GM. This is Milk Road, the daily newsletter that's the good kind of peer pressure, pushing you to better understand crypto.
Here’s what we’ve got for you today:
- ✍️ Rejoice! Cramer sold BTC.
- 🎙️ The Milk Road Show: Solana Usage Is Exploding... When Will SOL Follow?
- 🍪 Sanctioning Russia may have permanently accelerated de-dollarization.
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JIM CRAMER IS SELLING HIS BITCOIN OVER QUANTUM COMPUTERS 🔐
On August 3, Jim Cramer told CNBC viewers he's selling every last one of his Bitcoin.
His reasoning: quantum computers will crack it within about three years.
He'd interviewed IBM CEO Arvind Krishna a few days before that, who said investors should be "paranoid" about quantum computers breaking modern cryptography in 3-4 years.
Obviously, Jim Cramer’s track record tells us he’s not someone we should be taking all that seriously (Inverse Cramer exists for a reason)…
That said, enough PRO members asked about the story that John Gillen (our crypto analyst) decided to write a tidy little breakdown on ‘the quantum threat.’
His advice, in short: pay attention to it, but don't freak out about it.
The actual threat looks like this…
Your wallet has a private key (your secret password), and that key generates your public key (the identifier everyone else can see).
On a normal computer, following the breadcrumbs to reverse engineer a user’s private key from their public key would take billions of years.
But a big enough quantum computer running something called Shor's algorithm could do that reversal in minutes.
Nowadays, your public key only touches the Bitcoin blockchain when you send funds out - so if you were to move all of your funds to a fresh wallet with no outgoing transfer history, you’d be safe.
But this wasn’t always the case.
Coins sitting in 2009-2010 wallet formats are exposed, because those formats wrote their public keys straight to the chain.
When you add the BTC held in 2009-2010 era wallets to the BTC held in wallets that have sent Bitcoin in the past, it adds up to about a third of every Bitcoin ever mined:
Source: Alphabet, BIP-360
Roughly 1.1M of those older coins are Satoshi's, and none of those keys can ever be un-exposed.
The simplest solution to protect against quantum: send your coins to a fresh address you've never spent from, and then leave them alone.
Though as John puts it, anyone with a quantum computer powerful enough to hack Bitcoin would have to walk straight past Satoshi's million coins to come after yours (unlikely).
… so when does a computer like this actually turn up?
That estimate has moved twice this year.
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JIM CRAMER IS SELLING HIS BITCOIN OVER QUANTUM COMPUTERS (P2) 🔐
The old consensus was that quantum was anywhere from 10 to 30 years away…
Then March happened.
Google's Quantum AI team published a paper with the Ethereum Foundation and Stanford showing that breaking Bitcoin's cryptography needs fewer than 500,000 physical qubits (the raw processing units in a quantum machine) and about nine minutes per key.
That's roughly 20x less hardware than anyone had estimated before.
The same week, Caltech and a startup called Oratomic said 26,000 qubits could do the same job on a different hardware design, given ten days to work on it.
Then there's what actually exists today:
Source: Caltech, Oratomic, Alphabet
And none of those machines are error-corrected at anything close to that scale.
The largest key anyone has publicly broken on real quantum hardware this year was 15 bits. Bitcoin uses 256.
Meanwhile, the shields are already going up.
BIP-360 (a new Bitcoin address type that keeps public keys offchain entirely) was merged into Bitcoin's official proposal repository on February 11, and it's live on a testnet with 50+ miners running it.
BIP-361 handles the messy part: moving everybody across, and deciding what happens to coins that never move.
John’s view: the CLARITY Act vote on September 14 will move BTC long before any quantum computer does, so that’s what we should be focused on right now.
Don’t get distracted by the boogyman. Always inverse Cramer.
Btw - this explainer only exists because a PRO member asked for it.
John answers questions like that one in the PRO feed most days, and posts his own buy levels as he sets them (including the two bids he's had open since February).
You can try Milk Road PRO for a buck for 7 days here.
BITE-SIZED COOKIES FOR THE ROAD 🍪
Austin Arnold Gave us his 3-signal framework for calling a Bitcoin bottom…
Jansen Tang: Security is still the biggest blocker in agentic commerce right now and there are three key pain points.
Lyn Alden: Sanctioning Russia may have permanently accelerated de-dollarization.
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