Weekly Roundup 04/03/26 (Two big quantum papers, Drift protocol hack, Maritime Salvage law)

**SPEAKER_1** (0:01)
Matt Walsh and Nic Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and hosts may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only.

**SPEAKER_2** (0:22)
Brought down by Bad Mortgage Investments, Lehman, which has 25,000 employees, will be liquidated.

**SPEAKER_3** (0:27)
The federal government loans American International Group, AIG, $85 billion. This is a different kind of market and the Fed is asleep.

**SPEAKER_4** (0:35)
The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

**Nic Carter** (0:42)
The Bank of England has pumped $75 billion more into Britain's ailing economy.

**SPEAKER_3** (0:46)
The new round of quantitative easing.

**SPEAKER_1** (0:47)
You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin.

**Matt Walsh** (0:53)
Welcome to On The Brink, I'm Matt Walsh.

**Nic Carter** (0:55)
And I'm Nic Carter.

**Matt Walsh** (0:57)
How many times have you talked about Quantum this week?

**Nic Carter** (0:59)
Pretty much constantly, all week, nonstop.

**Matt Walsh** (1:03)
Busy one.

**Nic Carter** (1:04)
Do you think I'm the main character or not quite? Because you'd never want to be the main character.

**Matt Walsh** (1:09)
You don't want to ever be the main character. I don't think you're the main character. I think the main character is actually some of these guys that wrote the paper, like the Google guys.

**Nic Carter** (1:20)
Yeah, because you want to be close to main. You want to be co-main, but you never want to be the number one guy.

**Matt Walsh** (1:28)
Never want to be the number one guy. I'd say the main character right now is probably Michael Saylor.

**Nic Carter** (1:33)
So Insane Week, I feel somewhat vindicated. I mean, was it earlier this week, Monday or Tuesday, these two quantum papers came out on the same day, vastly lowered the resource requirements to break elliptic curve cryptography.

**Matt Walsh** (1:49)
Yeah, I guess let's just hop into it right now before we talk about the deals and talk about the Castle Island content. I guess the Castle Island content was just you talking about quantum on the Observation Podcast with Alex Pruden from Project 11 But why don't you just tee up the two papers that came out and what they said?

**Nic Carter** (2:10)
Yeah, so you know how we've been saying that like we're in the equivalent of 1940 in terms of like nuclear physics advancement equivalent for quantum, right? It's like theoretically proven but not practically built yet. That day, I think, was basically Monday of this week, the day when it really kicked off the race. So two papers came out on the same day. That wasn't a coincidence, that was coordinated. The first one is by Google Quantum AI plus Dan Benet, the most really the most influential cryptographer on the planet, plus Justin Drake of Ethereum. Google Quantum AI, by the way, the best quantum lab on the planet. So this is elite tier, best of the best guys in every class. This paper, what they're not doing is, they're not saying we've broken elliptic curve cryptography. They're not saying we have a machine. They're saying, if you had a machine, this is the algorithm you would run on the machine, and these are the resource requirements. So that's what they're saying. It's a resource estimate. They've posited that you, if you had a superconducting qubit quantum computer, you could break elliptic curve cryptography with 1,200 logical qubits and, you know, 70 to 90 million Tefola gates, which you could run in terms of clock time. You could run that into 10 to 20 minutes. So this is a massive reduction, both on the logical qubit side, but much more importantly on the T gate side, as in the run time. So their big contribution was realizing if you had a quantum computer this size, you could actually crack elliptic curves in around 10 minutes, which is how long it takes for a transaction to be included in the blockchain. So this opens up Bitcoin to this new style of attack, what they call on spend, what I call short range tag.
And so it changes the threat model for the worse. So that was a huge contribution. And they actually were so worried about this that they didn't publish the circuit directly. They publish a ZK proof showing that they knew what the circuit was, but they actually didn't want to reveal it to the world. So that was an insane paper. And I highly recommend you read it.