GM. This is Milk Road, the crypto newsletter thatβs like noise-cancelling headphones for market fears.
Hereβs what weβve got for you today:
- βοΈ Could AI crack your wallet?
- ποΈ The Milk Road Show: Bitwise Says Near Could 30x - And That's Just the Base Case.
- πͺ Moody's just gave Sky Ecosystem a B3 rating.
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"BUNKER MODE": COULD AI CRACK YOUR WALLET BEFORE QUANTUM DOES? π
On Wednesday, Justin Drake (a researcher at the Ethereum Foundation) asked the whole crypto industry to start planning for something he calls "bunker mode."
His worry is that AI could break the security protecting Bitcoin and Ethereum wallets, and in the worst case, "in months not years."
Every wallet has a private key (your password) and a public key (created from that password, and safe to show the world).
The system tying them together is called ECDSA, and it works because nobody has the compute power to run the process backwards and get your private key from your public one.
Crypto's long-running fear has been Q-Day, the day quantum computers get strong enough to do exactly that.
Drake thinks AI might get there first, and do so using current compute hardware.
By "break," he means recovering a private key in about a week using hardware that exists today, like a big cluster of GPUs (the chips that train AI models).
His fear comes from how fast AI research is moving. In August, an internal version of OpenAI's next model solved or advanced ten long-standing open problems, including one in cryptography, for about $2,000 of computing power.
The coins in the firing zone are the ones whose public key is already visible, which happens the first time you send from an address.
Glassnode counts 6.04M BTC (~30% of all issued bitcoin) with public keys already visible.
About 1.9M of that is exposed by design, mostly the oldest coins from Bitcoin's early days (Satoshi's included).
The other 4.1M got exposed by habit, through reused addresses.
Drake's fix is a calm, gradual migration of funds to fresh addresses that have never revealed their public key, with the most sophisticated holders moving first.
Not everyone bought it though - and one of Bitcoin's best-known cryptographers needed just two words to respondβ¦
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"BUNKER MODE": COULD AI CRACK YOUR WALLET BEFORE QUANTUM DOES? (P2) π
"Fud-burger."
That was Adam Back (CEO of Blockstream), who has clashed with Drake over Bitcoin's design before.
Vitalik landed somewhere in the middle. He agreed the risk from AI is real, but he told holders not to scramble to move their funds today.
He also warned that the "lattice" cryptography the industry has been counting on as its quantum-proof backup could take serious hits from the next two years of AI progress.
Either way, a big chunk of the exposed bitcoin isn't sitting in personal wallets. π
Exchanges alone account for ~1.6M exposed BTC, because they reuse addresses as deposits and withdrawals flow in and out.
(Glassnode stresses it isn't a safety ranking, and any custodian can fix it by moving to fresh addresses.)
The coins nobody can fix are the old ones whose owners are gone, Satoshi's included, because moving a coin requires the private key.
Bitcoin's main answer for those is BIP-361 (a Bitcoin Improvement Proposal from developer Jameson Lopp), which would eventually freeze coins left in vulnerable addresses. It's still a draft, and its clock runs about five years from when a quantum-safe address type goes live.
That timeline was built for quantum computers, while Drake's worst case is measured in months.
Ethereum has a dedicated post-quantum team, and Drake says he'll push to speed up its move to hash-based cryptography (a style already considered safe against quantum attacks).
From where Iβm standing: this is a fire drill.
Nobody has shown an actual attack, and the fix for regular holders is cheap: stop reusing addresses, and keep long-term coins somewhere you've never sent from.
John told PRO members to do exactly this, if they were worried, back in August.
In his plain-English quantum explainer, he said to send your coins to a wallet you've never sent crypto out of, and then just leave them there.
His summary for anyone panicking:
"The nerds will handle this, I promise you."
P.S. If you want our analysts' takes before the panic hits your feed, try Milk Road PRO for $1 for 7 days.
CALLING ALL CRYPTO NERDS π₯
If you wake up and check Bitcoin before the weather, spend too much time on Crypto Twitter, and can actually write, we might have a job for you.
Milk Road is looking for a crypto-focused writer/content creator to join the team.
BITE-SIZED COOKIES FOR THE ROAD πͺ
Bitcoin miners made money by owning the machines. What if you could do the same with AI? B3 Labs lets investors own Nvidia GPUs and get paid when AI labs use the compute.*
Tom Lee says BMNR will stop buying ETH once its treasury hits 5% of circulating supply, a hard cap set at Token2049.
Moody's just gave Sky Ecosystem a B3 rating, the first time a major agency has rated a stablecoin protocol.
NEAR flipped XLM to crack the top 20 after an 8.7% surge, fueled by real growth in its Intents product.
*this is sponsored content.
