Um, are you sure that quantum isn't a major risk?

Well, I think, um, the-- You know, people don't have to agree on the date to work on the solution.

So...

Now, I am skeptical about those dates, so I'll come back to that.

But, uh, so with Blockstream Research, Jonas Nick and our research team have been working on post-quantum signatures for Bitcoin, and they have the proposal SHRINKS and SHRIMPS, which, you know, looks to be probably the front-runner in terms of current candidates for Bitcoin post-quantum signatures.

And those are using Lamport signatures, which are 1979, a very old, robust technology.

Bitcoin likes conservative, secure things.

But fees are down.

Is it contradictory to, like, Bitcoin's ethos that it started, you know, to remove the middleman? Like, do you see banks even, like, being, like, transformed to, like, Bitcoin banks like Alex Mashinsky creating River?

Yeah, I mean, you are seeing some neobanks that are Bitcoin first.

Uh, another one is Xapo, for example, right? So some neobanks, um, Capital Union Bank, who, who are very Bitcoin native, right? You know, the Cypherpunks were interested in better electronic cash, smart contracts, and things like that, and Bitcoin has that.

And so the question mark for me, you know, a decade ago as Bitcoin started to see over time different types of owners, corporate owners and so on, that you could see in the future maybe there would be sovereign owners and governments and government agencies.

And the question mark was, you know, how will they interact with it? Will they try to impose their viewpoint or influence it from their viewpoint? But I think it's gone quite positively, which is that it seems that the...

You know, now you have politicians, uh, leaders of countries like, you know, Salvador, who seem to understand Bitcoin for what it is.

And I think what you're seeing is that the incentive structure for Bitcoin scales.

So for years and years, Bitcoiners have comforted themselves saying, "We are still early." When do you think that that time is gonna come, where people actually not, like, miss the Bitcoin buzz, but that we're not early, we're, like, living in the present?

When we hear, like, quantum's a threat to Bitcoin, what, what comes to mind first? Is this, like, an engineering problem, a governance problem? Uh, you know, and maybe I'll start with you, Adam, and then kinda go around the room.

Well, I mean, I think it's, uh, the post-quantum signatures are relatively well understood.There's a, a NIST standard, a couple of algorithms published in October 2024, which is pretty recent in terms of the evolution of this.

For Blockstream, we actually recruited one of the researchers that got the hash-based signature back on track, a PhD, Mikhail Kudinov, um, 'cause we figured, well, let's, you know, if we're gonna do some quantum research in qua-- as quantum signatures, let's have somebody who's, you know, at the bleeding edge of that add to the team.

So we did that, and then we published some survey paper on hash-based signatures, which we think are the most conservative and therefore what Bitcoin would wanna use.

And more recently put a proposal for, um, optimized the-- further optimized version of that tuned for the Bitcoin use case, which is the shrinks and shrimps.

Um, uh, as a concrete proposal, we implemented it in Liquid, which is a Bitcoin layer two that, you know, inherits most of its code base from Bitcoin and has some track record of some years of, I think three or four different features that came to Bitcoin as opcodes years later of having them first.

So it's kind of light value testnet for Bitcoin opcodes, if you like.

Bring it home.

Do you view these as initial proposals for solutions or final proposals for the solution? Do you think that with more time and more information, perhaps the solutions will evolve as well?

Well, I do think that there's a, uh, an interesting situation, which is the post-quantum signature research is relatively early stage.

And so, you know, there's been a NIST, National Institute of Standards and Technology, uh, publishes cryptography standards for classical cryptography.

And after a multi-year, uh, design process with submissions from international cryptographers, they issued a hash-based signature scheme called SLH DSA as a NIST standard October twenty twenty-four, so it's relatively recent.

Um, but they're also, you know, active research in more compact and flexible signatures.

Unfortunately, it's premature in my view to, you know, have them be standardized or for Bitcoin consider using them.

So I think what could happen actually is that, um, you know, the advantage of those is they may be more convenient, smaller, faster, more flexible, but they're not ready today.

And then there's a lot of people who are fully sounding the alarm.

Are you either Satoshi, or did you help create Satoshi?

No.

So I mean, I think the, the thing that is a little confusing because this happened like a decade before Bitcoin, is that people were, you know, in the, in the open on a mailing list brainstorming about how to create a Bitcoin-like system.

So myself and Hal Finney and Nick Szabo and Wei Dai and a few people were involved in these discussions, and you can go and read them.

Aaron Van Wirdum read through all those, wrote a book.

John Carrier refers to a f- a number of those.

And so because we're trying to design a Bitcoin-like system, it involves proof of work, it involves a peer-to-peer network.

Do you think someone lost the key? Do you think it's somebody who's no longer alive? Do you some- think it's somebody who burned the key and did this on purpose so that people would guess and that this was part of the entire sort of broader strategy around what Bitcoin, uh, would ultimately become and the myth around its creation?

So I'm just gonna ask you point-blank, are you Satoshi Nakamoto?

No, I'm not.

I think, of course, it's a fascinating topic as to who this person would be, and all of the circumstantial evidence has been analyzed extensively by, you know, many researchers.

So effectively, I think what we're left with is sort of speculative analysis and of course, looking at the historic writings, which John does an interesting job of in the article.

I mean, I think there is some sort of inherent selection bias, if you like, in the sense that in looking at who might be Satoshi, they're going to look for people with overlapping interests.

And I'm probably as reasonable a candidate as any of the other top twenty that, let's say, people have looked at.

But we don't have a reason to suppose that Satoshi would be participating at conferences, participating in documentary films, taking interviews, and that kind of thing.

Isn't there a public interest there in knowing what the motivations were for creating this?

Blockstream is a, a treasury company, correct?

Uh, BSTR, Bitcoin Standard Treasury, is a treasury company, um, coming up for SPAC approval, we estimate about April.

And, uh, depending on where the Bitcoin price is, if it holds at this level, that's actually to our advantage because we go out with a lower reference price and are able to buy more Bitcoin, making our way up the t- the ranks, probably number three in the global ranks of Bitcoin treasury companies by holdings.

Do you think that it does provide more of a floor for Bitcoin as, as we see prices decline?

Um, I mean, I think Bitcoin tends to be a little weak to the downside because many of the retail investors, uh, end up being all in, and so they don't have a lot of capital to buy Bitcoin.

Whereas if you look at public company stocks or big mutual funds, looking at analyst reports, if they see the price of something come down, you know, they might sell some Microsoft and buy some Tesla if they think Tesla's cheaper at a given level.

With Bitcoin, most of the investors are all in, so they don't have that ability to sell something else to reallocate.

W- with more institutional investors coming in, I think you see more of that reallocation between other asset classes, but it also can bring with it some correlation short term.

and

you know even if it's legally defined protected you know right under a under a charter of a country or something so there's been this multi-decade fight on that and which is the area I was most worried about where things are going with this anti-spam.

And the precedent there that you mentioned is if a company or an individual has access to something, so they have built a mechanism into their product or to their service that enables them to access it, and they've demonstrated that, like they've done it for other reasons, for debugging, for their convenience, because a friend of theirs asked them, then if law enforcement turns up and they say, Give us it for this other reason.

And, you know, it may be something you don't agree with.

It may be in another country.

It's you can get compelled.

Like if you refuse, you get a jail, basically something like that.

Why do you think it's sparked so much emotion from the community?

I know some people aren't as familiar with those, but can you talk a little bit about it? Because based on your deck, you're going to have some convertible notes, a convertible preferred, and then there's also pipe investors, right? So talk to me a little bit about your company specifically.

yeah so the all of those fundings you mentioned are closed um so there was the initial 36 day period where we did the uh institutional selling basically and some like family offers high net worth and actually bitcoiners as well um and then there were two shoes and a shoe is a sort of 15 and 30 day option to upsize it one of the some of those things for investors that you know decide after a bit of thought they want to do more so that 30 days also 15 and 30 day periods also passed so it's all kind of wrapped up at this point and so it's past tense and then we did a couple of novel things that you know hadn't really been done before at this stage in a in a company in a company that's going you know using the spec process so we had an equity pipe which is the normal most straightforward way to invest in these things because there's a SPAC itself which is just a kind of a shell company with a bucket of money in it 200 million in this case and then we raised an equity pipe and following and then we also raised the And we did a second pipe, which was novel in being Bitcoin denominated.

So people with Bitcoin could invest into the pipe with Bitcoin.

And this was done using a tax advantage structure where you don't get the case right and with this way you basically have you know people have to take their own tax advice but i'm not a u.s resident or taxpayer anything so you know you you have to um so you can defer the you know your cost basis on the bitcoin you don't realize the gain if at a later date you sell bstr shares you know presumably you would wait try to wait you would you know you'd have to pay that that capital gains that you know on the applied by the BSTR price.

And so that's actually quite beneficial in tax terms, because if you run the numbers, I know what the capital gains tax rate is in the US long term, let's say it's 20% or something.

You know, if you have to pay a 20% tax on some low basis cost Bitcoin, and firstly got the 20%, come up with the money, you know, it's kind of recursive, right? So the percentage of the Bitcoin you have to sell to pay a 20% tax rate And then you're doing it once and then presumably going to do it again when you sell the BSTR shares and then you've got the same problem again.

And so you've got this kind of double compounding compounded tax problem and it's super expensive.

So what do you say to those people that look at the treasury companies and they hate what's happening and they feel like it's somehow anti-Bitcoin?

So you're lending dollars against Bitcoin to people who want to borrow against their Bitcoin.

Right.

And that's something they're going to be familiar with because they will have allocations to other forms of asset backed loans.

And now in this case, after they've got their foot in the door, placed some dollars into that, seen the interest accruing for some period of time, we can offer the option of rolling the interest only into Bitcoin.

So they're kind of dollar cost averaging.

And pension funds are very long-term institutions who place money into vehicles for five years, 15 years, that kind of timeframe.

So if Bitcoin continues to do what it does, as the adoption curve follows, it's entirely possible that the interest could add additional return above the principal, like a multiple of the principal potential.

What are the assumptions that go into us driving a price that high?