Nayib Bukele’s tune has seemingly changed his stance on the International Monetary Fund (IMF). Bukele once laughed at its bankers causing a dip in bitcoin (BTC) prices, refused to consider repeated requests to revoke the crypto as legal tender, and angered IMF workers with various tweets.

He has also censored the IMF’s views within El Salvador and refused to meet its demands for debt refinancing.

However, yesterday, the president’s staff kowtowed to IMF demands, agreeing to confine his administration’s BTC-related economic activities and transactions, eliminate the acceptance of BTC tax payments, and unwind the government’s involvement with its once-state-backed BTC wallet and ATM network, Chivo.

Bukele made these compromises to get access to a paltry $1.4 billion loan extension to fund his administration’s reform agenda.

“IMF staff thank the Salvadorean authorities for the excellent collaboration and candid dialogue,” press officers wrote, juxtaposing Bukele’s defiant statements with his compliant acquiescence.

Salvadoran authorities also agreed to formalize a policy of voluntary acceptance of BTC as a method of payment for all Salvadoran business owners.

Bitcoin to no longer be accepted as legal tender for tax payments

In the end, it all comes down to dollars and cents at the negotiation table. Going forward, according to an agreement by Raphael Espinoza on behalf of Salvadoran authorities, US dollars would be the only acceptable denomination for tax payments in El Salvador.

Assuming El Salvador keeps the promises it has made to the IMF and implements these reforms by drastically dialing back BTC use in the country, the IMF Board will approve its $1.4 billion loan extension request in February next year.

Read more: Bitcoin makes IMF hesitant to issue new loans to El Salvador

The country’s GDP is approximately $34 billion and grows roughly 3% per year.

Because the country claims to own 6,192 BTC, Tim Draper claimed on October 24 that a rally to $100,000 per coin would allow the country to repay its IMF loans “and never have to talk to them again.”

That obviously didn’t happen. Like much of Bukele’s social media-posturing against the IMF, his debts came due and quickly checked him back to reality.

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Craig Wright has been given a two-year suspended prison sentence by a UK judge after he was found guilty of criminal contempt of court following accusations from the Crypto Open Patent Alliance (COPA).

Wright was found guilty of criminal contempt of court on five separate grounds and will be arrested and imprisoned if he commits another offense in the UK. He has also been ordered to pay £144,000 ($180,000) to cover COPA’s legal costs.

Wright attended today’s hearing virtually and claimed that he would appeal the verdict. 

Today’s decision followed yesterday’s hearing where lawyers representing COPA argued that he had breached his injunctions on multiple occasions after filing a lawsuit against Jack Dorsey’s Square Up and BTC Core. 

Read more: Craig Wright skips UK court hearing, COPA wants him in prison

Wright also failed to attend yesterday’s hearing in person, despite orders from Judge Mr. Justice Mellor, potentially committing another act of contempt of court.

Mellor said today that Wright relied on “promissory estoppel,” to avoid attendance and that he found “each ground for contempt proved beyond all reasonable doubt.”

The judge concluded that, “[Wright] has expressed no remorse today,” and that “promissory estoppel is legal nonsense.” In his decision, he also struck out Wright’s new claim.

Describing the scale of Wright’s legal misdeeds, COPA’s legal representative, Jonathan Hough, claimed “Wright has found himself in contempt of court in three continents over two decades.” The hearing was again shared live by BitMEX Research, patent attorney David Pearce, and Bitnorbert. 

Read more: Craig Wright COPA appeal rejected by UK court as meritless

Earlier this year, Wright was referred to the UK’s Crown Prosecution Service (CPS) over his potential perjury. At the time, the UK courts struggled to identify where he’d gone after leaving the UK.  

When the judge asked what country Wright is currently in, he replied “Asia” — a continent. Mellor then noted that Wright “can avoid the consequences by continuing to base himself in Thailand.” He added, “Wright appears to be well aware of countries without extradition arrangements.”

Hours before yesterday’s hearing, Wright claimed that he couldn’t attend as he couldn’t afford the means to travel. COPA offered to cover these costs but Wright said that it would cost £240,000, including the losses to his business.

Throughout the case, Wright has chosen to represent himself. He has previously been caught citing non-existent legal cases through his use of ChatGPT. 

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One of the world’s largest asset managers momentarily delighted Bitcoiners today when it released a three-minute advertisement for bitcoin (BTC). Just 90 seconds into the video, however, delight turned to dismay when viewers spotted BlackRock’s finely printed supply disclaimer overlaid atop an otherwise glowing overview of the currency’s monetary credentials.

In the video, which was amplified by MicroStrategy Chairman Michael Saylor, BlackRock disclaimed, “There is no guarantee that bitcoin’s 21 million supply cap will not be changed.”

The disappointment at the sighting was palpable. 

Bitcoiners labeled it “misinformation,” “FUD,” “underhanded,” “laughable,” and a homophonic euphemism for retarded. The topic immediately trended on X.

Unbeknownst to most Bitcoiners, that disclaimer is also present in BlackRock’s prospectus for its spot BTC ETF. IBIT, the world’s largest spot BTC ETF, discloses various risk factors to investors in its Securities and Exchange Commission (SEC) filings. One of those risks is that the supply of BTC might increase beyond 21 million.

“Although many observers believe this is unlikely at present, there is no guarantee that the current 21 million supply cap for outstanding bitcoin, which is estimated to be reached by approximately the year 2140, will not be changed. If a hard fork changing the 21 million supply cap is widely adopted, the limit on the supply of bitcoin could be lifted, which could have an adverse impact on the value of bitcoin.”

-BlackRock

It’s a remote possibility– so remote as to be “laughable” or “FUD,” according to some — yet BlackRock’s lawyers consider it pertinent to an average investor’s decision-making.

How would bitcoin’s supply exceed 21 million?

The first possibility of a supply increase is a bug. There were a few hours in Bitcoin’s nascent history, for example, when the BTC supply briefly exploded over 184 billion. Satoshi Nakamoto corrected that August 2010 bug, known as the “value overflow incident,” within hours.

Patched up and operating smoothly ever since, it’s hard to take the threat of any new bugs seriously — especially with a $2 trillion prize attached to any successful hack.

Nevertheless, although BTC’s supply has continuously remained below 21 million for more than a decade with no foreseeable inflation bugs, it’s technically possible that someone might exploit an esoteric bug in the future and briefly alter its supply.

For this reason, BlackRock must legally disclaim the 21 million supply cap of BTC. In its IBIT prospectus, BlackRock notes on page 57, “the 21 million supply cap could be changed in a hard fork.”

Read more: Did Michael Saylor pay Bitcoin developers to stop working?

If not an inflation bug, then a voluntary fork

The second possibility for breaching BTC’s 21 million supply cap is a voluntary hard fork.

BTC’s maximum supply is rigid, with zero tail emissions. One researcher estimates it at 20,999,817.31308491 or less. However, there have been various proposals to increase the quantity of circulating BTC via a voluntary fork, such as Peter Todd’s tail emissions proposal.

Tail emissions are a type of proposal that would financially incentivize miners when Bitcoin’s mining reward drops to zero in the year 2140. Although most variants of tail emissions propose recirculating provably burned or unspendable BTC into mining rewards — thereby honoring the 21 million cap — some variants of tail emissions propose lifting the supply cap slightly in order to incentivize miners to secure the network beyond 2140 if transaction fees do not sufficiently subsidize miners’ electricity, machinery, and effort.

However, there are vanishingly few Bitcoiners who currently support any version of tail emissions that exceed BTC’s current supply cap.

There will never be more than 21 million bitcoin.*

Operators of nodes around the world enforce the current version of Bitcoin’s mining rules. Anyone who tries to validate a block or transaction that doesn’t comply with BTC’s 21 million supply cap will be rejected by the vast majority of these nodes.

With over 15 years of consistent enforcement of this supply cap, there are very few people who think BTC’s supply limit will ever change.

There are at least 67,000 nodes around the world that enforce BTC’s 21 million supply cap, and about 19,000 are online and reachable at any given moment. All of them stand guard to defend against any breach of this ceiling.

*From the perspective of a BlackRock lawyer, however, they would still prefer to note the risk — even if it is in fine print.

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Many crypto investors are accustomed to collateralized lending such as margin in a brokerage account, perpetual futures, DeFi loans, yield farms, and other secured loans. In trust-minimized ecosystems like crypto, borrowers must give lenders some type of assurance that they will repay and almost always, that assurance takes the form of collateral.

A collateralized loan usually has a liquidation price, a threshold that allows the lender to sell the collateral on an emergency basis to repay the borrower’s obligation before asset prices collapse further.

Using this mindset, investors see MicroStrategy’s $7.2 billion in debt and 439,000 bitcoin (BTC) in available collateral and automatically assume that the company must have some sort of liquidation threshold on its debts.

Their suspicion has historical precedent. Indeed, MicroStrategy almost hit some of its liquidation triggers just two years ago — shortly after the collapse of FTX in November 2022.

At that time, MicroStrategy had outstanding debts to lenders secured by some of its BTC holdings. Fortunately, the price of BTC stopped its crash above $15,000 and never cascaded into the single digits that would have triggered liquidations.

Calculating the BTC price that would liquidate MicroStrategy

Fast forward to today, MicroStrategy currently has $46 billion in BTC yet has $7.2 billion in debt. It bought its 439,000 BTC at an average price of $61,725.

The question in the minds of many investors is simple: If BTC falls below $61,725, will progressively lower prices trigger a series of liquidations of MicroStrategy’s bitcoin?

At today’s market prices above $100,000 per BTC, MicroStrategy obviously has no liquidations to worry about. If the company were to sell just 15% of its BTC at today’s prices, it could easily pay off all of its outstanding debt.

However, with Bitcoin enthusiast Michael Saylor pulling the strings as executive chairman and a consistent decline at its legacy software business, it has no plans to sell any coins.

If not $16,500, then what?

Stonewalled with a rigid buy-and-hold corporate approach to BTC, MicroStrategy seemingly has the risk that its assets could be liquidated. For example, CryptoQuant CEO Ki Young Ju used elementary math to allegedly estimate MicroStrategy’s liquidation price as $16,500 per BTC.

However, that is as simplistic as it is incorrect. In truth, MicroStrategy doesn’t have any liquidation price.

Unlike at other times in MicroStrategy’s history, all of the company’s debt is now unsecured. Its creditors don’t hold any BTC as collateral and they have no power to force Saylor to sell any of it.

Lenders have simply accepted MicroStrategy’s promise to repay and most have accepted two types of principal repayment upon maturity: cash or MSTR shares.

Moreover, they have agreed to multiple years of debt term, delaying principal repayment for many years provided that MicroStrategy services the loans with small, quarterly interest payments.

So far, Saylor has been able to raise plenty of this type of debt at increasingly favorable interest rates — all the way to 0% on one of its recent rounds.

Using the proceeds of these debt offerings to buy BTC has so far been an excellent choice. With the currency trading near all-time highs, MicroStrategy’s outperformance recently earned the NASDAQ 100’s blessing as a new index constituent.

Read more: What is the next MicroStrategy catalyst after NASDAQ 100?

Obviously, a BTC collapse could cause panic among shareholders or lenders and force MicroStrategy to negotiate. However, there’s no particular price at which MicroStrategy must liquidate BTC.

It has approximately $7 billion of outstanding debt that matures in increments of a few hundred million dollars approximately once per year for the next decade. In the meantime, it only needs to make nominal interest payments and have sufficient cash upon principal maturity if a lender chooses to not elect conversion into MSTR shares.

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MicroStrategy founder Michael Saylor is planning a New Year’s Eve party in Miami Beach to celebrate his bitcoin (BTC) successes. Guests will celebrate his firm’s rally to an all-time high, its entrance into the NASDAQ 100 index, BTC surpassing $100,000, and Saylor becoming a deca-billionaire for the first time.

He will host the black tie affair at his mansion.

Although the event’s guest list is private, hundreds want in. Fans on X are already vying for spots and people are already complaining that their invitation hasn’t yet arrived. For most MicroStrategy investors, it probably never will.

Saylor floated plans for a BTC $100,000 party as early as November 2021 during its previous, $69,000 high. Although some had hoped to attend that party in early 2022, the collapses of Three Arrows Capital, Terra LUNA, Celsius, Voyager, and FTX obviously delayed those plans.

He has reiterated that promise over the years, including on the day BTC reached the magic $100,000 mark: December 5, 2024.

Manifest destiny and Saylor’s Great Gatsby party

Saylor recently likened BTC’s success in the US to manifest destiny, the imperialist belief that justified conquests and enslavements by white settlers in the 1800s.

Fans thoughtlessly used puns to raise their hand for Saylor’s party.

Read more: MicroStrategy bulls think Michael Saylor can pump it to 10X its BTC

Saylor recently teased his party on live television. After accepting CNBC’s congratulations for his management of MicroStrategy in 2024, Saylor praised President-elect Donald Trump’s appointments of digital asset-friendly chiefs at key regulatory agencies like the Treasury and Securities and Exchange Commission.

He also gushed about the incoming conservative majority, saying, “The red wave is incredibly auspicious for Bitcoin and for the entire crypto industry.”

He then agreed to host the BTC celebration party on New Year’s Eve. It will be, as he’s promised, very expensive.

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A Texas bitcoin (BTC) investor is facing two years in prison after becoming the first person in history to be criminally charged for failing to report capital gains earned from crypto.

According to a US Department of Justice (DoJ) report from December 12, Frank Richard Ahlgren III “falsely underreported the (realized) capital gains” earned from selling Bitcoin worth $3.7 million between 2017 and 2019.

The report detailed how Ahlgren was an early investor in BTC and made his first purchases as early as 2011. In 2015, he bought approximately 1,366 BTC using his Coinbase account and sold 640 coins two years later for a total of $3.7 million. He reportedly used the proceeds to buy a house.

When it came time for Ahlgren to prepare his 2017 tax return, he lied to his accountant by submitting a false summary of his gains and losses from the sale of his BTC.

Specifically, he claimed that he bought the crypto at higher prices than he actually did, allowing him to underreport the true size of his gains. He also concealed gains on BTC sold for a total of $650,000 in 2018 and 2019 by moving it through multiple wallets and using mixers.

The total tax loss from Ahlgren’s activity totaled more than $1 million.

Read more: Ukraine to tax crypto like securities when it becomes legal next year

“Frank Ahlgren III earned millions buying and selling bitcoins,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

He added, “But instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains, and sought to conceal another chunk of his profits through sophisticated techniques designed to obscure his transactions on the bitcoin blockchain. That conduct today earned him a two-year sentence.”

“Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable. This case demonstrates that no one is above the law,” said Acting Special Agent in Charge Lucy Tan of IRS-Criminal Investigation (IRS-CI)’s Houston Field Office.

“This case marks the first criminal tax evasion prosecution centered solely on cryptocurrency. As the prices for cryptocurrency are high, so is the temptation to not pay taxes on its sale. Avoid the temptation and avoid federal prison.”

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The higher MicroStrategy (MSTR) climbs, the more eyes it attracts. As the company’s market capitalization has swelled, veterans of finance are questioning its growth prospects — including some of its fans’ unique or redefined financial terms.

For example, a chartered financial analyst created a video questioning whether MicroStrategy’s supposed “bitcoin (BTC) yield” metric might have pyramid scheme mechanics. Many other critics have called the Michael Saylor-led BTC acquisition company a type of pyramid scheme.

Unlike a pyramid scheme, however, MicroStrategy doesn’t guarantee returns, distribute dividends, promise earnings from equity investment, or make any payouts to later investors from the proceeds of earlier investors.

Still, some critics are simply convinced that something must be wrong. Indeed, Ben Hunt laughed at a MicroStrategy investor redefining a conservative, 5% interest on cash equivalents as meaningful “earnings.”

Casting the claim as representative of deluded mania among MicroStrategy bulls, he flagged the irresponsible idea that such interest should deserve any earnings multiple whatsoever, let alone a 50X multiple.

MicroStrategy bought 423,650 BTC on incredible leverage

Investors who bought in early to MicroStrategy’s BTC-gobbling journey are certainly enjoying a meteoric rise; shares are higher even than its dot com bubble peak. MSTR is up 530% year-to-date and has a NASDAQ 100 index inclusion decision scheduled for tomorrow at 4pm New York time — a possibly bullish catalyst. 

Skeptics think investors coming in now, however, are late to the party and might be left holding the bag.

MicroStrategy has made no secret of its primary operation as a corporation: acquiring large amounts of BTC using leverage. Most recently, it funded the purchase of 21,550 BTC.

In essence, MicroStrategy diluted its own stock to buy more BTC at close to the currency’s all-time high.

A slide from MicroStrategy’s third-quarter investor meeting describes its strategy as “intelligent leverage.” It says the company’s BTC holdings increased from 189,150 to 252,220, a 33.3% jump.

During the same quarter, the outstanding assumed diluted shares increased from 20,764,000 to 23,510,000, a 13.2% increase.

Despite this dilution, in MicroStrategy’s view, its “assumed diluted shares” have actually increased its BTC holdings. Thanks to investors bidding a premium for MSTR above and beyond its BTC holdings, the company’s ability to sell shares and convertible debt to capture that premium allows it to accrete BTC on an assumed diluted share basis.

Read more: Why is MicroStrategy nowhere close to its all-time high, unlike bitcoin?

Skeptics see doom on the horizon for MicroStrategy

Of course, if or when MSTR’s premium to its BTC holdings were to ever collapse, this mechanism would cease to function. As long as MSTR trades at a premium to the company’s BTC, however, the company can continue to accrete BTC on a fully diluted basis.

For many years in the future, MicroStrategy also has to repay its loans via repayment to lenders in cash or stock. If it cannot pay those loans off, lenders are senior to shareholders.

Bears think these future debt obligations are a serious concern. Bulls consider these loan amounts — typically in the high hundreds of millions or low billions of dollars per year for the next few years — as negligible obligations for a company whose market capitalization is now $94 billion.

MicroStrategy is staking its future on BTC’s ability to continue to appreciate. Skeptics think CEO Michael Saylor is the leader but his shareholders are the sucker at the table.

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Bitcoin developer Antoine Riard has disclosed two new bugs that affect wealthy node operators within the Lightning Network, a payments protocol with over $500 million worth of BTC capacity.

The transaction jamming attack exploits Bitcoin Core software’s transaction selection, announcement, and propagation mechanisms of Lightning Network-connected Bitcoin full nodes.

Dubbed “transaction relay throughput overflow attacks,” the bugs allow an assailant to steal bitcoin (BTC) from the wealthiest Lightning nodes. Although there’s no evidence that a thief has actually exploited these bugs, Lightning implementation providers Éclair and Core Lightning are already working on software patches.

Specifically, the cost- and time-intensive attack is only worth the effort for victims with more than roughly $130,000 worth of BTC and is best suited for nodes holding above half a million dollars.

Bitcoin Lightning transaction relay throughput overflow attacks

The attack would enable a thief to steal funds from the victim’s Lightning channel by preventing time-sensitive transactions such as justice transactions from propagating through the network. After jamming the node for 32 Bitcoin blocks (Core Lightning defaults) or 140 blocks (Éclair defaults), the robber could make off with an irrevocable bounty.

In regular clock time, that would mean approximately 5.5 hours to steal from a default Core Lightning node or 24 hours for a node running Éclair default software.

By default, nodes limit the number of unconfirmed transactions they transmit or accept at any given time to reduce the chance of various denial-of-service (DoS) attacks. The attacker can conduct a high overflow jamming attack that blocks the victim from sending a justice transaction by continuously overwhelming the node with high fee rate transactions. 

By default, a Bitcoin Core node will always choose to propagate the highest fee transactions first and queue lower fee transactions — even if one of those lower fee transactions is the nodes’ own Lightning Network justice transaction.

This is one bug that Core Lightning and Éclair are patching, thanks to Riard’s responsible disclosure.

Again, the high overflow jamming attack blocks the victim from sending an anti-theft transaction by continuously overbidding with higher fee transactions, hence the name “high overflow.”

For this reason, the attack is expensive — with initial estimates north of $130,000 throughout the hours of the attack.

In addition to this high overflow jamming attack, Riard explained another variation of the transaction jamming bug: low overflow.

A variation with thousands of low-fee transactions

The low overflow is a cheaper variant but less reliable for the attacker. Here, to save money, the attacker targets a victim trying to send a transaction to nodes with a maximum unrequested transactions queue of 5,000 per peer.

The attacker floods the victim with a large number of transactions using a minimum transaction fee rate. The victim then announces these transactions to its peers and the peers try to drain the queue by requesting those transactions. If the attacker can maintain a queue of over 5,000 transactions, the attack might be successful. 

Technically speaking, the low overflow attack leverages Lightning nodes’ interaction with Bitcoin Core’s MAX_PEER_TX_ANNOUNCEMENTS default, causing inbound transactions to overflow this threshold.

Read more: New Bitcoin Lightning Network bug: Unattributed payment routing

Patching the bug

Riard proposed several mitigations for Lightning Network node software implementations. These providers are working on patches, including random transaction rebroadcasting, more aggressive fee-rebroadcasting, limitation of identical finality time-sensitive transactions, and over-provisioning of transaction relay throughput with peer nodes.

He also proposed changes to Bitcoin Core itself to assist Lightning Network operators. However, changes to Bitcoin Core typically take far longer and need more reviews than Lightning software implementations.

Riard’s Critical Vulnerability Error (CVE) request number 178025 is tracking bug patches of his high and low transaction relay throughput overflow attacks.

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Bitcoin Cash (BCH) founder Roger Ver made a rare media appearance on Tuesday to pump a microcap altcoin, trash talk bitcoin, and explain how his alleged tax misfilings would have been the fault of his accountant.

Former Fox News anchor turned Republican media exec Tucker Carlson interviewed Ver for 40 minutes without challenging his claims, granting him unchecked airtime to frame his indictment as a conspiracy by intelligence agencies to silence him. Elon Musk amplified the broadcast.

The US Department of Justice alleges that Ver evaded approximately $50 million in taxes in 2017. Prosecutors claim that Ver purposefully withheld information, including $240 million worth of crypto transactions, from his accountant in order to avoid paying taxes. Ver is currently facing extradition from Spain for US mail fraud and tax evasion.

Read more: Roger Ver arrested for tax fraud while promoting Bitcoin book

During his interview with Carlson, Ver claimed that he renounced his American citizenship because he upholds American values.

“That’s exactly the value that America was founded on,” Ver said. “It was a bunch of British people that renounced their citizenship and said, ‘I don’t like the laws you guys are passing; I’m not going to be a part of this anymore.’ So renouncing your citizenship is actually one of the most patriotic, American-esque things you can possibly do.”

Carlson suggests US gov’t out to get Roger Ver

Carlson’s one-sided portrayal of Ver’s situation assumed that the US government has an interest in silencing Ver’s speech and subverting Bitcoin’s original promise of financial privacy.

“Maybe it’s not about the taxes,” Carlson opined. “Could there be another reason the US government is angry at you?”

Ver was happy to agree. “I think they’re just angry about my lack of obedience and lack of, y’know, kissing their ring. I was the first person in the world to begin investing in bitcoin… and invest in businesses that made it easy to use bitcoin as money.”

Using his maximum, 109-year sentence for rhetorical effect, Ver warned listeners that if they did not take action, such as visiting his website or signing his petition, he might spend the rest of his life in prison.

The real winner of Tucker Carlson’s interview: Zano

Ver, of course, spent his final years in the crypto industry promoting a fork of bitcoin, Bitcoin Cash (BCH), and a sequence of various altcoins. One such altcoin, Verse, held space on the homepage of his flagship bitcoin.com website for months.

Nowadays, Verse is down 97% from its all-time high. Ver’s BCH is similarly down 97% from its all-time high against bitcoin.

Read more: Roger Ver released on $160K bail as US seeks extradition

One of Ver’s latest darlings is Zano, some sort of next-generation privacy scaling solution for bitcoin, ether, and even user-created altcoins. The micro-cap coin curiously rallied for days ahead of Carlson’s interview that contains six shout-outs for Zano. 

Three months ago, Zano was worth less than $80 million. After Carlson’s interview, which has amassed over 2.5 million impressions on X and 170,000 views on YouTube at press time, Zano has rallied north of $180 million.

Roger Ver asks for help

The interview covered other topics, including the Blocksize Wars and earlier years of Bitcoin history. Carlson even asked Ver who he thinks is the real Satoshi Nakamoto.

“I don’t know, and if anybody knows, I’m not aware of that,” Ver responded. “Whoever he is, or they are, or she is, they deserve their privacy.”

Ver doubted that intelligence agencies had initially created Bitcoin. However, he believes that they eventually hijacked it.

Roger Ver has filed a motion to dismiss his criminal case alongside other attempts to prevent his extradition from Spain to the US. His attorneys argue that the exit tax and tax codes involved in his alleged violations were too vague. He also claims the US government violated his attorney-client privilege and infringed on his free speech.

In both his interview with Carlson and across his own channels, Ver urges the public to sign his petition as he fights criminal proceedings from Mallorca.

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Google announced a new quantum computing chip called Willow, and doomsayers already think it could break Bitcoin in at least two ways.

According to Google, Willow can solve in five minutes a problem that would take most supercomputers 10 septillion years to solve. Critics say that this power could overtake Bitcoin’s hashrate in a matter of minutes, rewrite the Bitcoin blockchain, or even steal Satoshi Nakamoto’s coins.

The price of bitcoin (BTC) dipped slightly yesterday around the time of Google’s 4pm post-market announcement and over the past 24 hours, remains around 3% lower.

Willow reportedly reduces the rate at which qubits “leak” information to the outside, non-quantum environment, improving the chip’s ability to retain information needed for quantum computations. This improves the new chip’s ability to remain quantum instead of becoming a classical chip after too much data leakage.

With its breakthrough, Google moved quantum computing one step closer to becoming a practical reality and potential threat to Bitcoin’s security.

The first threat would be to Bitcoin’s mining network. Bitcoin is secured by a globally distributed network of computer operators who expend time, electricity, and machinery to hash numbers and compete for the right to add and order new transactions atop Bitcoin’s blockchain.

If a quantum computer could suddenly perform most of this computational work at a fraction of the network’s existing time, electricity, and machinery, that computer could overtake the network and censor, reorder, or even double-spend BTC transactions.

Read more: Crypto reacts to superconductor claims that made front-page news

Could Willow steal Satoshi Nakamoto’s bitcoin?

Beyond a hashrate takeover, the second threat people flagged was to Satoshi Nakamoto’s BTC. The Bitcoin creator still owns over 1 million BTC and used a rudimentary pay-to-public-key (P2PK) format to store unspent transaction outputs (UTXOs), which reveals the public address on-chain.

Because Satoshi’s public keys are public, this could give a quantum computer a chance to crack its associated private keys with brute force effort.

Unlike classical chips, quantum chips could execute an exponential amount of computation — as evidenced by Google’s reduction of a 10-septillion-year task to five minutes.

Bitcoin developers abandoned the P2PK format for a system that only reveals the public address during a transaction. Even then, the modern format generates a hash of a hash of the public key receiving the coins.

This not only improves privacy but also limits the allure of brute force attacks, since the attacker would have to decrypt the public key first, and then further proceed to decrypting its private key.

In short, modern standards reduce the chances of exposing the actual public key during most BTC transactions and are, therefore, more quantum-resistant than earlier standards. However, Satoshi’s coins — all of which were mined prior to 2012 — are still vulnerable to this P2PK format attack.

Ava Labs co-founder Emin Gün Sirer recommended freezing Satoshi’s coins and sunsetting P2PK transactions altogether. He also, of course, boasted that he has a method to make digital assets more quantum-resistant.

However, no one has stolen Satoshi’s private keys yet.

Bitcoin hasn’t fallen to a quantum computer yet

Most people, even after Google’s announcement, still doubt that quantum computing actually poses any near-term threat to Bitcoin’s hashrate or Satoshi’s coins.

Google also plans to research potential real-world applications for Willow, which indicates that its accomplishments are impressive yet narrow in scope. It’s not quite ready to leave the lab yet, so to speak. 

It serves as a good reminder, however, to blockchain developers. It’s important to make digital assets more quantum-resistant, and Bitcoin will probably need to hard fork a protocol change in the future to adopt quantum-resistant cryptography.

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