SPEAKER_03

Even if IBM and Microsoft steal it proactively?

SPEAKER_02

Well, to actually effectuate the theft, you need to broadcast the spend. Okay.

SPEAKER_03

So everyone all know.

SPEAKER_02

Yeah.

SPEAKER_03

Damn. And you talk to anybody at IBM or Microsoft or Google? I've talked to folks that have left those uh organizations. Yeah. It's the other thing that's interesting is like relative value flows. Like, I'm very bullish on crypto, I'm very bullish on AI. But like the marginal buyer, would you rather buy Bitcoin or would you rather buy AI quantum juggernaut, Microsoft or Google?

SPEAKER_02

Well, yeah, and it you know who also don't have the risk. You know, you don't want to worry that your wealth stored in this thing is gonna disappear with the maybe a two percent tail risk or maybe a ten percent tail, right? We don't know what the risk is. Whatever it is, it's uncomfortable, right? So this is when I make the case of the Bitcoin developers. I'm like, okay, so you're we're in a flood zone right here, right? You presumably, or whoever owns his wife has insurance against that, right? Even if it's just a 1% chance of a flood, you still buy the insurance. In fact, you need it to get a mortgage, I think, is how it works, right?

SPEAKER_03

Depends what zone you're in.

SPEAKER_02

But yeah, so most of Miami's in a flood zone. Yeah. I don't know. Actually, I don't know if I have flood.

SPEAKER_03

I've flipped into this recently. It depends what zone you're in. It's really confusing. Yeah. All right, well, whatever.

SPEAKER_02

We got the analogy. We're in Miami. It's probably gonna flood. We don't know what in. Maybe it has already, maybe next week, who knows? You buy the insurance. Why are the big so why are the Bitcoin developers not spending one percent of their time or five percent of their time, whatever it is, buying the insurance, as in working on the new cryptography, developing social consensus. This is how we're gonna do the fork. Right now we're uninsured. That's not good. I don't think that's good from the capital allocator standpoint. I think they're nervous increasingly. And I think in 2026, this will become an undeniable issue.

SPEAKER_03

It just seems so much easier, and I haven't sold any Bitcoin given this risk, and I'm bullish on us figuring it out, but it just seems easier to just sell and buy a different coin.

SPEAKER_02

Well, probably all coins are vulnerable, um, but other coins have more defined governance. Well, they don't have the Satoshi risk. Some ETH probably has some of that, actually. I'm not buying an ETH right now. Any old coin that's been around and some people died or lost their like that that's a risk. Yeah. ETH, I think, is maybe more exposed in some ways because of how addresses work. So it's very common to re-use your address in ETH, right?

SPEAKER_03

It seems though the Ethereum core developers are more actionable though in terms of potentially figuring out a solution than the Bitcoin core decks.

SPEAKER_02

Oh, yeah. I mean, so Bitcoin is the most exposed because there's the most inertia in Bitcoin governance. We've done two upgrades the last 10 years. Two, ten years. So ETH does hard forks like all the time, right? Solana, I don't even know if they tell people what they're doing. You know, like upgrade your node. Yeah, just like, all right, do it. I love Solana. There's like 10 guys you have to call and they do it, right? I'm sure someone would debate you on this. The point is, this is actually this isn't even crazy. Anatoly's texting me right now. There's actually 15 validators. Um, those guys have people that are in charge, basically, and they can say, okay, well, quantum actually is a little concerning. Vitalik already agreed. Solana Foundation already started piloting post quantum.

SPEAKER_03

It just seems like there'll be a value flow from Bitcoin to Solana and ETH, considering they have credible paths to address it.

SPEAKER_02

Well, and this is why I think the Bitcoiners should devise their own path. Yeah. So because certainly it's gonna be very hard for any blockchain to upgrade a post-quantum. Very hard. You're ripping out the core of the system, which is the cryptography. Uh, but you you're gonna have an easier time doing it if you start now.

SPEAKER_03

I feel like if the Bitcoin core developers took it seriously, messaged it, and I don't know, started the process, Bitcoin's price would be like 25% higher.

SPEAKER_02

I think quantum is weighing on the price. Yeah, and I'm not sorry that I might have contributed to that. Because I think it's an investment today in a better future. So if whatever I've written has influenced some people, I don't know if it has. I'm sure it has. We're sitting here right now talking about it. I believe in biting the bullet always, as opposed to ignoring a bad thing.

SPEAKER_03

You had a really good line in your part two post, the nonfiction one. And it was uh something along the lines of I prefer biting the bullet now versus pleasant fantasies or something like that. It was great.

SPEAKER_02

Yeah, I mean, most Bitcoin dabs unfortunately are in ignorance's bliss world. Like many of them think quantum computing isn't real, for instance. They don't recognize that a lot of things changed in 2025, which is my whole post is like 10 things changed. These are the things. Yeah. This happened, that happened, that happened. They're not paying attention from their standpoint. They're like, oh, this kind of seems like a scam. I know a lot of people invested in these quantum meme stocks, so I'm just gonna put that in the same category as altcoins, which as we know are all scams. And so because those are scams and they're kind of like this thing, then it must be a scam. And so anybody that's investing it uh is a scam artist, and anyone that is thinks the investment is real is being tricked by scammers. So that's their well, that's how they think about it. But we don't need I my argument isn't defeated by uh the fact that many quantum stocks or companies are scams. We only need one of them to not be a scam. But like the see for the threat to be real. I don't even know if we need them at all. Like, why why can't we just all the companies go to zero and maybe the government evolves to take it? Yeah, like Microsoft, IBM, whatever. Like they'll like Brigitte and IONQ and D-Wave could absolutely fail, and like it doesn't matter. Someone's all we need is for one guy to build a powerful quantum computer.

SPEAKER_03

What was the most credible counter argument to your entire thesis that you found after publishing it?

SPEAKER_02

There were none. I know it sounds crazy because it's like Nick, really because you did a philosophy degree, you meant to be a serious person, like, but there were none, nobody tried. You mentioned quantum mechanics not being real. So yeah, I mean that wouldn't defeat the thesis, but also our phones wouldn't work if quantum mechanics wasn't real.

SPEAKER_03

How is quantum mechanics not real if IBM and Microsoft and these folks already have small test pilots of of these machines working? I mean it quantum mechanics is real.

SPEAKER_02

Yeah, I think a lot of the systems that we depend on from modernity incorporate quantum mechanics into the Okay, so it's not a credible counterargument, is what you're saying. The only one the only credible counterargument, well there'd be two. You could say one, uh when it comes down to it, Bitcoin developers are gonna figure it out, and we don't need to have the full answer today because maybe it's a problem for ten years' time. That's not a very Bitcoiny way of dealing with problems though, right? That'd be the first time we tackled something that way in a very lackadaisical manner. The other way is well, uh we think, you know, okay, we have to grow logical qubits by three orders of magnitude and fidelity by several orders of mag, and physical qubits by x many orders of mag, and coherence has to be two orders of mag. We think that's a 2050 thing.

SPEAKER_03

But even if it's a 2050 thing, we still need to figure out what we're doing with Satoshi's coins. Yes. Yes. So it's not really a solution. I just like the first personal problem I have with the thinking is like even if they figure it out tomorrow or in 2050, you still have to figure out what you're doing with the coins.

SPEAKER_02

Yeah, the coins, and this is people say, oh well, all the banks are gonna go down and nothing's gonna work, and the planes are gonna fall out of the sky, and you know, every database will fail. That's not true. And you know why? Because there were people to manage those databases. Every one of those databases run by a corporation or a person, and they can change it. Bitcoin is a very unique kind of a database where we replicate it amongst thousands or millions of people, and then we have this like real arcane way of deciding what the truth of the database is called proof of work. Bitcoin is different, right? So people constantly say this to me. They say, Well, don't worry about quantum because like if it destroys Bitcoin, it destroys everything else. That's not true. Bitcoin is actually the only thing that can't upgrade, along with some like really old school, antiquated like physical devices where the cryptography is flashed into the memory and can't ever be upgraded because it's physical, right? So Bitcoin is in a very unique class of things that can't upgrade easily. When I was doing and then banks and whatever, they'll get they'll upgrade the Fed, they'll upgrade the database. The government's told them.

SPEAKER_03

So maybe this is high on the list for an IBM and a Microsoft, considering everything else can be upgraded relatively easily.

SPEAKER_02

Well, they would need to be sign they need the government to sign off on it.

SPEAKER_03

On a like a no-action letter.

unknown

Yeah.

SPEAKER_02

If I looked into it, there's like you can look at maritime law. Like uh, there's I spent a lot of time reading about whether people that recovered coins from ancient shipwrecks were able to claim the coins. Were they able to? There was a famous one in Florida in the 70s, 80s. He spent 16 years looking for this. You wrote about this. And his wife and his son died in the in the course of this. Uh so it was a really like Faustian thing. Like he really suffered to get and then he got he found the shipwreck. And he dug up all the coins, $500 million worth of Spanish gold. God from the 1600s, and Spain sued him over it, and he won. But it cost him everything. So he kept the money though. Yeah.

SPEAKER_01

That was the last time.

SPEAKER_02

And ever since then. The law is really clear, actually. It just doesn't belong to you. Even if it's the company doesn't exist anymore, the empire has fallen. Where does it go to? It belongs to Spain, typically. Spain will really aggressively assert their right or whatever successor nation that well that's not like mega positive for a IBM or Microsoft to go looking for old coins. Yeah, basically there's one kind of exception, which is a little ship name of the Titanic.

SPEAKER_03

Oh, sorry, Leonardo DiCaprio?

SPEAKER_02

CK Winslow? Yeah, that's right. So the Titanic is considered a salvage in possession of a specific company that was set up to salvage the Titanic. Okay. So you'd set a submersible down, and it's like little claws, like get the jewelry or like whatever.

SPEAKER_03

Not with an Xbox controller, but a real submarine.

SPEAKER_02

Yeah, like what was the the thing that she rose tossed into the water at the end of the movie? Oh god. Whatever that was. So they went and got that. Okay. And this company was allowed to exclusively salvage the wreck. Um, and no other company was allowed to, because they were doing a good job of managing it. But they weren't presumed to be the owners of the wrecked, even though they have access to it exclusively. So this is called salvage and possession. So this is like a doctrine that exists. So probably whoever uh requisitions the Satoshi coins for cumbersome would not be considered the true owner of those coins legally under US law, as far as I can tell. But they might be entitled to a finder's fee. And so, but the problem is that how do you, after the fact, prove that you're Satoshi and that the, you know, you're the like because cryptography doesn't mean anything anymore.

SPEAKER_03

It's crazy thinking through like if it's bullish or bearish, the US government having the strategic reserve, any other Bitcoin it confiscates the next decade, plus possibly Satoshi's coins, like there's a pretty big incentive for them to either make sure this really works or to kill the network if they wanted to.

SPEAKER_02

Well, the US government is a huge incentive to develop quantum computing anyway, just so we can spy on China, right? And decrypt all of their secrets that we've been harvesting, right? As a side, yeah, like if we think Bitcoin is exposed to China stealing all the Stoji coins, we should preemptively steal them.

SPEAKER_03

Feels like the imitation game, round two. Yeah. Yeah.

SPEAKER_02

It just really is.

SPEAKER_03

Damn. Anything we didn't talk about that we missed?

SPEAKER_02

I'm glad we got to the fire points of maritime law.

SPEAKER_03

Yeah, me too. I should we do we should do a separate pot just on ships and I did a lot of research.

SPEAKER_02

So basically, as it turns out, like even if you find a shipwreck today, you're totally boned and you're not allowed to keep the coins.

SPEAKER_03

It's very I feel like if a Microsoft or IBM got like five or ten percent of Bitcoin, like not, or Stoshi coins, like not the end of the world for protecting.

SPEAKER_02

Yeah, and actually, I'm probably okay with a domestic firm or the government getting the coins. Like, I've never been of the school thought that they're out of circulation. Like those are the supply of Bitcoin is 21 million. It's not 19.1 million, right? I just like Bitcoin is gonna try and redefine it as that, but that's not what it was.

SPEAKER_03

But even if like North Korea or China got the coins, like how would they even sell that many? Like, I don't like you block a couple key exchanges and like I think North Korea tends to hold their Bitcoin, right?

SPEAKER_02

It's kind of bullish, and like sometimes sell it off. Yeah. So like even if North Korea or China got it, I can see the reasoning for not as a community stealing or freezing the coins.

SPEAKER_03

I just don't understand how they'd ever sell it. Like they're kind of effectively locked based on the rate at which they can sell.

SPEAKER_02

Yeah, and it's think about like uh the gold, you know, we Europe went to the new world and we discovered all the gold. Well, frankly, we stole it. Well, I say we. I don't know. They you're grouping yourself in here. They sold the gold, and then there was a lot of inflation in Europe for the next hundred years, right? It was actually not that much, it was like 1.5% inflation on average for 100 years, not that much inflation. But they didn't sell the gold, you know, they kept it, right? It became part of their treasury or whatever. Well, actually, I think the UK did actually sell their gold not too long ago. So what a great move. If this happened, wouldn't China or this would just be a way of accelerating sovereign adoption. Yeah. It's the problem is just that it's our adversaries that have it.

SPEAKER_03

It'd be nice if like the Bitcoin strategic reserve was legislative like long-term legislation. This way, if the comp if the tech companies ever requisition Stoshi's coins, they're permanently locked in the government.

SPEAKER_02

Yeah, it should be enshrined, and the government should say as part of the deal, okay, we commissioned this company to steal the coins. We're gonna hold on to these coins. That's what they should do. But we don't really know where the reserve is or I mean, selling 10% of what they steal.

SPEAKER_03

So what you you mentioned Stoshi's coins, what, 8% of the network or something?

SPEAKER_02

So there's like roughly a million that are presumed to be Zatoshis, but there's another six, seven hundred thousand that are early miners that are in the same category.

SPEAKER_03

Got it. So it's like 1.7 billion. Like 100, 200 billion. So I don't yeah, that's kind of tough. But so if if Microsoft or IBM gets 10, 20 billion, like not the end of the world. Well, they they kind of a lot of they deserve that as why, right? And it's not hard to sell that to a sovereign nation.

SPEAKER_02

Like you could Yeah. This quantum was expensive to build in the first place. So Bitcoin is accelerating the development of quantum for sure. It's happening today.

SPEAKER_03

Yeah, damn. So you haven't so should I ask you in six months if you've sold any Bitcoin?

SPEAKER_02

Yeah, I mean, I can tell you what's gonna happen. The developer's gonna keep grumbling and they're gonna keep doing nothing and criticizing me. And uh I'm gonna be uh increasingly irate as time goes on.

SPEAKER_03

It's like the fifth time they've canceled you. What's what's left? Very efficient. They they just have like a recurring thread. Uh Nick, thanks so much for coming on, man. Really appreciate it. Yeah.

SPEAKER_00

You're now plugged into the Delphi podcast podcast.

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Tommy Shaughnessy

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