The Protocol: A Quantum Threat to Bitcoin?

Welcome to The Protocol, CoinDesk's play wrap-up of the astir important stories successful cryptocurrency tech development. I'm <a href="https://www.coindesk.com/author/marc-hochstein/" target="_blank">Marc Hochstein</a>, CoinDesk's lawman editor-in-chief for features, sentiment and standards.

In this issue:

What does Google's quantum computing spot mean for Bitcoin?

Dev's defection highlights Ethereum's increasing Solana problem

OrdinalsBot inscribes largest-ever record connected Bitcoin blockchain

Polygon touts velocity of Plonky3 proving system

Crypto's astir influential techies of 2024

Network News

NEED FOR SPEED: Polygon Labs claims its newest proving system, Plonky3, is the fastest connected the market. (Vitalik Buterin, Ethereum's creator, seemingly <a href="https://x.com/VitalikButerin/status/1851771622551883845?ref_src=twsrc%5Etfw" target="_blank">agrees</a>.) A proving strategy is astatine the halfway of <a href="https://www.coindesk.com/consensus-magazine/2024/01/11/what-are-zero-knowledge-proofs/#:~:text=Zero%2DKnowledge%20Proofs%20(ZKPs)%20are%20protocols%20that%20help%20prove,revealing%20details%20of%20the%20transaction." target="_blank">zero-knowledge rollups</a>, and a important constituent for transactions that trust connected cryptographic security. It is the main portion of exertion that creates proofs that summarize off-chain transactions, which are past sent backmost to a basal blockchain (in this case, Ethereum). “If a zkVM is simply a car, you could look astatine the proving strategy arsenic being the engine, truthful Plonky3 is benignant of what makes everything work,” Brendan Farmer, a co-founder astatine Polygon, tells CoinDesk's <a href="https://www.coindesk.com/author/margaux-nijkerk" target="_blank">Margaux Nijkerk</a>. The quicker a impervious is generated, the little computing clip that indispensable beryllium paid for. “If we amended speed, past we're improving costs,” Farmer said. “And truthful what this does is it makes ZK rollup truly competitory successful presumption of costs.” In January 2022, Polygon released <a href="https://www.coindesk.com/tech/2022/01/10/polygon-stakes-claim-to-fastest-zero-knowledge-layer-2-with-plonky2-launch" target="_blank">its erstwhile proving system</a>, called Plonky2, claiming past that it was the fastest 1 connected the market. Plonky3, the caller and improved mentation that has much flexibility, <a href="https://www.coindesk.com/tech/2024/07/16/polygons-new-zk-proving-system-plonky3-comes-as-open-source-toolkit" target="_blank">was released</a> successful July.

IN AWE OF THE SIZE OF THIS LAD: Bitcoin inscriptions task OrdinalsBot minted what it says is the largest record ever connected the oldest and astir invaluable blockchain: the past successful a postulation of 1,500 "Pizza Ninjas." It's portion of a improvement successful the Bitcoin improvement assemblage known arsenic "four meggers," which are files that instrumentality up an full artifact connected the network. They are called 4 meggers due to the fact that they are astir 4 megabytes (MB) large (the maximum size of each artifact of transactions connected Bitcoin). Ordinal collectors see them invaluable owed to their visibility connected the blockchain. "There's much than conscionable bragging rights down wanting to person the largest record connected Bitcoin," said Toby Lewis, co-founder of OrdinalsBot. "Four meggers volition beryllium connected the Bitcoin blockchain everlastingly and they already clasp important marketplace value." Bitcoin inscriptions, akin to non-fungible tokens (NFTs) connected Ethereum, were made imaginable by the Ordinals protocol. It allows information to beryllium "inscribed" onto idiosyncratic satoshis, oregon "sats" (the smallest portion of BTC astatine 1/100,000,000 of a afloat bitcoin), making each 1 unsocial and perchance valuable. <a href="https://www.coindesk.com/tech/2024/12/09/bitcoin-four-meggers-ordinals-bot-inscribes-largest-ever-file-on-the-og-blockchain?_gl=1*291ojw*_up*MQ..*_ga*MTkxMDQ3NzE3MS4xNzMzOTI4NzU0*_ga_VM3STRYVN8*MTczMzkyODc1My4xLjAuMTczMzkyODc1My4wLjAuMjk0ODcyNDk1" target="_blank">Read more</a>.

JUMPING SHIP: Ethereum's spot adjacent the apical of the crypto marketplace is unquestioned from the position of marketplace cap. Beneath the aboveground – astatine the product, developer and decision-making levels – the archetypal astute contracts level continues to instrumentality a beating from Solana, 1 of its closest competitors. Ethereum and its galore closely-linked networks are inactive the astir important, influential, and largest platforms for decentralized finance. That pb is opening to erode, however, with galore newcomers to crypto choosing Solana's velocity and debased fees. The dynamic was further punctuated Monday with quality that longtime Ethereum ecosystem developer Max Resnick was moving into Solana's orbit, abandoning his occupation astatine the developer workplace Consensys. "There's conscionable truthful overmuch much anticipation and imaginable vigor successful Solana," Resnick said successful an interrogation with CoinDesk. He framed the determination arsenic rooted successful his ain vocation path, but noted "frustration" with Ethereum's inability to accommodate contributed to the move. Ethereum lacks a streamlined process for making speedy changes. Some spot that arsenic a constituent of spot for a decentralized network, portion others, similar Resnick, spot it arsenic a hindrance for semipermanent success. <a href="https://www.coindesk.com/tech/2024/12/09/ethereum-dev-max-resnick-defects-to-solana-citing-frustration?_gl=1*291ojw*_up*MQ..*_ga*MTkxMDQ3NzE3MS4xNzMzOTI4NzU0*_ga_VM3STRYVN8*MTczMzkyODc1My4xLjAuMTczMzkyODc1My4wLjAuMjk0ODcyNDk1" target="_blank">Read more</a>

MOST INFLUENTIAL: This week, for the tenth time, CoinDesk has selected the radical who defined the twelvemonth successful crypto: Our <a href="https://www.coindesk.com/coindesk-news/2024/12/05/most-influential-2024" target="_blank">Most Influential list</a>. (Here was <a href="https://www.coindesk.com/markets/2015/12/23/coindesks-most-influential-people-in-bitcoin-and-blockchain-2015?_gl=1*11liyma*_up*MQ..*_ga*NjY3NTE3MjMyLjE3MzM5MzUwMDE.*_ga_VM3STRYVN8*MTczMzkzNTAwMS4xLjAuMTczMzkzNTAwMS4wLjAuMTA5NTg5MjgxOQ.." target="_blank">the archetypal variation successful 2015</a>.) Most Influential highlights idiosyncratic achievements successful the past calendar year. People are chosen for their projects, ideas, leadership, personality, oregon notoriety. There is simply a apical 10 of the astir Most Influential – radical we consciousness had outsize power oregon led the astir important projects. Then, we illustration different 40 radical who were lone a small little influential. (Certain salient radical successful crypto – Vitalik Buterin, accidental – would people beryllium Most Influential each year. But we take not to diagnostic the aforesaid names each time.) Among the tech luminaries we highlighted successful this year's bid were <a href="https://www.coindesk.com/tech/2024/12/10/lily-liu-solana-s-powerhouse-ambassador?_gl=1*1guajxo*_up*MQ..*_ga*MTY5OTQ5OTY0OC4xNzMzOTMwOTQ0*_ga_VM3STRYVN8*MTczMzkzMDk0NC4xLjAuMTczMzkzMDk0NC4wLjAuMjA2Mzg5NzYwMQ.." target="_blank">Solana's Lilly Liu</a>, <a href="https://www.coindesk.com/tech/2024/12/10/optimism-s-jing-wang-and-the-widely-adopted-op-stack" target="_blank">Optimism's Jin Yang</a>, <a href="https://www.coindesk.com/tech/2024/12/10/eigen-layers-sreeram-kannan-king-of-the-professor-coins?_gl=1*1guajxo*_up*MQ..*_ga*MTY5OTQ5OTY0OC4xNzMzOTMwOTQ0*_ga_VM3STRYVN8*MTczMzkzMDk0NC4xLjAuMTczMzkzMDk0NC4wLjAuMjA2Mzg5NzYwMQ.." target="_blank">EigenLayer's Sreeram Kannan</a>, <a href="https://www.coindesk.com/tech/2024/12/10/robin-linus-scaling-crypto-s-premier-network?_gl=1*12ja6zi*_up*MQ..*_ga*MTY5OTQ5OTY0OC4xNzMzOTMwOTQ0*_ga_VM3STRYVN8*MTczMzkzMDk0NC4xLjAuMTczMzkzMDk0NC4wLjAuMjA2Mzg5NzYwMQ.." target="_blank">BitVM's Robin Linus</a>, <a href="https://www.coindesk.com/tech/2024/12/10/sergio-demian-lerner-making-bitcoin-more-programmable?_gl=1*1jbg03b*_up*MQ..*_ga*MTYxMDA3MTE5OC4xNzMzOTMzMDQ2*_ga_VM3STRYVN8*MTczMzkzMzA0NS4xLjAuMTczMzkzMzA0NS4wLjAuMTAzNzIwNzEyNg.." target="_blank">Rootstock's Sergio Lerner</a>, <a href="https://www.coindesk.com/tech/2024/12/10/steve-yun-driving-web3-adoption-via-telegram" target="_blank">TON's Steve Yun</a>, <a href="https://www.coindesk.com/tech/2024/12/10/illia-polosukhin-a-crypto-ai-pioneer" target="_blank">NEAR's IIlia Polosukhin</a>, <a href="https://www.coindesk.com/tech/2024/12/10/greg-osuri-delivering-on-de-pin?_gl=1*1pyj53f*_up*MQ..*_ga*NzY0NTY0MjM0LjE3MzM5Mzg5NTU.*_ga_VM3STRYVN8*MTczMzkzODk1NC4xLjAuMTczMzkzODk1NC4wLjAuMTAzOTY5NDMzMQ.." target="_blank">Akash Network's Greg Osuri</a>; <a href="https://www.coindesk.com/tech/2024/12/10/eric-wall-udi-wertheimer-and-francisco-alarcon-upgrading-bitcoin-with-covenants" target="_blank">Bitcoin's Taproot Wizards founders</a> … and of course, <a href="https://www.coindesk.com/coindesk-news/2024/12/10/satoshi-nakamoto-the-mystery-that-probably-will-never-be-solved?_gl=1*nzhdg*_up*MQ..*_ga*MTYxMDA3MTE5OC4xNzMzOTMzMDQ2*_ga_VM3STRYVN8*MTczMzkzMzA0NS4xLjAuMTczMzkzMzA0NS4wLjAuMTAzNzIwNzEyNg.." target="_blank">Satoshi Nakamoto</a>, whose concealed individuality remains a parlor-game taxable aft each these years. (Writing that past portion was downright cathartic for me.) Find each the profiles <a href="https://www.coindesk.com/coindesk-news/2024/12/05/most-influential-2024" target="_blank">here</a>.

WHAT DOES GOOGLE'S QUANTUM COMPUTING CHIP MEAN FOR BITCOIN?

Google’s caller quantum computing spot could mean bitcoin (BTC) is finished.

That was the sentiment for immoderate connected Monday arsenic the net elephantine unveiled Willow, a quantum supercomputer that tin execute definite computational tasks successful conscionable 5 minutes that would instrumentality classical supercomputers an astronomical magnitude of time—specifically, 10 septillion years (or 1 followed by 24 zeroes; a trillion trillion).

10,000,000,000,000,000,000,000,000. Such an magnitude of clip is greater than the beingness of the full beingness astatine 13.8 cardinal years.

In superficial theory, specified a almighty machine could mean nary passwords are safe, encrypted messages are intercepted, atomic weapons codes are recovered out, and astir thing tin beryllium unlocked by brute-forcing combinations of numbers and letters.

But it isn’t each doom and gloom yet.

While quantum computing does so airs important threats to existent information systems, it's not a maestro cardinal to the universe, astatine slightest not close now. And determination is nary looming menace to Bitcoin, either.

Quantum computing leverages the principles of quantum mechanics, utilizing quantum bits oregon qubits alternatively of accepted bits. Unlike bits which correspond either a 0 oregon 1, qubits tin correspond some 0 and 1 simultaneously owed to quantum phenomena similar superposition and entanglement. This allows quantum computers to execute aggregate calculations astatine once, perchance solving problems that are presently intractable for classical computers. Willow uses 105 qubits and demonstrates an exponential mistake simplification arsenic the fig of qubits increases. This is simply a captious measurement towards gathering a practical, large-scale quantum computer, said Google CEO Sundar Pichai.

Bitcoin uses algorithms similar SHA-256 for mining and ECDSA for signatures, which mightiness beryllium susceptible to quantum decryption. And the abbreviated reply is that quantum computers, adjacent precocious ones similar Google's Willow, bash not person the standard oregon mistake correction capabilities needed to instantly decrypt wide utilized encryption methods similar RSA, ECC (used successful Bitcoin transactions), oregon AES (used successful securing data).

If quantum computers similar Willow scope a standard wherever they tin easy origin successful ample numbers, they could perchance interruption these encryption schemes, compromising wallet information and transaction integrity. That would necessitate quantum computers with millions oregon adjacent billions of “qubits” with highly debased mistake rates, acold beyond the existent technology.

“Google claims to person demonstrated 'below threshold' mistake correcting capabilities with their latest quantum chip,” said Chris Osborn, laminitis astatine Solana ecosystem task Dialect, successful a station connected X (formerly Twitter). "'Below threshold' is manufacture jargon for turning carnal qubits, which are noisy, s*itty quantum bits that are fundamentally useless, into logical qubits, which are multi-qubit abstractions that close for errors & fto you really execute existent computation.” helium added.

It takes astir 5,000 logical qubits "to tally Shor's algorithm to interruption encryption. In different words, millions of carnal qubits are needed to interruption encryption. Google's spot today: 105 carnal qubits,” Osborn noted.

Until then, cryptocurrencies (and different sectors) person clip to make quantum-resistant algorithms.

<a href="https://www.coindesk.com/tech/2024/12/10/what-does-googles-quantum-computing-chip-mean-for-bitcoin" target="_blank">CLICK HERE FOR THE FULL ARTICLE BY COINDESK'S SHAURYA MALWA</a>

Money Center

Hole successful the wallet

<a href="https://www.coindesk.com/business/2024/12/10/magic-edens-5-b-token-airdrop-raises-crypto-wallet-security-questions" target="_blank">Magic Eden's $5B Token Airdrop Raises Crypto Wallet Security Questions</a>

Deals and grants

<a href="https://www.coindesk.com/business/2024/12/10/binance-partners-with-circle-to-push-usdc-stablecoin-adoption-across-the-globe" target="_blank">Binance Partners With Circle to Push USDC Stablecoin Adoption Across the Globe</a>

<a href="https://www.coindesk.com/business/2024/12/11/stablecoin-trading-startup-perena-tries-its-luck-on-solana" target="_blank">Stablecoin Trading Startup Perena Tries Its Luck connected Solana</a>

Happy perp-day

<a href="https://www.coindesk.com/markets/2024/12/11/as-bit-mex-turns-10-the-market-is-still-thankful-for-the-perpetual-swap" target="_blank">As BitMEX Turns 10, the Market Is Still Thankful for the Perpetual Swap</a>

Regulatory and policy

<a href="https://www.coindesk.com/policy/2024/12/10/el-salvador-and-argentina-regulators-sign-agreement-to-help-develop-crypto-industry" target="_blank">El Salvador and Argentina Regulators Sign Agreement to Help Develop Crypto Industry</a>

Calendar

Dec. 4-5: <a href="https://indiablockchainweek.com/" target="_blank">India Blockchain Week</a>, Bangalore

Dec. 5-6: <a href="https://www.theblock.co/post/283406/the-block-launches-emergence-a-premier-conference-for-the-digital-assets-industry" target="_blank">Emergence</a>, Prague

Dec. 9-12: <a href="https://adfw.com/" target="_blank">Abu Dhabi Finance Week</a>

Dec. 11-12: <a href="https://newyork.theaisummit.com/" target="_blank">AI Summit NYC</a>

Dec. 11-14: <a href="https://www.taipeiblockchainweek.com/" target="_blank">Taipei Blockchain Week</a>

Jan 9-12, 2025: <a href="https://www.ces.tech/" target="_blank">CES</a>, Las Vegas

Jan. 15-19: <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2024" target="_blank">World Economic Forum</a>, Davos, Switzerland

January 21-25: <a href="https://329b0589.isolation.zscaler.com/profile/2332cf23-bc6a-418b-a941-f595d0e3ea25/zia-session/?controls_id=22337358-9ef1-4c14-8042-bae40f505928&region=pdx&tenant=cac35314c425&user=065ae33aa0b7fd8bb4e9ae9286b2fcf7c62d677db428d6cd9b6e4d01e6ffa098&original_url=https%3A%2F%2Fwagmi.miami%2F&key=sh-1&hmac=5349b2cbc41b5242c21267747a0dc197c5cb3cc3c860fe73f8de2f049e1adea8" target="_blank">WAGMI conference</a>, Miami.

Jan. 24-25: <a href="https://adoptingbitcoin.org/capetown-2024/" target="_blank">Adopting Bitcoin</a>, Cape Town, South Africa.

Jan. 30-31: <a href="https://planb.sv/" target="_blank">PLAN B Forum</a>, San Salvador, El Salvador.

Feb. 1-6: <a href="https://satoshiroundtable.org/" target="_blank">Satoshi Roundtable</a>, Dubai

Feb. 19-20, 2025: <a href="https://consensus-hongkong2025.coindesk.com/" target="_blank">ConsensusHK</a>, Hong Kong.

Feb. 23-24: <a href="https://www.nftparis.xyz/" target="_blank">NFT Paris</a>

Feb 23-March 2: <a href="https://www.ethdenver.com/" target="_blank">ETHDenver</a>

May 14-16: <a href="https://consensus2025.coindesk.com/" target="_blank">Consensus</a>, Toronto.

March 18-19: <a href="https://blockworks.co/event/digital-asset-summit-2024-london/home" target="_blank">Digital Asset Summit</a>, London

May 27-29: <a href="https://x.com/LasVegasLocally/status/1817280637457551831" target="_blank">Bitcoin 2025</a>, Las Vegas.