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Blockspace: AI & Bitcoin
What Trump's Quantum Computing Executive Order Actually Means w/ Alex Pruden
00:19:25
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- [00:00]
A
Welcome back to the Blockspace podcast, brought to you by CleanSpark. Uncle Sam is preparing for quantum computing. That's right. This week, President Trump signed an executive order that mandates that all government bodies and contractors must migrate sensitive systems to post quantum cryptography by 2031. To help us unpack all of this for today's bonus show, we welcome Alex Pruden, the CEO of Project 11, to break down the executive order, what exactly it does and means, the current state of quantum research and obviously how all of this relates to Bitcoin. Hope you all enjoy.
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B
And we're going to be investing in American quantum leadership like never before to stay ahead of the pack. We're way ahead right now. We'll keep it that way. The second order I'm signing directs federal agency to transition to what is called quantum cryptography. Do you know what that is?
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C
So, Alex, what is this? What did he sign? Give me an explainer because is the White House doing quantum. What's going on?
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B
Yes, there's two orders. Okay. So many mentions it in the clip. There's one about quantum leadership generally and that's really about investing in generating quantum computing and quantum enabled technologies. So quantum sensors is like another application for quantum mechanics that came up in the news recently because it was, it was thought that potentially some experimental quantum sensor was used to help recover the downed pilot in Iran. So stuff like that is part of quantum. And so they want to, basically they've mandated that, that the US specifically the Department of Energy, invest more in basically developing quantum technologies internally as well as investing in building a workforce around quantum and also building a scientifically, I think they call it a scientifically relevant quantum computer. I can't remember the exact term in there, but it's not, it's not cryptographically relevant. It's a scientifically relevant. You know, you could read that a few different ways. My read is that this is, you know, they don't necessarily expect there to be. This is, by the way, by 2031 is when they aim for that to be scientifically relevant, I would say is like a slightly less specific term than cryptographically relevant. But bottom line is, you know, they want the US to be a leader in building and to be a pioneer in quantum technology. General, that's an. And the first executive order basically directs all these agencies to start planning for that. The second executive order is more relevant to Project 11 and probably to digital assets, although they're not mentioned specifically. It mandates that the federal government effectively adopt post quantum cryptography by 2031. And not only the federal government, but basically like any vendor that is serving the federal government, you know, or anyone the federal government is paying is through contract relationship or whatever, also has to adopt PQC and specifically the FIPS standard PQC or the NIST standardized FIPS compliant pqc. So that's sa. It's not important what those are, but basically those are the standards that the government had previously specified. What's notable about this is previously the government guidance such that it was was this kind of high level document from NIST from a couple years ago that basically said, hey, for any high value systems, we need to deprecate classical cryptography by 2030. And then really we should deprecate it everywhere by 2035. But it was very vague and you know, a lot of people kind of looked at that and said, you know, 2035, we can kind of get the can. By the way, actually that that original document didn't mention post quantum cryptography at all. Just said, hey, we have to deprecate the old cryptography. So this, this explicitly does two things I think that's they're important to know. One is it pulls forward the timeline from 2035 to 2031. Secondly, it said, it states directly, hey, these are the algorithms that you need to adopt. So what is the upshot here? The upshot here in my mind is that the federal government, specifically the White House is recognizing that there is like this is an opportunity. Quantum technologies are advancing faster than people possibly expected. There's a chance they're trying to position this as an opportunity to gain American leadership in this up and coming field of technology. And they also recognize that as this technology proliferates, all of our systems all of going to potentially be made insecure. I mean, as you guys know, there's already a whole bunch of panic going on around all these AI models that apparently there was news today that that the reason that Mythos got export controlled or Fable got export control is they apparently broke all of the NSA systems that they tested it on within a couple hours. Right. So there's already like, I think a lot of hair on fire regarding cyber security. And so I think this is just like I said, you know, an attempt by the White House to get ahead on, on this new trend.
- [04:39]
A
So one kind of cheeky observation going back to making sure the government contractors are quantumly secure, maybe we do just need to get a strategic bitcoin reserve so that we can get the ball rolling on a soft fork for this. But tongue in cheek aside, Alex A quick question for you. The executive order, to me reads as either one of two things. It reads as lip service is something that's important and has been on the
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B
government radar for a while and they've
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A
already been funding it. Or, and, or it is recognizing and acknowledging, like what you said, with the capabilities with Iran for rescuing that downed pilot. They're seeing the application of this and they're saying we need to go into overdrive. What do you think? Do you think it's somewhere in the middle? Do you think it's both? I think it's.
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B
I think it's both. And it's important to note that actually this executive order is an unfunded mandate. They actually, in the later half of the security one, they say, hey, we direct all of these agencies to find cost savings via migrating to cloud computing, et cetera, to pay for this. They're not actually putting any more money towards this. They're directing that money through. Cost savings is actually supposed to be applied. So in that sense, it's a little bit weaker than it could have been. I mean, they could have said, hey, we're directing these agencies to find, you know, or we'll ask Congress to allocate more money to pursue these priorities. They didn't do that. Right. But, yeah, I think, I think they're both trying to position, you know. Yeah, it's kind of, I think a little bit of both, I guess. In answer your question, one thing about
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C
the executive order is that it looks like it mandates vulnerability disclosure in a more formalized way. This seems big to me because a lot of our game theory around, like, how potential bitcoin quantum break would happen or other crypto assets revolves around how it's disclosed and who has the computer and that. Do you have any insight to this or any takes on this part of the executive order?
- [06:35]
B
I don't think. Yeah. I don't necessarily see this disclosure requirement affecting the game theory of how potentially a quantum attack on Bitcoin would happen. I think it specifically is directing, you know, this vulnerability assessment. There's, and there's a whole bunch of parts of this. It's like there's a cryptographic bill of materials they're asking for, for all these agencies, Effectively, what they're. They're doing is in more specific terms, adding requirements that, you know, these agencies are going to be expected to tell the White House, hey, this is exactly where we're vulnerable today. Right. And so these disclosures and these assessments are basically just, I think, aimed at the heads of these agencies and they're in effect, the messages, hey, we're telling you, you need to get serious right now. They're not like, again, because they're not funding it. It's like not as strong of a you need to get serious as it could have been, but I think it's really mainly dedicated to these agencies. Now, interestingly, I was actually, I'm getting ready to ship a quick X thread on this, but it's like, I'm kind of curious on how the DOJ or the Department of Treasury is going to handle this disclosures because the DOJ has seized all this bitcoin, right? And now the Department of Treasury, I think technically is supposed to know that's supposed to form the core of the bitcoin Treasury. So how do, like, how is that going to be disclosed to the white assets? Because, right, the, you know, the US Government obviously can't mandate or force through a change to bitcoin, as we, we all know. And so I think it'll be kind of interesting to watch, to see how that gets handled. Because, and that's, and that's really, I think as far as digital assets concerned are concerned, you know, you have to kind of read between the lines and see what is implied by this. I think the only other major thing that's implied by this is, you know, again, like to the extent that anything that is built on a blockchain could ever become critical national infrastructure, whether that's through a strategic bitcoin reserve or whether it's stable coins, you know, that probably is ultimately going to fall under some relatively strict cybersecurity guidance that the rest of the government and much of, you know, critical industry has to already come under. So I think, you know, this, you guys know that I've been beating this drum for a long time. I think this just adds more fuel to fire and I think takes away the arguments as for why it's okay to keep procrastinating and thinking about this.
- [08:38]
C
So part of this is the. Is that it now, now there's like actual post quantum cryptography that is specified that you need to start integrating. My cursory review is that none of these are algorithms that have been proposed for Bitcoin because Bitcoin has a kind of more unique challenges. I'm curious your thoughts on the landscape of the specific cryptograph post quantum cryptographic schemes. Does bitcoin look at these and see any of them as interesting or promising, or is it just something that's happening in parallel to the existing discussion of what it might look like to do these on Bitcoin.
- [09:23]
B
Yeah. So I'd say the scheme on Bitcoin that's received the most attention is the scheme from Blockstream called Shrinks. I think that's probably the one that most people have focused on that is it's a variant of a NIST standard for that's a stateful signature scheme called xmss. So technically like that's, they don't. Yeah, that's not mentioned in this executive order. And so I guess what I'm saying is like you got to kind of really squeeze, you got to stretch rather your definition of what is compliant and standard in the text of this order and you'd have to really be quite flexible near definition to say that the leading candidate for a bitcoin post, quantum signature fits there. But that said, it's important to remember none of the cryptography used in Bitcoin or at least none of the signature, the curve that the signatures currently are built around are standardized. In fact famously Satoshi picked the non standard curve for the it's a NIST standardized algorithm but using a non standard curve explicitly because it was a government made standard and then no one trusted it. And so you know, like at the end of the day I think it's, it's Bitcoin doesn't have to adopt these standards. I think the question is though, if we want, you know, what is the government going to do or how is the government going to view this asset class if they don't, are they just going to be like ah, whatever this is just make up, made up fake money, we don't care about this, we're not going to ever integrate it or make an effort to integrate this and the about our financial system or are they just going to like kind of give it a pass? Like ah, they tried to be compliant, they sort of modified the standard and that's fine. I don't know, it's hard to say.
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C
You mentioned the cryptographic bill of materials. I don't know how interesting of a topic that is. I don't really know what that is or means when what is what what is that?
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B
It's basically just a simple version of it is like look, there's like an analogous concept is the software bill of material. So if like you know the government has a, you know, a vendor, they basically like they built a, I don't know like a website, say the VA website. The software bill materials is basically like hey, here's our actual code or implementation but also here's all the dependencies Say we have, we're building on next JS or something. There's a whole list of these dependencies. And this is important from a cybersecurity standpoint because again, the way software development happens is typically one person is not building everything. There's some libraries that rely on from various parties and oftentimes this is where vulnerabilities, you know, things get hacked is because someone somewhere down the line of dependencies never bothered to update their schemes. So this is really what these cryptic like this bill of materials or cryptographic inventories it's also called comes into play. So I don't think there's really anything maybe worth noting on the part of the, of this executive order for these government agencies other than it's good practice for them to ask for this as a starting point. I think actually though, the interesting part, maybe for the broader industry and blockchain is this is going to have to be step one for basically think about a company like Coinbase. A cryptographic bill of materials for a company like Coinbase that integrates, I don't know, a thousand different blockchains, all of which use different versions of various cryptography and all of which are considering different versions of post Quantum cryptography is going to be an enormous undertaking. And again, in this case, we're not talking about necessarily information being exposed, talking about value being lost. And so this is, this is again, like, I think for a lot of these infrastructure companies that are touching blockchains and digital assets, specifically this effort for a cryptographic bill of materials. If you think it's going to be hard for the government, I think it'll be at least as hard for any infrastructure provider in crypto.
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A
Alex, can you give us a checkup on where you feel like the discourse for quantum proofing Bitcoin is at this point, it seems like Blockstream has really taken the torch here in terms of developing a standard that most people think will be leading. I think that in some cases it's quenched some criticisms that developers aren't doing anything. Where do you think we're at in terms of this discussion? Because a year ago or earlier this year, we kind of reached fever peak mania in the sense that people were scared about it or saying there was nothing wrong, there's nothing to do here. And the conversation seems to have died down. But what are you seeing on the ground in terms of actual development within the people who would drive this forward?
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B
Yeah, I think you're right. I think Blockstream and Jonas make in particular have kind of taken the ball on this and they're pushing forward on, on this Shrinks proposal, which I think is positive, I think so. Whereas a year ago, I think, I think this is broadly, you know, broadly just viewed as like not in the Overton window at all. Quantum's fake, blah, blah. Now I think it's like people are talking about it. Blockstream is doing something in terms of, I would say research. I'm a little bit, I guess I think one danger I see here is people are, I think very quick to just reach for the. Oh, Blockstream is working on it. We're good. And I mean ultimately Blockstream working on it in form of research is good, but that's a very long way from like this algorithm has been implemented, it is being run in various test nets, which by the way costs a lot of money to run rigorously. And by the way, you also need to integrate this into, I don't know, a ledger. Things like that. Like all, all of those steps are very, are pretty far out there. And, and I, I would say there, there was a bunch, I would say there's a burst of initial progress from this. Like in terms of describing the Shrinks algorithm, Blockstream and Jonas are now on a, basically a PR campaign to go talk about it everywhere. I, I haven't personally witnessed any, A bip. There's no BIP around this. There's supposedly going to be one, but there is no BIP that's yet been authored. And other than it being implemented on their own liquid side chain, there's not really anything else tangible that we can look at with regard to this proposal, by the way. And there are other proposals that people have talked about and some folks have talked about isogenies, which are very, it's very, I would say, exotic on the spectrum. But others have, you know, have talked about lattice based cryptography. Right. And that's exactly the type of cryptography that the EO is trying to standardize. And so, yeah, I think it's still pretty early and I guess my, my caution to the industry would be like, okay, just, you know, this is all of our system, like blockstream does not own Bitcoin. We all are stakeholders and so we all need to think, continue to think about this and continue to invest time and effort into making this happen.
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C
If, you know, we have, there's like five different things associated with the quantum discussion. There's the cryptography, there's what do you do about old coins? What do we do about migration? You know, each of these is a potential, almost certain like point of disagreement in the community. And it almost seems like insurmountable whether we'll actually be able to, you know, have any kind of forward progress if we, if we do decide to soft work. Which of these do you think today, now that there's been a year, half a year's worth of quantum discussion, which of these do you think is the biggest tripwire or for just the progress towards a post quantum bitcoin?
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B
It's interesting, quite frankly. I think the biggest tripwire and the biggest impediment is apathy. So it's none of the things you mentioned. It's just people being like, oh, other people working on it. It's hard. But smart people are out there. There's some core devs out there. They're like doing some black magic inside of a room. And I think that's just nonsense. And I think the apathy is ultimately, if we fail, it's because of this apathy that's pervaded everyone's mind on this front at least including very large stakeholders. I think the stakeholders, even ones, I think I would say, and I talked to a fair number of folks that have a lot of bitcoin. I think they understand there's a big risk, but I think there's a fear in provoking some of these emotions that exist within the community around these issues that you're talking about with satoshi's coins and blah, blah, blah. They don't want to be perceived as enemies. And so I think that is encouraging this apathetic attitude. We're like, well, we don't want to weigh in because we don't want to get blamed. So I think it's the apathy and honestly I think the attitude that there are all these hard issues as you framed it is I also think a tripwire because I think, look, at the end of the day, I would distinguish these into two categories of things. There's engineering problems, there's like right now the thing can be, you can reverse engineer a signature with quantum computer and you want to get a signature that doesn't allow that. So there's just a strict, like writing that code, putting it on a test net, migrating value into new UTXO type. Like so there's just, there's that part that is hard to be clear and it's difficult. There are trade offs or block space, et cetera. But like that is that, that is not. I wouldn't categorize that as like a philosophical issue. Like people are like, okay, is the block size too good? But ultimately like there's hard work to be done. That isn't like particularly controversial, I don't think. And then there's like all this, all these controversial topics. But look, I think there's. You can totally defer those. I think down the line, I mean there's absolutely no reason why we shouldn't. We don't really. There's no good reason why there's not already a signet or a test net that is public. The post quantum signatures are running a various types.
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C
Whatever.
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B
Forget shrimps, just take one of the off the shelf nist ones. I mean they're literally already implementations all over the place. There is zero good reason we don't have a test net already with this. Right. Part of the well part. And the reason the not the good reason that we don't is because of apathy. Generally people are like oh everyone else got it. We don't have to worry about it. But I think you know, like the Satoshi coins thing shouldn't be an excuse for why we don't want to tackle it. Right. And I think, I think that's kind of a takeaway for. I would encourage anyone who's listening to this. You know I like, I think this, that is the tripwire is thinking there's a tripwire, right? Ultimately there's going to be. I mean this is bitcoin. You guys have been around forever. Everything is political.
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C
Everything's political.
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What color my hair is, you know, whatever, right? Like people are all going to argue about it, whatever, it doesn't really matter. But ultimately the survival of the system depends on whether or not it is engineered and continues to evolve in a. In a way that it can actually achieve the function that Satoshi described. That's what we should all focus on.
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A
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