Can Bitcoin survive quantum computing?

Transcript

What do we do with Satoshi's coins, right? Because like as you know, like to transition to a quantum proof addresses and cryptography, like you actually need to move those coins, right? What's up everybody? It's LG here and welcome to the Milk Road Show, the daily crypto show that is proud to announce Milk Road vegan nutfree soy milk bars. A new product that will be available at every Walmart in the US starting this coming June. Just kidding. It's April Fools. Today is April 1st, 2026. Is the worst joke you could ever come up with. And yes, I wrote it myself. Anyways, enough of the light-hearted stuff. Yesterday before April Fools, this is not a joke.

Uh we had a bit of a scare in the industry, right? There's a lot of this news about how Google had basically released this uh computer or algorithm or paper about how they could be 20 times more efficient at using Shor's algorithm, which is basically how you break cryptographic programs or cryptography in general. And the implication there is that they may be able to hack Bitcoin. And they didn't even release the entire research. They just said it might be possible as early as like 2028 or 2029. That rippled through the industry and lucky for us today we have two people that are actually primed to talk about it. We booked them weeks ago and there's a perfect episode to line up with them. We have Lorenzo Valente, director of research at ARC and Ray Hadti, research associate at ARC as well to talk about

this quantum threat AI and crypto as a whole. today on the show. Today's episode is brought to you by Midnight. Bringing rational privacy to blockchain and some turn crypto tax chaos into confidence. Lorenzo Ray, welcome to the show guys. >> Thanks for having us. For having us, man. >> Okay, so I'll start with Lorenzo. How how worried are you about this new thing from Google? And feel free to explain it in a way better way than I did because you're I'm going to be learning from you today. >> Yeah, sure. So I think without going like too deep into the weeds like of logical and you know physical cubits essentially like Google published I think two papers where you know they found a circuit and algo that essentially gives like 20x efficiency to

run shores algorithm and and break ECDSA which is you know public key cryptography that they use in Bitcoin uh in ETH soul and you know essentially all the the the L1s uh uh that that we have and so um I think we've been talking about quantum for a long time and we've had you know over the years we've had updates from you know Google or like on Willow and you know like the the big labs and kind of tech companies are really the only ones that are able to fund this type of research and have like quantum computers and so we've had updates on like the number of cubits and you know internally we've been we've been talking and really the question is like okay like when is this coming right like when should we transition into like

a quantum proof kind of cryptography to make sure that you know a lot of the networks that we use like Bitcoin, Ethereum and Salana are still safe right I think that's the biggest question I think with this paper there is you know solid proof that Google is you know is convinced I would say that instead of I think initially was like mid 2030s or 2040s so like 2035 40 uh they're uh you know more convinced that it's probably going to be, you know, probably 2029 or 2030. And so obviously I think I think this like in the crypto community and especially LJ I think like within Bitcoin because it's the more you know

hosified kind of network uh its ability to upgrade and like the the pace of upgrade has been questioned like you know for uh years now and it's obviously where you know most of the market cap in crypto and and and is right like Bitcoin is the largest asset and so obviously it's the most institutional one and so that uh you know a bit of a of a scare. I think internally look we I I think this is good you know to re like you know to regroup kind of the Bitcoin community the Bitcoin core devs I think you know it's going to happen and I think all the L1's need uh to put it on their road map if it happens like

in 2030 35 or like 2040 the reality is I think institutions like RAS and we talked to some of those we had you know we have relationship obviously because of the the funds and products they are going to ask these questions right and as you know like the the ETFs they hold like you know most of the bitcoin out there and I think you know whales like raas you know wealth management platforms bitcoin's core kind of value proposition is store of value and kind of protect you from long longtail risks right and this is clearly one right and so I think >> this is something that the community is going to have to take uh seriously but

but internally I mean we're we're very confident that this is only going to accelerate uh you know the pace of the the road map just putting a road map out there and you know like reassure people that uh that the the core devs are actually taking care of this. >> Everything you're listening to today is also covered in our daily crypto newsletter and on Sundays we even recap the best parts of the entire week's worth podcasts. So check it out at the link below. [clears throat] >> I guess so. Yeah, it's going to help make it a lot more immunable and something that was eventually going to be a threat in some way. Ry, is this something that affects only Bitcoin?

Because I'm assuming it affects everything else. But I want to hear from you. >> No. Yeah. Like like Lorenzo mentioned, this is going to affect like every single like blockchain network out there that uses like the ECD SA. So like that specific encryption mechanism. And uh like if we look at the paper today actually um I actually saw it through one of the Ethereum Foundation researchers Justin Drake and he was a collaborator I guess he you know was speaking with the Google researchers before they put this out but Ethereum has actually put out a qu like a postquantum road map of quantum proofing their network by 2029 and you know these chains that kind of do more frequent upgra upgrades because they're not as I guess store value like investments that you get with Bitcoin so they're a little less oified they've been shipping upgrades pretty frequently so I would

say for those like the timeline and like sense of urgency like yes it has increased but not by much because a lot of these we're looking to quantum proof by 2030 regardless like a lot of their systems. So, I think like the main concern is for Bitcoin, but I think like a big like takeaway from this is like is there anything actionable like today? Um, and I don't think there is because we're still, you know, 5 years out from, you know, the at least 5 years out from the timeline that Google put out today. And then, you know, considering there are other advancements, you know, we we'll have to wait and see.

>> Guys, if I've learned one thing about AI, especially in the last 6 months, is to not under underestimate the speed at which things can develop, especially on the software side. So maybe you guys can tell me are these timelines realistic because then it's kind of changing a little bit but also maybe illustrate for me as well cuz I know okay quantum is a threat to these L1 networks and kind of the standard you guys are describing what is the threat like what happens if this algorithm can crack it like then what then happens to Bitcoin that's something I'm very curious about Lorenzo let's go back to you >> yeah so I think uh the clear like the first thread here is you know Bitcoin since inception ion has you know transition like it's uh uh it's public

public keys and cryptography like the public addresses the type of public addresses we've had taproot and other you know other upgrades the really first batch which is really like the Satoshi coins and I think like in total we've actually posted like a a blog on this uh uh you know this month so I think you know I I I I think it's a it's a good kind of educational piece but I think in total the Bitcoin that are sitting in addresses that are not where the public key essentially is is kind of easier to to break are the you know Satoshi's coins and I think another four to five million so it's you know it's a million coins from Satoshi right but I think like the the total coins at stake here

is is is larger than that and so >> I think it's a third of the network like a third of the coins yeah >> exactly it's a third of the network and so I think LJ like here. You know, the first thread is, you know, with the public addresses where these uh bitcoin are sitting, you can actually um you know, you can actually go back to the the private key and essentially kind of unlock, you know, those addresses and you're able to sign essentially and break uh uh uh break those uh th those bitcoin. So I think like the you know the first consequence and like I think if you see on Twitter is what do we do with Satoshi's coins right because like as you know like this to like to

transition to a quantum proof quantum proof addresses and cryptography like you actually need to move those coins right and like as we know [clears throat] >> we don't really know if Satoshi's live we don't really know if he's a he or she like a a group of like we don't know anything right and so if you assume that Satoshi is dead, which I think, you know, is, you know, one possibility. What do we do with those coins? So, I think that's like the first question the community is kind of dealing with. Uh, honestly, >> would you fork the chain? Is that even a possibility? Like, would that even make sense and and abandon Satoshi's coins? I think yeah like if you look at some of the uh the the options uh that are mentioned uh out there I think uh

forking the chain uh is one and kind of leaving those coins. I think people have mentioned like burning the coins, right? So like you would kind of decrease the supply of Bitcoin. Yeah. I think you know the ultimately I think the community is going to take care of this. you know, we've talked internally. We can, you know, this is like a city, like I always say this, like this is like a price is is the biggest indication here where like if this is starting to get priced in, you're going to see it uh you know, through the price action of of these tokens, right? And you can see like with a with Ethereum like a year back where people were pushing the EF to pivot like the road map and be more aggressive to scale the

L1 and like we can you know you can write messages right on Twitter you can do stuff but ultimately you know people sell their tokens and that is just like the uh uh you know one of the clearest kind of signals right it's like you can if you're in a country in the US you can go vote like for the next president or you can also dump the bonds right and it's like the US bonds and it's that that is in some ways much more powerful. And so I think I think look like we're very positive honestly. We're constructive. I think this is the Bitcoin community is going is going to rally uh behind this. Uh but I think like the the clearest threat right now is definitely Satoshi's coins.

>> Got it. So who so who on the like who are these people on the Bitcoin side that have to do this, right? cuz you're saying there's an Ethereum foundation, right? And or we know about the Ethereum. I'm not saying I just found out what it was, but you know what I mean. The Ethereum foundation exists. It's been there since the start. It has come back aggressively the way people are pushing it. And we know who those people are, right? But on the Bitcoin side, like isn't that is that known like who the Bitcoin devs are who have to go and figure this out? And also, how do you agree to that? You know what I mean?

Because I guess there's no there's no central Bitcoin foundation. So, so I just want to know who those people are and and do we know who they are? >> Yeah, there's like a smaller cohort just because like you're shipping at a much like lighter frequency. So, there's not as much coordination. I guess the coordination is not as standardized as it is in other ecosystems. But, you know, Bitcoin like has gone through forks in the past like especially with SegWit and then also you have like kind of like the whole block size wars where that resulted in Bitcoin Cash. But um like additionally Bitcoin has you know Bitcoin improvement proposals where people can go and like suggest changes to the network. So there is a process but I think like what people are more concerned with is like this smaller

group um which I'm not as familiar with like the specific people like within the group but they have been a lot more dismissive of the threat of quantum than other I guess like the foundation or people you know kind of managing other networks which is like where the main concern has happened. But in terms of like the group and the ability and how this gets done like it's happened in the past they have coordinated like you can change the network. It's just like the work on that needs to be started and hopefully soon. >> Got it. Okay. Okay. So how do we track that? How do we follow if they're doing it? Is this is this the call to action for them? Is this way we can now that they've been awakened they've been summoned like the Avengers to come and come and handle this or I feel I feel

like quantum has always been on the on the road map for for Bitcoin. I feel like it's always been a threat. People have been talking about it for years. So now it's just more Google I guess is kind of telling them be like listen we're about to figure this out so you guys got to get your together. Is that kind of an accurate portrait of what's going on here? >> Yeah. I mean I mean I don't think there's even been like additional like any signaling that's happened. I think like what a lot of other networks have done that's reinforced I guess like a sense of security within like their token holders has been like actually going on X and like you know posting like the road maps and the work that they've done. It's like oh obviously Bitcoin doesn't have that foundation. So like where you know who's going to post

this like how does this happen? I think one theory that I've seen is like if kind of this like indifference towards the issue like persists then you could see like large stakeholders like asset managers and other entities like institutions start you know pooling money to try to like you know form grants or other incentives to have people actually start working on these changes and you know initiating these open source proposals through like you know the Bitcoin improvement proposal system because yeah you need to I think you do need to see like movement soon. >> [clears throat] >> I don't know how soon, but definitely with like the Google paper and what we've seen, um, definitely sooner than, you know, anticipated.

>> Got it. Okay. All right. Thanks for breaking that down for us, guys. I think it's really helpful. It's something I didn't really fully understand when I was reading the headlines today. So, I think it's really great for me and for the audience to kind of get a good sense of it. Uh, something we'll keep tracking. Um, while we're talking, I guess more like the dev side, uh, and talking about AI, Lorenzo, you you've written a lot lately, or I saw a tweet from you recently saying that the new monthly developer count in crypto fell to levels not seen since 2017. Can you explain that to me? Is that basically that there are now fewer people who want to be making crypto or it's a lot easier to be a dev and as a result, people can do more with less?

>> Yeah, it's a good question. I think there's several pieces to the to this. Um I think if you see like this cycle like undoubtedly I think in 20 2017 from to 2021 2022 like if you were you know coming out of Stanford or one of these you know kind of top elite like universities and you were trying to build something crypto was the place to be right like that that's where you you you go uh undoubtedly >> I think we can all agree this cycle it's been AI right like all of the like literally all of the capital like v most of the venture capital money I don't have the numbers but you can you know you can check this has gone to AI and even within AI has gone like to very few

AI companies and so I think that has attracted just an enormous amount of builders that probably would have gone like you know some of them to to crypto and so I think there's one point where there is this interest in the industry right now right like it has um it's more institutional know I think it's less on the edges like very early adopters and so it's attracting like a different different type of types of people like maybe repeat founders or like you know executives or sea level that have had that have you know worked at like big asset managers or hedge funds that now you know want to uh uh start like a company like in crypto but it's definitely like the cohort I would say of builders and de and developers has

has changed a lot I think and you know if you think if you look at like uh early stage and privates like you can definitely see that. So I think that's number one. Number two is look the reality is like smart contracts like all the crypto is open source right. I think it was never meant to have like 40 million, you know, Javas like JavaScript like developers like you have like in in kind of a inread file like we can reuse a lot of this stuff, right? And I think this is the point like a lot of the you know the the smart contracts uh that that we see uh like like obviously like you see net new stuff but like a lot of

the thing like is open source and you can reuse. I think you know over time like I I never expected like the net like the amount of developers to just skyrocket uh uh honestly even if like in the industry you see just much more capital and obviously the industry is growing you know tremendously I I don't think you know you'll see that just like on the on the the number of devs and I think like the third point is AI LJ as you said is is like if you look at five years ago not even five years ago like probably three or before if you wanted to build like an L1 you probably had to raise two to 300 million right like you you saw this like L2L like optimism arbitra Mona like all these L1 ones like

the main like the main you know the main thing here is just like the cost of like human capital right like these devs were extremely expensive you needed to build like pretty you know everything like pretty much everything from scratch and so I think like obviously with with AI the gain in productivity and especially in coding and like computer science in general >> is just off the charts, right? And so I think you know when I look at the chart it's a mix of like kind of the these three pieces but like overall I'm not surprised honestly like we can do much more with less people and I think you know a lot of the people that would have gone to crypto you know like five years

ago have now are now building in in AI honestly and so yeah that that that was mainly the take essentially >> the transparency of traditional blockchains forces a difficult choice utility [music] or privacy And you shouldn't have to choose. Midnight empowers innovators to break free from this limitation to a place [music] where privacy isn't just a feature, but foundational. Go to milkgrow.com/midnight to learn more. Crypto taxes are a nightmare. You've got trades across 15 exchanges, DeFi positions, you've forgot about, NFT flips, staking rewards, airdrops, and somehow you're supposed to report all of this to the IRS. Good luck. Cue the solution. [music] SUM. You may know it by its old name, crypto tax

calculator. The Sum platform connects to over 3,500 exchanges, wallets, and crypto projects, including full support for DeFi, NFT, staking, and airdrops. [music] It finds deductions you'd miss, reconciles massive transaction histories without losing track, and generates IRS ready reports that will help you pay the least tax possible. Oh, SUM is also the official tax partner of Coinbase and MetaMask, rated 4.6 out of five on Trust Pilot. Turn cryptotax chaos into confidence. Get started for free at milkroad.com/sum. That's sum.com. Milkroad listeners can also unlock 20% off their first year subscription with code milkroad 20. Well, here's an interesting question for you guys and Ray, I'd love to hear from you on this is that, you know, we've had we've we've been working a lot more with ARC lately,

right? In terms of podcast guests, we've had Frank on the AI podcast just two weeks ago. Now, we have you guys here today. Uh we're going to continue to collaborate because you guys have a fantastic um stable of researchers all all with great opinions, a lot of great stuff behind the scenes and it feels to me and obviously as a as a publication where we where we straddle crypto and AI and try and find really great stories and both investment stories, um a lot of AI stuff is coming back over to crypto, right? And uh ironically, so maybe those AI devs left just to kind of come back around and start start writing stuff for for crypto integrations. I want to know from you guys though as on as you guys are on the crypto side. Do you think that that's real? Is it something where

all the open claw users all the open claws in the world are going to be using stable coins because it's way more efficient or is this just like a crypto story we're making? >> I I can provide a little bit of color on that. So we we've been looking into the like aentic kind of payment protocols that have come out. You have X42 that was kind of pioneered by Cloudfare, Coinbase and Circle. than you know MPP which was just released by Tempo and Stripe. But in terms of like how real like we're seeing all these charts of all the volume that X42 is currently facilitating, MPPP is still pretty nent. It's in like its infancy right now. But um a lot of this like from you know people I've spoken to they'd say it's still pretty experimental and early stage like it's not kind of like real

tangible volume that's being processed right now. And then going forward in terms of like you know I've spoken with our web and fintech team and they do cover a lot of like these consumerf facing you know payments and then also like somewhat of like the agentic side just speaking with them in terms of how we think this is going to develop in terms of you know all of your you know open claw agents or all of your you know autonomous agents are going to be using stable coins on one of these a like you know aentic protocols like x42. I think that's maybe not the best way to look at it because I think what their opinion is and what I agree with is like is there you know a human in the loop for the transaction or like is this kind of like just autonomous agent based and like you

can kind of look at both like the granularity and then the frequency of the payments like if you're an agent that's making um you know specific like per API requests for data or like to do something like agent mail to send emails then stable coins and like a I guess a you know like a protocol call like uh X42, that makes a lot more sense versus like if you're, you know, if you have like an agent on your behalf that's shopping on Amazon, you probably don't want to just buying random things and like clothes for you. Like I'm pretty specific about what I like to wear. I don't want an agent to buy me something and it just shows up and then I'm like, I actually hate that color. But um so that's something where like you can like you already have like tokenized credentials through credit cards that

agents can use for those types of payments anyway. So I don't think we'll see like as much proliferation there. I think it's more on like the agent autonomous specific like very granular highfrequency payments where a lot of traction will happen. >> Lorenzo, what are your thoughts there? >> Look, I I think um if you look at I think people are excited about blockchain and and you know stable coin as being you know the uh the rails for like aentic kind of payments. I I agree and I think if you look at how money moves today and the technology that is available uh you know with stable coins or or you know even like tokenized you know other like RWAs and tokenization in

general there is just you know no reason why agents you know I I think it's pretty clear like it is like the best uh uh the best rails for agents to to interact. I think there's just like a lot missing, LJ. Honestly, um, you know, the agents like you've I'm sure you've uh uh you've uh uh used like a lot of the of the agents and kind of LMS out there. >> They're just not very good at you know projecting and like like managing kind of complex workflows where you know you actually need to think a bit right like you can give them instructions and I think right now you can you can see that but like are you confident you know if I say hey like I have a 100 USDC like go out there and like find the best

way to like buy like I don't know circle stock or like Tesla stock like at the best price and just like figure it out, right? Like I'm I'm not really confident of that yet. You know what I mean? Like I think you can give like them like really specific tasks. It's like, hey, go on unis swap, swap this for this on this pool, and I think for that, like it's great, but I think again like for very complex like long-term tasks, which I think, you know, is the big unlock, I think they're still kind of not there. So, I would say like we're, you know, we are like pretty constructive on u stable coins and blockchains being used, you know, for these flows. I think uh on the AI side and more on like the

pre-training and distributed inference um there are like a couple of projects I know like working on that. We haven't done like much work on this but I think I would say probably like the AI the AI community is more skeptical of that. Uh and you know I I hear a lot of people say hey like the the models are getting commoditized you can you know just use like open source models like the Chinese models or whatever. It's like the reality is like every time like OpenAI Enthropic and any of these like uh you know uh uh companies like release a new model and we think it's slightly better we're all switching to that model you know and so like we say like it is true like we say we don't care about

performance like latency and like how intelligent the model is but the reality is at least like from my perspective and and user experience is like internally like we're all like the the ARC team like is always discussing hey like have you tried tried this, have you done this? Like look at this. Like it has a better benchmark here or this one is just way better to code and this one is just way better to to do something. And so like I think like in reality the user experience is we're still very much attached like to you know performance and maybe like this is going to be like memory or like you know how pleasant you think like or like you know how likable the model is but the reality is I think they're still not commoditized and so I

think like from the distributed side like I don't I don't see any of these projects or models really taking off uh you know any anytime soon in a in a real manner. So, yeah. >> Okay. Got it. Well, here's a question then, maybe back to Ray because you've written a lot about stable coins as well lately. One thing that we do on the show is we try and make stable coins interesting, right? Other than just monitoring circle stock, uh, and we talk about Sky as well. uh Tether isn't, you know, we can't trade Tether, but uh or the actual company, but it's something where we try and really preach like what the future looks like as stable coins and keep it as something that's really interesting because that's something where there's so much development, there's so much interest on the institutional side, but from the retail

side, it's like cool, like a digital dollar, like I get it. And then that's kind of the end of the interest. So Ry, like how do how do you make stable coin sexy for people? Like what's most exciting to you that's going on there these days? Yeah. I mean, I'm gonna be honest from like like fundamental like how stable coins work like they are not like super interesting that I try to be like they'll be like what is a stable coin? Is it just like a dollar that's on the blockchain? Like you know like technically like yes and they're like why is that a good thing? Then you have to get into like how like crossber payments you know like the inefficiencies that work there and you have like disperate ledgers and you can do everything on a single unified ledger on blockchain rails and nobody wants to

hear that like whole thing. But I mean I think like where it is actually the most interesting like where it will be the most interesting for retail is like at I think there will be a point where a lot of like your day-to-day and like what happens in the back end of you know spending or just like you know even like maybe like your uh like paycheck or you know whatever a lot of that's going to be on like stable coin rails like on blockchain based um like systems and you're not even going to know and that's you know maybe like the entire point like I think that is the entire point like at the end of the day my mom like should not know if she's like spending money on a specific like app or like through a fintech that stable coins are you know happening on the back ends. But

so I think like where a lot of that development is h like happening is you know through the institutional side which is you know where it is like I I'd say like a little like less sexy like if you want to talk about like oh what's happening on retail that's really cool. I would say like it's mainly going to like the whole point is that stable coins are not going to be cool to retail because at the end of the day it's just going to be >> happening on the back end without people knowing and on the institutional side is where like the magic's happening. Like if we look at Western Union I've heard a lot about like their presence at D and like their CEO talking about how they're using stable coins to free up you know billions of dollars of float for crossborder remittances that they're

doing. Um they have their own stable coin that's going to be on Salana. Um they're I think they're partnering with like Crossman for like the infrastructure there, but SoFi is doing something similar with their stable coin. PayPal has one. And then you know there's like a lot of institutions that are recognizing this and I think you know we're going to see them in the next you know couple of years actually be used for you know tangible payments that you know affect people's everyday lives in the back end but people won't be like this isn't something that's going to be super like you know uh like top of mind or like you know right in your face if that makes sense.

>> I'm gonna [snorts] LJ I'm gonna if I can like I'm going to take the other side like of of >> Yeah. I think they're extremely like interesting. I I agree with Ray, but like I think look like if you step back I think there's two things out there. It's like whenever you know you don't have for crypto Twitter and like investors you actually don't have anything you can buy to get exposure to that it makes it less interesting right like we were talking about this originally I think like number one is circle is a public stock so it's not you know a crypto token number one. Number two, Tether is a is a private company.

So like by and large like if you are very very positive on stable coins in general, two of the market leaders like you can buy a token right now. So that's kind of number one and I think why you know you echoed kind of this and and and you know I think it's a it's a good point. Number two, I think if you step back is like this is very exciting like if you look at you know within crypto kind of um the stable coins are really the first use case where we've been able to pull retail and consumers into crypto and they're excited and they need this, you know, they need this product, right?

Like by and large like we have I think you know don't quote me on this but I think like there's 500 600 million crypto holders like in the world I think like A6NZ like you know published this report and we have roughly if you see like MetaMask Phantom we have like 30 to 50 active uh 30 to 50 million act active monthly addresses right that is tiny like OpenAI has 900 million I think you know, users. And so I think we're I'm very excited about this and I think this is, you know, the first use case where institutions like are really excited like companies and institutions are

super excited about this technology and consumers like whether they actually know they're using the technology or not, I think ultimately they probably never know that they're using stable coin uh you know underneath. But like this is really the first product in crypto besides Bitcoin. Bitcoin is probably the other one like as a store of value, but this is like really the second product in crypto where we are pulling like millions of users uh from kind of the the real world. And so I actually do think like this is like uh extremely uh exciting and even if you look at like you know traditional VCs like that is what they're the most excited about. So if you look like at

people that are not super deep into the weeds like us, like only in crypto, but they're investing in other things, like they see a stable coin as really a gamecher and they're really paying attention to this. >> I mean, I I would say I was never saying stable coins, like the whole concept itself wasn't exciting. It's like the marginal retail user like in like the US like if I were to go to my friend who invests in the stock market like obviously for people in countries with like unstable currencies like it's a whole different story but somewhere like a developed country like the US we already have basically what's perceived as like instant settlement in all the payments that you do. So it's like this like the stable coin like what it's like it's not a needle mover for those people specifically. But yes like you know

everything on the back and I just don't want to make sure that's misinterpreted obviously. That's fair, man. I'm sure your friends are more interested in uh in memecoins or NFTs or or anything else that was maybe a little >> and then they got destroyed. Yeah. Well, >> I don't know if the price of USDC can go down that drastically. I think it it did once a couple years ago for like a day and that was a great it's a great arbitrage opportunity, but uh otherwise otherwise it's a pretty safe investment. Um okay, last question for you guys. Lorenzo, kind of back to what you were saying and you gave us a nice bullcase there too and re obviously you're bullish too. Where do we capture value?

How do you capture value for someone like this outside of Circle uh and Sky which are just like it's obvious the issuers that's it. But long term there's so much more happening here. Um you know who's capturing the value? Is it the L1's who are going to be seeing a lot of this who are seeing a lot of the supply? How does that work? How do you see that? >> Yeah, I think it's uh it's a hundred million dollar question kind of thing, right? It's like we I think we had you know we've had this question even like before stable coins right it's like we really you know classify kind of three layers it's like the application layer the issuer and the underlying network right and and like how is the value going to acrue to like these kind of

three participants within the layer. If you look right now at you know the top 10 like revenue generating kind of applications company I think you know undoubtedly like Tether and Circle are capturing like most of that val value Elia like without without a doubt. Uh look we we've made investments kind of in the in the three categories and I think it really depend it really depends on the use case uh and kind of the the application. I think we're not that bearish kind of on on L1's as uh people are uh right now and I think they are going to acrue value from um uh you know

from stable coins uh in general maybe not through like just like priority fees and just like people paying essentially to to get the stable coin transaction included but I think it's going to generate just a lot of activity and they're going to be able to capture like through uh uh in in other ways. So like to answer your question, I think everybody is dealing with the same kind of conundrum, you know, like everybody's I is trying to uh to find an answer here and I think most likely uh the answer is like you know this is going to acrue to like kind of the three these three layers of the of the stack and I think you can make like great great investments like in in in kind of all

three that that's yeah >> I mean I I would add to that and I would say my answer kind of hinges on what happens with like the third party yield sharing in the Clarity Act in terms of like where you could get alternative kind of exposure to stable coins. This is actually something Lorenzo and I have spoken about, but if you if you listen to the BitGo like callback, they actually mentioned like they're doing the infrastructure for I think it's SoFi uh SoFi USD, but basically they talked about like if that these like stablecoin issuers can't go out and like partner to share yield back with people, then you know they're not incentivized. Well, they wouldn't be incentivized to, you know, share the yield anyway. So, they want to keep the yield. So, why would you use somebody else's stable coin? So, at that point, people would just look to

launch their own stable coins. So, by investing in somewhat, you know, someone who's actually on the infrastructure side, you could get exposure there. And then additionally, if you can't go and get stable coin exposure by just, you know, parking it in some partner that's paying, you know, yield back to the consumer, then you know, you might go and look at like some type of other like yield generating opportunity like an onchain market like in a where you can go and arc stable coins and earn yield or like a morpho for example to go and you know get that three or 4% that you would have got by just holding it in like a third party you know yield sharing platform.

>> Got it. Got it. Man, this is good insight guys. This is this is good. We're going to have to I'm going to have to get you guys back on when once that that stable coin supply is up 2x from here uh from 315 to 600 or it's getting close to a trillion to kind of uh circle back on these answers and and see what else is out there because I feel like it's you guys you guys you said it Lorenzo that's the big question and and it's clear that there's there's a lot of answers but there's still a lot of questions there anyways. >> Um gentlemen it's been a great show. Thank you so much. Great to see you guys. Thank you for coming on. Um and thank you for everything you guys do in the industry. Man ARC has is just such wonderful research. uh your portions in

that that ARC big ideas 2026 document were awesome uh and a lot of kind of what we talked about today. Didn't get a chance to talk about RWAs and Hyperlid, but maybe that's something we can save for next time. Um thank you guys. >> I appreciate it. Thanks for having [music] us on. >> Want insights on what's moving crypto markets and how we're trading each event. Subscribe to our channel and join the Milkro Daily and Pro Newsletters and start [music] investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.