issue 218 - week of 12-13-24
curating the good stuff for the casual bitcoin enthusiast each week
key topic: Google’s “Willow” & Quantum Computing’s Potential Effect on Bitcoin
I used Google’s NotebookLM and added all sources I could find related to this topic and here is what it produced:
Quantum Computing and Bitcoin: A Briefing Document
This briefing document reviews the main themes and important ideas from the provided sources regarding the potential threat of quantum computing to Bitcoin and the ongoing research into mitigating such threats.
Key Takeaways:
Not an Immediate Threat: While Google's recent advancements in quantum computing with its Willow processor reaching 105 qubits have sparked concerns, experts agree that it doesn't pose an immediate threat to Bitcoin's security. (@adam3us, @bensig, @davidmarcus)
Scale and Error Correction are Key: Breaking Bitcoin's encryption requires millions of error-corrected qubits, far beyond the capabilities of current quantum computers. (@adam3us, @bensig)
Bitcoin's Two Encryption Methods: Bitcoin uses ECDSA 256 (vulnerable to Shor's algorithm) and SHA-256 (more resistant, requiring Grover's algorithm). Both would require massive quantum computing power to break. (@bensig)
Satoshi's Coins are a Canary: The movement of Satoshi's unspent coins could signal a breakthrough in quantum computing as they are vulnerable due to the early use of pay-to-public-key (P2PK). (@Bitcoin Q&A: Is Quantum Computing a Threat?)
Mitigation Strategies Exist: The Bitcoin ecosystem can adapt by implementing post-quantum cryptography algorithms, potentially through upgrades like Schnorr signatures or exploring solutions like Great Script Restoration (GSR). (@Bitcoin Q&A: "Quantum Supremacy", @davidmarcus, @n1ckler)
Address Reuse Increases Risk: Reusing Bitcoin addresses increases vulnerability to quantum attacks. Best practice dictates using an address only once. (@Bitcoin Q&A: Is Quantum Computing a Threat?)
Broader Implications: Quantum computing poses a significant threat to various systems reliant on classical cryptography, including financial systems and national security, making Bitcoin a comparatively less attractive target for early attacks. (@Bitcoin Q&A: Is Quantum Computing a Threat?, @davidmarcus)
Supporting Evidence:
Adam Back states: "No you can't increase entangled qbits by wiring lots of 105 qbits chips. We are not remotely close to 1m qbit computers this decade or likely next either." This highlights the technological gap that still exists.
Ben Sigman explains: "Bitcoin relies on two types of encryption: :one: ECDSA 256: Vulnerable to "Shor’s algorithm," but cracking it would require over 1,000,000 qubits... :two: SHA-256: Even tougher—requires a different approach (Grover’s algorithm) and millions of physical qubits to pose a real threat." This clarifies the types of encryption used and their relative resistance to quantum attacks.
Andreas Antonopoulos emphasizes: "The [real] question is, how many qubits of quantum computing [power] do you have? The number of qubits you would need to break [the current cryptographic algorithms in Bitcoin]... and most blockchains], is greater than the wildest speculation of what intelligence agencies might have." He stresses the scale of quantum computing power required and the unlikelihood of covert attacks on Bitcoin.
David Marcus argues: "when quantum computation hits, banks, nations’ secrets and so much more will become vulnerable before Bitcoin will. Bottom line: post quantum cryptography will be in place before we get there." This reinforces the idea that other systems are more vulnerable and that solutions will be developed before Bitcoin is critically threatened.
ncklr highlights an experimental tool: "While primarily an exploratory project, this tool provides valuable insights... The post-quantum Bitcoin script verifies a "Winternitz One-Time Signature"... A significant limitation is the size: the script is 22kB, with a 2kB witness... I believe there's limited room for optimization using the standard W-OTS scheme." This demonstrates the ongoing research and experimentation with post-quantum cryptography solutions for Bitcoin, albeit with existing limitations.
Conclusion:
While quantum computing presents a potential future threat to Bitcoin, it is not an immediate concern. The current state of technology is far from achieving the scale and error correction required to break Bitcoin's cryptography. Moreover, the Bitcoin community is actively researching and developing post-quantum solutions to ensure long-term security. The fact that more critical systems are also vulnerable provides further incentive for global advancement in post-quantum cryptography, potentially benefiting Bitcoin in the long run.
news
Trump Confirms Bitcoin Reserve Plans—$15 Trillion Price Boom Predicted.
https://www.forbes.com/sites/digital-assets/2024/12/14/trump-confirms-bitcoin-reserve-plans-15-trillion-price-boom-predicted/
Fidelity Coin Report. Bitcoin (BTC): An overview of Bitcoin and its potential use cases.
https://fwc.widen.net/s/kz8ddvftg5/fda-bitcoin-coin-report---12-06
Sizing bitcoin in portfolios.
https://www.blackrock.com/institutions/en-zz/insights/portfolio-design/sizing-bitcoin-in-portfolios
BlackRock recommends bitcoin portfolio weighting of up to 2% for interested investors.
https://www.reuters.com/markets/us/blackrock-recommends-bitcoin-portfolio-weighting-up-2-interested-investors-2024-12-12/
Bitcoin proxy MicroStrategy to join the Nasdaq 100 and heavily traded “QQQ” ETF.
https://www.cnbc.com/2024/12/13/bitcoin-proxy-microstrategy-to-join-the-nasdaq-100-and-heavily-traded-qqq-etf.html
MicroStrategy Acquires 21,550 BTC and achieves BTC Yield of 43.2% QTD and 68.7% YTD; Now Holds 423,650 BTC.
https://www.microstrategy.com/press/microstrategy-acquires-21-550-btc-and-achieves-btc-yield-of-68-7-ytd-now-holds-423-650-btc_12-09-2024
Perianne Boring Predicts Trump’s 2025 Economic Policies Will Drive Bitcoin Price to $800K.
https://bitcoinmagazine.com/markets/perianne-boring-predicts-trumps-2025-economic-policies-will-drive-bitcoin-price-to-800k
Bitcoin is up by 138% this year. It is a nonsense-free rally.
https://www.economist.com/finance-and-economics/2024/12/12/bitcoin-is-up-by-138-this-year-it-is-a-nonsense-free-rally
Can Bitcoin Get to $200,000 in 2025?
https://www.fool.com/investing/2024/12/13/can-bitcoin-get-to-200000-in-2025/
Why It’s Not Too Late to Invest in Bitcoin.
https://bitcoinmagazine.com/markets/why-its-not-too-late-to-invest-in-bitcoin
Dalio Predicts Global Debt Crisis, Backs Bitcoin & Gold.
https://www.zerohedge.com/markets/dalio-predicts-global-debt-crisis-backs-bitcoin-gold
Texas House introduces bill to establish a strategic bitcoin reserve.
https://www.cnbc.com/2024/12/12/texas-house-introduces-bill-to-establish-a-strategic-bitcoin-reserve.html
Activist Starboard Value Takes Stake in Bitcoin-Mining Company Riot.
https://www.wsj.com/finance/currencies/activist-starboard-value-takes-stake-in-bitcoin-mining-company-riot-82b3796f
Why Trump Must End Capital Gains Tax On Bitcoin.
https://www.zerohedge.com/crypto/why-trump-must-end-capital-gains-tax-bitcoin#google_vignette
Leak Reveals Russia’s Bid For Bitcoin Reserve Amid Huge 2025 Price Predictions.
https://www.forbes.com/sites/digital-assets/2024/12/10/leak-reveals-russias-bid-for-bitcoin-reserve-amid-huge-2025-price-predictions/
media
Podcast. The Investor’s Podcast: Jack Mallers on Bitcoin 2025 Expectations and Strike's New Features (BTC212).
Cointelegraph. How Much Higher Will Bitcoin Go? | Mark Yusko’s 2025 Predictions.
CNBC. The best policy for bitcoin is to take a hands-off approach, says “The Bitcoin Standard” author.
Podcast. What Bitcoin Did: REPRICING THE WORLD IN BITCOIN w/ Jeff Booth.
Africa Bitcoin Conference. The Future of Bitcoin - Jack Dorsey.
YouTube. DotKrueger: The Case for the 7 Year Bitcoin SuperCycle.
Podcast. The Bitcoin Layer: Bitcoin’s Path to MILLIONS: Strategic Reserves, New Money Creation, and Unprecedented Growth.
tweets
(Substack blocking direct Twitter links at the moment)
https://x.com/adam3us/status/1865709476189225238
https://x.com/Vivek4real_/status/1865782541388509192
https://x.com/Cointelegraph/status/1865100763355320756
https://x.com/Cointelegraph/status/1839974935365890448
https://x.com/CryptoCon_/status/1866171516800397365
https://x.com/BitcoinMagazine/status/1866173690586468469
https://x.com/DannyCobbett/status/1866178721490579832
https://x.com/fred_pope/status/1866208450298139097
https://x.com/TheBitcoinConf/status/1866231694791205004
https://x.com/PrestonPysh/status/1866238997863002209
https://x.com/bensig/status/1866270864271884548
https://x.com/RadarHits/status/1866434602098983401
https://x.com/BitcoinMagazine/status/1866467290495279460
https://x.com/adam3us/status/1866543632792137921
https://x.com/OnChainCollege/status/1866614586994041024
https://x.com/roxomxyz/status/1866612177076945343
https://x.com/jerallaire/status/1866733181728366593
https://x.com/balajis/status/1866737662079689066
https://x.com/Jeyffre/status/1866748799190004053
https://x.com/MacroScope17/status/1866955343135379609
https://x.com/Vivek4real_/status/1866958397322695169
https://x.com/TheJuanSC/status/1866945871197405306
https://x.com/saylor/status/1867228175081857379
https://x.com/BitcoinMagazine/status/1867243887363797077
https://x.com/bensig/status/1867318929867387173
https://x.com/CryptoJelleNL/status/1867166598424920494
https://x.com/BitcoinMagazine/status/1867509426292134178
https://x.com/woonomic/status/1867509191751217391
https://x.com/dotkrueger/status/1867430969684480198
https://x.com/bitharington/status/1867548273537597527
https://x.com/EricBalchunas/status/1867741244241371219
https://x.com/LynAldenContact/status/1867862425053339822
https://x.com/stackhodler/status/1867911232050577490
https://x.com/QuintenFrancois/status/1867870694891045173
https://x.com/adam3us/status/1867887386945876256
https://x.com/davidmarcus/status/1868053066651770936
If you think we’ve missed something important, please send it to us and we’ll be sure to add it to next week’s newsletter… And please share!
