Welcome in to This Week in Bitcoin, episode 98.
My name is Chris, ChrisLAS.com, JupiterBroadcasting.com.
Okay, let's just get this out of the way.
No April Foolin' in this episode, I promise.
There's just way too much going on for that.
But if you do see some funny Bitcoin-related April Fools, boost them in.
We could have a good laugh next week.
But this week, I think the joke's kind of on everyone else.
The mood in the wider market is shifting fast.
It's like a new existential panic is setting in.
And it might be the creeping realization that you just can't fight the waves of history.
But what I find remarkable is during all of this,
Bitcoin demand is being built by the chaos itself, one event at a time.
And this week, more groundwork was laid for that future demand.
And I'll get to that in a second.
But first, we have to go to the start of this week, when Fed Chair Powell sat down during
a little Q&A and gave perhaps his clearest warning yet.
The U.S. debt is on an unsustainable path, and he used the most plain language he's ever
used.
Before I play that, just a little context.
We just hit April, so as of March 2026, the U.S. national debt now sits at over $39 trillion.
Just constantly fueled by a flywheel of chronic deficits and rising interest payments.
Well, this flywheel of problems, well, you see, it's not the Federal Reserve's problem.
Oh, no, you see, they have their mandate, and they're doing everything right.
At least, that's according to J-PAL.
What's clear is that our debt is growing much faster.
The federal government debt is growing substantially faster than our economy, and that ratio is going up.
And, you know, in the long run, that's kind of the definition of unsustainable.
The level of the debt is not unsustainable, but the path is not sustainable.
We'll come back to that.
And so it's really important that we get back to we don't have to pay the debt down.
We just need to have primary balance and begin to have the economy actually growing better, growing more quickly than the economy.
It will not end well if we don't do something fairly soon.
This is not the Fed's job, of course, and I pretty much limit myself to those high-level points, which essentially everyone ignores.
Okay, you said a couple of really important things in there, but first I just have to address the irony of it all.
It's as if the central banks all over the world have not been enabling their governments.
Just look at during the COVID years.
The U.S. government ran massive deficits via stimulus packages like the CARES Act, the American Rescue Plan, etc.
The Treasury issued trillions in new debt to fund payments for business bailouts, unemployment boosts, and more.
And so the Federal Reserve didn't just sit there from the sidelines and just do nothing.
It stepped in as the buyer of last resort through quantitative easing at an unprecedented scale.
They printed about 40% of the money supply.
And their balance sheet exploded from $4 trillion pre-COVID to about $9 trillion.
And what that did is it suppressed interest rates.
And it kept borrowing costs artificially low for businesses and for the government.
So without the Fed vacuuming up all that debt, yields, they would have spiked.
they would have made deficit spending way more politically expensive.
Instead, it was politically free.
So it's not like central banks are completely blameless here,
but I guess they're technically correct.
Powell is right on the economics of it.
The Fed's mandate is price stability and maximum employment.
Yes, they have two primary mandates.
Not fiscal policy.
That's Congress.
But pretending like the Fed was a passive bystander?
It just ignores how all the central banks have become the de facto backstop for government borrowing.
So the governments just keep going.
It's this classic case of how the central bankers, they want credit for when things are stable.
And then they want no blame when the long term math doesn't work in their favor.
If they do this all the time.
But there's an unspoken aspect of this that was in the room.
And it didn't really need to be said out loud because everyone is on the same page.
And that is with the war in Iran, the math for the wonks is looking real bad.
So let's bring in NBC's business correspondent, Brian Chung.
Brian, good morning.
So we've crossed the threshold now, $4.
How much higher do people expect these to go?
Yeah, we were just talking yesterday about the possibility of breaching this.
And here we are.
First time we've seen prices over $4 a gallon on average nationally since August of 2022.
As you point out, in a number of states, it's already well above that.
states like Arizona, California, Florida, just I think $4.12 this morning. Again, what's so
remarkable? I would kill for $4.12. It's funny how Washington never gets a mention. About this,
though, is the speed by which this happened. The war has been going on for about a month or so,
but gas prices during that period of time have risen by over a dollar per gallon now.
Actually, the real issue, I mean, gas prices that hurts consumers, it matters, but what really
impacts the economy is diesel. I want to point out that all of this has to do with the Strait
of Hormuz. Looking forward, the question about whether or not gas prices will continue to rise
from where they've already risen. Well, the question is whether or not more ships are going
to be able to travel through the Strait of Hormuz, as you see on that live map. There's just not a lot
of action there. And now that we're hearing that the president says he's willing to end this war,
even if the Strait of Hormuz remains closed, will furrow a passageway where 20 percent of the world's
oil goes through. That means prices could remain elevated, if not even go higher from here.
So with oil and gas increasing, what about some of the wider ripple effects that you think might
play out here. Yeah, well, if you think prices at the pump are crazy, take a look specifically
at diesel costs, where prices are on average well above $5 a gallon. They're above $6 here.
I do see a couple of places where it's like $5.96, but I've seen multiple places where diesel is over
$6 a gallon. $1.70 from where it was prior to this war beginning. And you think about diesel,
that's what those big rigs that transport things across this country, food, things at your local
retailer. Well, if the cost of transporting gets more expensive, then guess what? So will everything
else. So what they're focused on is sort of the inflation anxiety of this entire thing. But I
think really gas prices going up, that matters. It could be a temporary, temporary could be six
months, temporary could be a year, you know, but it's temporary. But what it does do is it puts a
drag on GDP growth. So even when the U.S. pulls out, it's not quite clear how the flow will be
after the U.S. pulls out. What JPAL was saying earlier that I said we wanted to come back to
is they don't really care that the debt is $39 trillion. It's not the number that matters,
even though $39 trillion scares the pants off me. It's about the ratio of debt to GDP.
And that's why everyone is on the edge of their seats right now, because we need GDP to grow like
crazy, because we know debt is going up like crazy, and there ain't no stop in that train.
We know that. But we don't know what GDP looks like for 2026 yet. We don't have that data. It was going in a good direction. But with the Iran war spending, higher fuel prices, that drag has not been factored into the GDP price yet. We haven't gotten solid numbers yet.
So the panic that's setting in for the market is that this could get to be a much worse ratio very soon, depending on how bad the situation in the strait goes.
And that's why they're all having a bit of an existential panic.
But as Bitcoiners, we had this figured out a long time ago.
This is a casino style rat race that all these people are in.
Today, it's an energy shock that everybody's concerned about.
Last week, it was government shutdown and, of course, Middle East conflicts.
The week before that, it was AI might be too good, software is over.
The week before that, it was panic that AI might be total crap and it's a bubble.
Right. It's just ridiculous.
Bitcoiners figured it out.
You buy Bitcoin, you hold it and you don't worry about the markets.
And it would stand to reason that the banks would, A, see the upcoming financial situation and understand the math.
I think that's a reasonable thing these banks could be doing, at least some of them.
I think that's a reasonable assumption, A.
And I think, B, another reasonable assumption is banks like making money.
And they're going to find a way to sell a solution to any economic problem they can.
And this weird alignment of your incentives and their incentives is what's building a market for Bitcoin.
It starts to create more and more demand.
And the inevitability of the fiscal situation becomes more obvious to people.
It creates even more demand.
So right now, people like you and me, we're the ones talking about these problems, not regular folks.
But that is already beginning to change.
Think about before COVID.
Normies never talked about interest rates, inflation, the Federal Reserve.
People didn't know who Jerome Powell was.
All of that has begun to shift.
There's a real Overton window that is shifting here.
With yields, this is Fannie Mae prepares to accept crypto-backed mortgages.
Diana Olick has the details on what crypto-backed mortgages are.
Diana.
That's right, Dom.
It's not the first crypto-backed mortgage, but it is the first to comply with Fannie Mae requirements for purchase.
Better Home and Finance, together with Coinbase, are offering a new mortgage that would allow homebuyers to use their crypto assets as collateral.
It falls under Fannie Mae guidelines, so it can be bought and securitized by Fannie like any other conforming mortgage.
All right, how does it work?
It's a little tricky.
The borrower takes out a regular mortgage with better and then a second loan backed by either Bitcoin or U.S. dollar coin and held in a Coinbase account.
I believe she said Bitcoin. I'm pretty sure she said Bitcoin.
I love that. I did not hear that the first time.
This is what I'm trying to get at here is a big deal because you've got you've got Fannie Mae that is introducing a Bitcoin adjacent product that's baking it into the cornerstone of the American dream, the mortgage.
I'll back it up a little bit because I got distracted by the Bitcoin.
And I want you to kind of absorb what this means at a larger financial signaling level.
...by Fannie like any other conforming mortgage.
All right.
How does it work?
It's a little tricky.
The borrower takes out a regular mortgage with better and then a second loan backed by either Bitcoin or U.S. dollar coin and held in a Coinbase account.
The second loan would fund the down payment on the first loan.
That way, the borrower doesn't have to sell their crypto.
Both loans are held by better and the crypto assets once pledged cannot be traded.
Even if the value of the crypto falls, nothing changes on the loans as long as the borrower keeps making the monthly payments.
You know, I've seen versions of this where people take out a mortgage and then another loan.
And I forget what those are called, but it's tied to the mortgage loan to pay for the down payment.
And then you essentially have two payments you're making per month, but you hope that the overall payment is still affordable.
And I guess that aspect, the down payment now, is going to be done with secured Bitcoin.
And so you could, you know, if you had $50,000 worth of Bitcoin or $30,000, whatever it would be for a down payment.
I don't know, probably a lot more than that with a modern house.
But you could use your Bitcoin, you could put it down as collateral, and you don't have to sell it.
And there, of course, is a period of time where they have it on lockdown, so that way you can't trade it.
But you do get it back eventually.
The crypto falls, nothing changes on the loans as long as the borrower keeps making the monthly payments.
We have now finally created the infrastructure rails to enable any tokenized asset in America
to be able to be pledged to help someone afford to buy a home.
So it starts with Bitcoin, starts with USDC, but going forward, it can be Apple stock or Amazon stock or any publicly traded mutual fund.
Now why do you suppose they need to do this Because the dollar is not serving this function anymore So you going to see experimentation like this This is just going to be one of many products In fact it one of many that is already in the works that are just experimenting with different
iterations on this idea. It's probably going to be years before there's a version of this that
appeals to you and myself. That's just the reality of it. But Fannie Mae getting into the game is
definitely a signal to other players. And we're going to see more and more of these kinds of
products. The system is going to be incentivized to let you use whatever scarce thing you have,
and Bitcoin is going to be the purest version of that. This is just going to be a market demand
created by the macro conditions. And here's the ironic part. I got to get the bell out for this.
The ironic part is most people are not even going to understand the dynamics that are driving them.
They're going to respond to protect their resources, and they're going to go where their
resources are treated best and where they can get the most. For a lot of people, that's going to be
Bitcoin. Not for everybody, but for a lot of people. And I really want you to understand the
inevitable market that's building. Even if Bitcoin's trading below its all-time high right now,
and even if it were to decline a bit further, it doesn't mean any of these fundamental market
conditions have changed. And Lynn Alden was on Peter's podcast recently. I'll put a link in the
notes. And this clip is a collection of moments from that podcast where I think Lynn really
zeroes in on the point I'm trying to make here. Do you believe we're living through a
slow financial collapse that the majority of people don't even recognize is happening?
I do. Yeah. And people kind of look around and say, why does it seem like everything's
more expensive? I'm still earning money, but it just doesn't feel like it goes as far.
And a lot of times they're right. Every currency system in the world has to grow or die,
at least the way they're currently designed.
People feel it not just through taxes,
but then through their wages getting debased
and their savings,
if they're holding currency and bonds getting debased.
And you kind of keep adding new layers to the system
until by the end, it resembles theft.
The best product Coca-Cola ever sold was their bonds,
not their Coke.
And what they're basically doing
is they're shorting the currency.
You know, they're literally shorting
the thing that you're holding your bank account
and that you're saving in
Governments are shorting it.
Corporations are shorting it.
Wealthy individuals are shorting it.
The system is based on having people hold the currency in the bonds while other people
are literally shorting it.
And the least able to short it are ironically those at the bottom of the income stack.
They're kind of getting the full damage of the inflation.
So they're socializing the debt that the private sector has built up onto the public
to protect the private sector to keep the economy going.
take the risk away and lock in all the gains you've had and socialize the losses.
Once you get to the part where there's this much debt on the sovereign ledger,
there's really no way out of it other than they're going to default.
The lever you have pulled breaks is not in service.
Please make a note of it.
The course is locked in and the math, unfortunately, doesn't lie.
It's just going to take time for people to realize they're being slowly boiled.
And Bitcoin will be a cold glass of non-sovereign risk.
You know, and the thing is, is like we can't underestimate the power of the ability for people in this situation to buy fractions on their phone or earn this through their work or receive it as gifts.
You're going to be able to do that more and more as they tokenize absolutely everything.
But that's native to Bitcoin.
It always will be. There will always be copycats. But this is a native aspect. The fractional aspect of Bitcoin, the sovereignty, the scarceness of it, the fact that there are so many ways to get it safely and securely on your phone or, of course, through a web browser.
This stuff makes a difference and it will all add up as more and more demand gets developed just simply by the inevitability of the macro situation.
All right, I got a question for you. I'd like you to boost in and give me your take.
This week, David Sachs announced that his time as Trump's crypto and AI czar has ended.
Trump's AI and crypto czar David Sachs said his role as special government employee came to an end,
but he will remain as part of the president's Council of Advisors on Science and Technology.
Sachs told Bloomberg Thursday that he had, quote, used up his 130 days as special government employee
and is joining the President's Council of Advisors on Science and Technology.
Here's a quote from Sachs.
He said, quote,
I think moving forward as co-chair of PCAST,
I can now make recommendations on not just AI,
but an expanded range of technology topics.
So yes, this is how I will be involved moving forward.
Okay, so we have David transitioning to a new role,
and he didn't even mention crypto.
And then he had an interview with Bloomberg shortly after this,
and he never mentioned crypto in the entire 10-minute interview.
And yet he's leaving when the Clarity Act and other reforms are still unresolved.
We never did get a count on the U.S. government's Bitcoin balance.
So all of this feels like maybe a shift in priority from the Trump administration.
And just as people were speculating about that, your buddy Donald Trump took a moment in front of the microphone to seemingly try to signal that they're still thinking about Bitcoin at least.
And Bitcoin, superpower of the world, Bitcoin's very powerful.
It's all becoming powerful.
So many people now, they want to pay you in crypto.
They want to pay you in Bitcoin.
And we have to be at the top of it in all of these, call it an industry.
So let me have it.
Let's give David Sachs a TWIB exit interview as the crypto czar.
How do you grade the U.S. government's first ever and maybe only ever crypto czar boost in?
And let me know.
I'll read it in next week's episode along with your favorite April Fool's Bitcoin jokes.
Should be a fun boost segment if you actually do it.
I'll try to remember to put it in the show notes because I'd love to hear your take on David Sachs' tenure.
Well, coming up on the show, it's your boost, a little FUD busting, some big updates, and a final clip of the week.
So I'll just mention, you can support the show just by doing what you're probably already going to do.
If you want to start stacking sats with River in the U.S., use my link in the show notes.
It's a great way to stack sats in the U.S.
If you're in the U.S. or Canada and you're all about self-custody, you don't even want the service to have a wallet for you,
check out the Bitcoin Well, an amazing automatic self-custody Bitcoin platform.
If you want to stack sats while you're paying your bills and doing your whatnots, it's the fold card link in the notes.
Now, if you've got some sats on Lightning and you want to convert them to a gift card in just seconds, the Bitcoin company.
Others offer this, but the Bitcoin company only does Bitcoin and they let you log in via Lightning so you don't have to create an account.
And if it's time to get access to your Bitcoin value, your liquidity, without selling your Bitcoin, check out Salt Lending.
They have some nice features in case the market gets a little rocky, too.
Link for all of that in the show notes.
Thanks for supporting the show just by doing what you do.
All right, let's get to some of them boosts.
And now, as the French say, it is time for le boost.
And hybrid sarcasm is our baller booster this week with 50,000 sats.
Hey, rich lobster!
Ha! Sending you some of the sats I earned from my River cash dash in March.
Thanks for the great show.
Well, thank you, Hybrid, and I'm glad that's working out for you.
I think that's one of the great features of River.
And thank you for thinking of the show. Really appreciate that.
Bobby Pin comes in with 21,000 sats.
1.21 gigawatts!
I loved having an episode with Wes and Brent.
Now I have so many more things I want to do with my node.
Yeah, it's a one-off. It was a one-off,
but I really wanted to kind of capture some of the more advanced node operation stuff
available for Bitcoin nodes and Lightning nodes right now.
Now, why we did not get to beginner stuff, well, I'll talk about that in just a moment.
Gene Bean's here with 4,896 sets.
Everything's under control.
This episode was fun to listen to, but I'm still hoping to hear one on setting up and running a node.
Keep up the good work. This podcast always jumps in front of my listening queue.
So, the reason why I opted not to do that, because that was my original plan,
but it is a very it depends solution.
There isn't a go-to,
I don't just recommend you use Start9
or just use Umbral or just use NixBitcoin
or just have AlbiHub Cloud, right?
Like it really depends.
And so the problem is
that is a research and discovery journey
people kind of need to do on their own.
But what I wanted to demonstrate
is once you have a node
and Lightning node operational,
There are new modern ways to manage it that are really not all that bad.
I hope that makes sense.
And it's not that I'm opposed to doing the newbie episode.
I'm just not sure how to do it in a way that's useful and actionable, but is also agnostic to any particular implementation.
You know what I mean?
It's a really tough one.
So that's kind of where I'm at.
That's kind of where I'm at, but I'd like feedback on that.
Gene Bean continues.
Well, let's hear it, good buddy.
In Linux Unplugged, you've been talking about the possibility of age verification stuff coming to Linux and elsewhere.
What do you see this as a potential impact for Bitcoin not operators,
if at minimum Umbrell and the likes have to start doing that?
So the age verification stuff I've seen in Linux
is more about creating an identifier in the user space
and not really at the server level.
So the implementations that probably are going to be the most common
are going to be like SystemD,
and it's a field for a user account not at the OS level.
So I don't really think you're going to see much implementation at all
on Linux server side, is my take on it.
And then he had one more.
He's a good guy.
He's a real good guy.
No, he's a great guy.
I was recently thrown off by several lightning channels being opened inbound to my self-hosted Albie Hub.
I thought something totally different was happening, and I closed them.
Mad props to the team at Albie for helping me understand what's going on.
Yep, that can happen, and it's a good thing.
I'm glad they sorted it.
That's really good to hear.
Thanks for that report, Gene, and thank you for the boosts.
JPEG81 is here with 2,000 sats.
No message, just a value, which I always appreciate.
Oh, Gene came in on another one.
I wonder why I didn't get caught.
But Gene Bean came in with 4,762 sats.
Hey, oh, Gino.
Coming in hot with the boost.
Another hot boost.
I've got a bid axe coming later this week, so I thought I'd drop a note here asking about the mining pool and any tips for getting it going until it's ready.
Adversaries, what?
Let's see.
We talked about it.
I wonder what I should say.
There is something in the works.
It's dependent on something upstream.
Maybe I can say that right now.
And maybe adversaries can update us soon.
Or I will.
but either way we'll have more gene continues i just read that tether was born on bitcoin 12 years
later it's coming back and it sounds like some important things regarding lightning are happening
particularly related to the first companies mentioned that is true and you know there has
been work to to move tether again on lightning not that new it's been going on for a while
and i think it's not a bad idea actually you know that's probably what a layer two is good for is
that kind of if you want to experiment with that stuff do it on a layer two it's probably perfect
for that. All right. Thank you again, Gene. I really do appreciate it. You're the best.
Lee, Lee, Lee, Lee, Lee, Lee is here with 5,000 sats. I am programmed in multiple techniques.
Moving from one digital asset to another digital asset is always a taxable event,
regardless of whether you're gaining or losing based on a trading pair directly.
The key is the cost basis for the asset at which you move. Let's say you bought some Bitcoin at
100,000 and sell a portion of that Bitcoin for 110,000. Then your gap gain would be based on
the difference between the original cost basis and the value at sale. That example would be a gain,
however, if you buy some Bitcoin at 100 and I think it got cut off. Right, right, right, right,
right, right. I'm thinking about that through, right? Because you could peg in at one price and
peg out at another price, I suppose. We need to see, now that would be great clarity. Speaking of
the Clarity Act, that's something that they really, well, at some point they're going to have to come
up with actual clarity around that kind of stuff because swapping and pegging in and out are pretty common practices especially in the DFA which they seem to care a lot about Thank you Lili Lili
Appreciate that clarification.
You're doing a good job.
Kiwi Bitcoin guides here with 4,657 Satoshs.
I love that format.
This would be a great model for a member's feed, I think.
The next step on my node
is to set up AlbiHub and NostraWall Connect,
and then get it connected to my Primal wallet.
Yeah, buddy.
I'm still not zapping on Nostra yet, I know, shame.
But I would like to hear more about OpenCode.
Do you run that in a terminal or with a GUI?
Which models do you connect to?
You said you SSH into your node to review configs and settings.
I'd love to hear more about how you're using OpenCode to manage your nodes.
Okay, well, Kiwi, OpenCode is a terminal app,
but it's a beautiful terminal app, very easy to use.
It's what you call a TUI, a terminal user interface,
but it's the very high end of them.
So it's practically a GUI.
And the brilliant thing about open code is there are several providers that are free.
They're not the highest end model and they do have usage limits, but they give you a
taste.
And then once you get hooked on the token sauce, you can subscribe and then put your
provider's API key in open code and get access to those models.
And you could think of it as, you know, a prompt environment that runs locally on your
machine.
So you can actually tell it, use SSH and connect to this system.
And I have SSH keys.
And log in and check on things.
And it will execute that command and go in and do it for you.
And then come back with a nice, pretty formatted report.
That's, you know, get started.
Get OpenCode installed.
Play around with the free Zen models that it provides.
And see what you can figure out.
And plan mode is your friend.
Good luck, Kiwi, and let me know how it goes.
Paranoid Coder's here with 2,000 SATs.
because I'm the win
no message just value though
thank you very much appreciate that
and Radman's here with 5000
sats that's not possible
nothing to do that oh Radman did
he says great show
and don't change a thing well thank you Radman
appreciate that thank you everybody who supported that was
definitely a one off I didn't expect even this much
support and of course we are rounding
the corner to 100 so I would
love a little 100 celebration if you got
it in you but let's say thanks to the people who
supported episode 98. We had 28 of you stream stats as you listened, and you had a nice, you guys are
actually the baller booster this week. You stacked 66,325 stats, you streamers. Thank you very much.
Sometimes you are a baller, and I appreciate that. When you combine it with everybody who sent a
message, then our grand total this week is 196,412 satoshis. Not too shabby. This is a value for
value podcast. I give it out for free. There's no advertiser, but my focus is to make the audience
the number one customer. And we do that with a boost. Fountain FM makes it real easy. You can
also become a member in Fountain FM and put your support on autopilot.
also a big shout out to the jupyter party members as part of your jupyter.party subscription you get
access to twib and keep the show going and keep it ad free as well and of course you can boost
with albi hub and choose from a plethora of applications or just boost from the podcast
index website. Or if you really want to be a baller, try out Boost CLI. Not necessarily easy,
but it's rewarding. Thank you, everybody, for supporting episode 98.
And with that out of the way, what do you say? Should we get into a few updates?
you might have noticed a lot of chatter about a new quantum research paper from google and the
findings of this paper are that quantum technology could break bitcoin sooner than expected here's
the main takeaway quote google just told the bitcoin and cryptocurrency industry
that it has less time than it thought to prepare for quantum computing.
In a white paper published on March 31st,
Google quantum AI researchers demonstrated
breaking the elliptic curve cryptography protecting Bitcoin,
Ether, and most major cryptocurrencies.
And it could require fewer than 500,000 physical qubits
on a supercomputing, superconducting quantum computer.
That's roughly a 20 times reduction from prior estimates,
which pegged the figure in the millions.
So they went from millions of qubits to 500,000 qubits.
Pretty, pretty big reduction.
So let's talk about the realities of this
because before I get into this,
I've always maintained,
I do think it's worth us researching quantum solutions.
Blockstream is doing so.
There are other individuals that are actively doing so.
Sailor set up his quantum superhero club.
So there's progress being made.
And I think it's really important we understand no quantum computer can execute this attack today.
Google's most advanced chip, Willow, has 105 qubits.
And this research paper is proposing 500,000 qubits.
And our best, most advanced chip right now, 105.
So what they're going to tell you is it's a big deal because Caltech recently showed off a 6,000 logic qubit array.
Oh, 6,000. That's a lot more than 105.
But what they don't tell you is those qubits were not entangled.
And without entanglement, you're not running Shor's algorithm.
So it's really kind of like all theoretical.
I mean, it's important to pay attention to.
But the actual state of art for entangled logical qubits is 96.
96.
That's it.
Do you understand?
they have a 6,000 logical qubit array that is not entangled in the works,
and they need 500,000 physical qubits. And they need them to be entangled logical qubits.
And right now they have 96 of those. And they have to hold their coherence for days in order
to crack Bitcoin. And right now, these 96 state-of-the-art qubits, they last for about
one to two seconds. That's how long they hold their coherence. So this new paper from Google
says the algorithm that they designed would have to run for days and would need 500,000
entangled qubits. So to get from where we're at to something that actually threatens Bitcoin,
it's not a small improvement like the paper kind of tries to position. It's more than 100x
entangled logical qubits than they have right now. And then they need coherence sustained
for roughly 100,000 times longer than what they can do right now.
I went and looked all these numbers up.
It's bonkers.
This is not a near-term engineering gap.
It is practically an unsolved problem.
We're nowhere close to breaking Bitcoin, no matter how breathless this paper sounds.
So why is the paper focused on Bitcoin and not other low-hanging fruit?
That's the question you should be asking.
And the answer is, yeah, mostly headlines.
They get engagement for sure.
And the paper is co-authored by someone employed by the Ethereum Foundation, Justin Drake.
And this paper happened to also drop on the same week that Ethereum launched and announced its quantum resistance portal.
So appearances are that Google coordinated with the Ethereum Foundation.
and isn't it interesting that this paper concludes that ETH is better longer off
because it has a governance that can make unilateral decisions
and Bitcoin is worse because there's no coordinated response, no central management
and it doesn't even really address the fact that ETH's consensus protocol
is vulnerable to a quantum attack and Bitcoin's is not.
the issue with Bitcoin would be old keys
and it would be, you know,
several million of them.
Where with ETH,
it's the entire consensus protocol.
But the paper concludes that ETH is better off
because it has central management.
And the narrative just conveniently lands
hardest on Bitcoin.
Isn't that interesting?
I don't know what kind of crap
Google's putting out.
I think it's really,
you know, I think honestly,
it's people with an agenda
and a company that just wants to make headlines
and look like a market leader.
well the tau
pain will continue until
the degens get wrecked
guys I could play you a dozen
clips of various rich investors and
former ETH heads that have been burned out
and given up on ETH that are now pumping tau
and if you didn't hear last week's update
segment you need to go listen to that
so I'm only going to play you one this week because
it also hits on a classic
anti-bitcoin trope that I
think we should address in this episode
so in this clip we got Jason
Calacanis again on This Week in Startups, and he's laying out some classic FUD that Bitcoin
often gets to pump Tau. And I think we should talk about it.
One thing I've learned in 40 years in tech from the 80s till today is that everything gets
replaced at some point. Or almost everything gets replaced at some point. A better version
of almost everything comes out. Whether it's BlackBerry giving way to iPhone, giving way to
android yeah whether it's you know the you know craigslist giving way to you know facebook
marketplace it's always going to be competition there was a time things will let people were
like friendster in myspace that's it there's never going to be another social network after
friendster in myspace right man how many versions of this conversation have you heard
god it's it's incredible that we are still saying these same things it's all dharmok
and Jalada Tanagra. And we just repeat it back and forth to each other. Anyways, I think you can
see what's happening here. So we're making a subtle equivalent. We haven't gotten there yet.
They haven't landed the plane yet, but we know it's coming. They're making an equivalent that
technologies often get disrupted. And you see it with Facebook disrupting the MySpaces and whatnot.
And Jason makes a comment that, you know, he's been in tech since the 80s, although it's funny
because he often claims that he wasn't a nerd and that anyways. But anyways, he's been watching
tech since the 80s and the 90s, and it's just a universal truth that you see this happen over and
over again, right? That's the case they're making. So it's not heresy to say something will come
along that's better. Now, what you have to understand is what time frame and how long does
the network effect last? Because there are moats in technology. One of the moats in technology is
brand, okay? AOL had a great brand for a while. You said online, it meant AOL. But then sometimes
the performance and the actual better mousetrap is what is defensible. That would be the internet
and broadband. Sometimes it's the combination of, you know, the brand, the network effect,
like Uber or DoorDash, right? They have...
So you can see what we're continuing to do, right, is we're making equivalents to products,
tech products. He got there almost for a moment when he talked about broadband.
The products, if you look at it in that sense, yeah, Internet Explorer eventually gets
replaced with Chrome and then Edge comes along. Like products only last for so long. Protocols,
platforms, that's a bit different. TCP IP has been around since the 80s. HTTP has been around
since the 90s and late 80s, right? These are protocols that everything else has been built
on top of. They are a layer, a foundational layer that things get built on. They don't get
They don't get replaced. They get adopted. They get wider and wider adopted and people build on top of them. He should be thinking of Bitcoin as TCP IP. But he's thinking of Bitcoin as MySpace and Facebook because in his world, crypto is just a tech stock. It's just another tech thing you invest in.
And for large portions of the crypto industry, quote unquote, that would be true.
And so you could understand how a VC like himself would get that impression over time.
Are we at that point, whatever number of years later, 14, 15 years later, that a better version could come along that would be more exciting?
Now when I say it better I think it better at an incentive system to provide value to consumers He talking about Tau versus Bitcoin here To businesses That what I think it better at And I think all that compute will at some point
let's say, Lon, Templar provides a better use case
for compute and transport on the internet than Bitcoin does.
What do you think Bitcoin miners will do?
They'll take 10% of their compute
and they'll move it over to Templar or to another subnet
and say, okay, yeah, let me see if I can make more money here.
That's the rational thing to do.
I think that's the moment that we're in right now
is that people are going to start looking at their infrastructure
and say, hey, maybe I should put infrastructure,
bandwidth, storage, compute towards this project.
I feel like that's-
Well, especially as people pump it,
that will happen to a degree, right?
Because you're going to have companies
that they're not Bitcoin companies.
They're making money mining Bitcoin
and they've become large corporations
and they're going to chase whatever makes them money.
but the bitcoin mining system is designed for these ebbs and flows and it's designed to respond
to that lack of mining or increased mining demand but again he's misunderstanding because he's
thinking of now like it's like it's an amazon web services product another disconnect that's
happening here a lot of people you know they're seeing you talk about tau is so interesting i like
all these subjects and they assume that you're doing the pump and dump meme coin rug pull trick
which is like, you know, like Hawk to a girl starts a coin.
They start selling the coin.
But then before anybody else gets a chance to sell, she dumps all of her coins and then makes the money and then walks away.
Like, no, no, not doing that.
Never doing that.
Of course not.
No, no.
We know.
Let's move right along from that.
Right.
Here's an interesting update.
Bitcoin Core 31 is making some mempool updates.
In fact, pretty significantly, the mempool has been re-implemented with a new design called Cluster Mempool.
to facilitate better decision-making when constructing block templates,
evicting transactions, reanalyzing or relaying transactions,
and validating replacement transactions, a.k.a. RBF.
So just to really quickly break this down,
the old ancestor and descendant limits are out.
Core now thinks in clusters.
A max of 64 transactions, a max of 101 kilobyte V-size by default.
Of course, you can change these things.
Mining, relay, and eviction decisions are now based on how transactions pay
as an entire package, not just one by one anymore.
There's also been some cleanup around RBF.
Replacements only pass if they make the mempool's fee picture
look better overall, which is better for you as a node operator.
There's some new tools for node nerds in there as well.
So I think, you know, it's funny.
The world hasn't come to an end,
and Core 30 seems to be well adopted,
and 31 is making some improvements to mempool policy that,
I mean, it's really a whole new design.
I think it looks pretty decent, and I'd like your take.
Lightning got a major adoption boost that officially went live on Monday.
Square began automatically enabling Bitcoin Lightning payments for millions of eligible U.S. small businesses that use the Square terminal already.
It's just on by default now.
Miles Sutter, which is Block's head of Bitcoin product, confirmed the deployment on X, saying,
Sellers who accept the cryptocurrency will receive fiat by default, so they don't even really have to care about it.
However, they can go in there and switch however they like.
He said, quote, we're making it easier for millions of businesses to accept Bitcoin.
This is how Bitcoin, this is how Bitcoin as everyday money begins, he said.
It's pretty darn cool.
I have not yet seen this.
If you see one of these in the live, in the wild, I suppose, let me know.
And when I do see one, I'll report back on the show.
This final clip of the week, and yes, we're here already, is from James Lavish.
And he talks about an age of information symmetry that we find ourselves in.
And really kind of encapsulates from kind of that meta level what I've been talking about this entire episode.
What we are experiencing right now, Danny, is an information or a knowledge arbitrage.
And so people just do not yet understand how Bitcoin is different and why it is the ultimate store of value and the ultimate debasement asset.
They just don't understand it yet.
There's a lot of confusion.
The mainstream media puts out confusing and hit pieces about it all the time.
They commingle it with all the other cryptocurrencies,
and they just call them all the same thing.
And so I have friends who say,
oh yeah, I own that, I own Bitcoin.
I own the Solana one.
And it's like, they just don't get it.
And it's okay, it's not their fault.
They're just not interested in doing the research themselves.
They're listening to mainstream media
and getting their news off of Facebook
or their research off of Facebook.
They're just not getting it.
And so there is an information arbitrage
that you and I are experiencing right now.
It feels bad and it makes you feel like,
am I an idiot?
Am I just stupid?
How early am I here?
And the answer is you're still pretty early
because I think that Bitcoin is going to trade
above a million dollars in early 2030s.
2032, 2033, I would be very surprised
if we're not touching million dollar Bitcoin.
That's me.
That's my thesis.
That's where I believe this thing is going.
But I also believe that part of that is that knowledge arbitrage will close.
And as that does, you're going to have the Harvards and the Yales and the University of Texas and the CalPERS and the Texas teachers and every pension and fire fund out there taking positions in Bitcoin as a core asset.
And when they do that, that's when that knowledge begins to really spread.
And people are like, oh, so Bitcoin is different.
Okay, so Bitcoin is different.
It's not just this moonshot thing.
It's digital gold.
Okay, then I should probably own some.
And funny enough is I think that that's going to be a much healthier rise for Bitcoin in
price and a much more stable rise.
It's not going to be this massive, volatile thing.
It's going to be like, people are like, oh, I get it.
Okay, I get it.
Oh, okay.
I understand now.
I understand.
I understand how it's different.
And then we'll feel vindicated and, you know, we'll look like we're 143 years old when we're just in our 50s or, in your case, 30s.
Let's check in on the state of the network.
I'm wrapping up at block height $943,254.
The price for one Bitcoin in U.S. dollars is $68,080.
But here's something pretty great.
13 years ago this week, Bitcoin reached $100 for the very first time.
So that's what it was doing 13 years ago.
Satoshis per dollar right now, $1,468.
All-time high was 176 days ago.
Retarget date, April 3rd, 2026.
And our estimated difficulty adjustment is an upward adjustment of 4.5%.
Nodes on the network still declining a little bit.
23,081.
Core 30.2.0 has the largest share by far.
And that is the state of the network.
And it is strong.
Well, if you made it this far, I got links in the show notes for you over at thisweekinbitcoin.show.
Sometimes some stuff I didn't get to is also in there.
And additional context around some of this stuff.
Also, let me know how I did with the boost.
I try to focus on what's really going on and not get distracted by the emotions.
Focus on the signal for your friends, your family, your future, yourself, whatever it might be.
Let me know how I did with a boost.
Also, I want your grade report on how old Saxipoo did as our first and maybe only ever crypto czar.
You can send that in as well.
All right.
That's it for me this week.
I'm going to wrap you up with the value for value track.
If you boost 95% of the sats, we'll go to the artist.
And this week, it's I Need a Little by the Retrograde.
I make the music in my head
That makes you want to tap your shoe
I paint the feelings in my shed
47, 80, cobalt blue
Ooh, my love, I'm picking up
The things we used to do
Ooh, my love, oh, my heart
I guess that's over too
One time
I need a little
I need to get up
Strong and over nothing
Keep me by your side
I need a little
I need to get up
Trying to race for someone
You can never hide
Do you tell me that you want it?
I'm always thinking of it
Never leaving it behind
I need a little
I need to get up
Never mind
If it's enough for choosing
You never want it
Then you're falling chain
And now I don't know what to do
When you tell me I'm the one to blame
Ooh, my love, I'm thinking of
The things we used to do
Ooh, my love, oh, my heart
I guess that's over too
Too tight
I need a little
I need to get out of something
Open up that keeps me by your side
I need a little
I need to get out
Try to raise your soul but you can never hide
Till you die without your warning
Always thinking of it
Never leaving it behind
I need a little
I need to get out
But never mind
Till you take it back to say
I will never fly away
No, no, I won't take all the blame
If you go
I need a little
I need to get up
Something over nothing
Keeps me by your side
I need a little
I need to get up
Try to race no soul
But you can never hide
Till you tell me that you want me
Always thinking of me
So I don't believe in me behind
I need a little
I need to get up
Never mind
I need a little, I need a little
Thank you.