D (2:17)

Wow.

A (2:17)

This upcoming weekend. So if you're listening on Thursday or Friday, like tomorrow from when you hear this, it's going to be. And it's going to be all across the south, from Texas to Maryland. Could be like ice storm. That is, they're saying, like, of historic magnitude.

D (2:31)

Like, are you prepared, New England guys? I like that we layer in weather into the show every once in a while. Storm is coming, a lot of snow. Storm is coming, you know, both from New England. You know, we're. We'll be ready. We've got snow boots.

A (2:44)

Well, it's the thing, though. It's not the snow that I. You're right. Those who get snow, especially the more north, you go well prepared for that.

D (2:51)

Yeah.

A (2:51)

Grew up with snow. It's the ice that the south might get that will take down power lines and that could be definitely dicey. So if you are in the path of this storm, I don't know if it has a name, but you're supposed to be stocking up on stuff, you know, prepared.

D (3:04)

That's right.

A (3:04)

Better be, you know, prepare for the worst, hope for the best. That's right. In markets as well.

B (3:08)

That's right.

C (3:09)

As always.

A (3:10)

All right, well, let's hop right into it with Bimnet ab. Let's go now to our friend Bimnet Abibi from Galaxy Trading. As always, Bimnet, welcome to Galaxy Brains.

C (3:18)

Thanks for having me.

A (3:19)

What is driving the market right now? We've just. We'll talk about Bitcoin, but, you know, as you can see over my shoulder, the rally from the last two weeks got us as high as 98k, basically fully retraced.

B (3:32)

Yep.

A (3:32)

We're back in the 87, 88 range again. We'll talk about that in a minute. Broadly, as you stare at your screens today, what is driving markets?

C (3:43)

So I've spent the last two days probably harping on every single word that Trump says in relation to Greenland. And I think that is squarely what the market is focused on. There's some stuff going on with Japan and their bond market, but the biggest driver of risk sentiment right now is are we headed for some kind of either economic confrontation or a real confrontation with Greenland? It seems like Trump this morning at Davos put the military stuff aside, de.

A (4:16)

Escalated it a little bit.

C (4:17)

De Escalated it from the military stuff. And I think what he said was we would like Greenland. If not, we're not gonna be happy insinuating that there's gonna be some consequences. And just recently like 20 minutes before we started filming Denmark, their Prime minister refused to negotiate with Trump over buying Greenland. And so the pushback from the Europeans is still pretty aggressive. And when you had the initial de escalation event by Trump this morning, market ripped S and P was up know over a percent. And since the Danish comments, we've retraced a lot of that move. Hence why bitcoin went from 88 to 90 and then back down to 88. But again, this is price action in BTC that doesn't leave a lot of inspiration. Right. If you think about it like we went from 98 to 88 and it wasn't really on much. S and P sold off like 2%. And the question is, even if the market recovers, will bitcoin recover that quickly? Because you just liquidated a bunch of people that were getting optimistic for the year and now bitcoin's down year to date and so it just feels like there's not much to play for if we're like, oh, we're probably going to stall below 100 or right around 100. So why are you buying an asset that it doesn't have that much upside to it in the context of like its risk profile?

A (5:52)

Well, you mean it came down for no particular reason. It just, the rally stalled before 100. I mean so in that sense everything in the last two weeks with Bitcoin going from 87 to 98k, it's just range bound trading. Again, it did not fundamentally reset the trend in any meaningful way.

C (6:10)

But I think for bitcoin in particular, it's a very reflexive asset. And so once you start going up, it's a little bit easier to go up. But once you start going down, it also works in both directions as we've mentioned. And like, yeah, like the DATs are under pressure. You know, Saylor's still able to buy,

A (6:27)

he bought a big chunk, one of his biggest in $2 billion. Yeah, I don't know when. Since last week.

C (6:32)

95, it's at 88.3 right now. And so, you know, there are some questions in terms of how sustainable is that, particularly if you start to dip meaningfully lower. And yeah, in my head like we're still below the 50 week moving average. The setup still targets a move to the 200 week. It's the same setup, same setup. And like yeah. You had a retrace from 80 to 98 which in bull markets and bear markets like you know, 20% retraces.

A (7:01)

You've been saying this to be clear.

C (7:03)

Right.

A (7:03)

We're in a structural downtrend. Structural down.

C (7:05)

Structural downtrend.

A (7:06)

There'll be movements throughout.

C (7:07)

There'll be movements and like that's what you're seeing now.

A (7:09)

And you haven't seen anything to change that structural downtrend?

C (7:11)

Absolutely not. In fact like this type of price action is like what determin. Deters people from bitcoin, like another wave of liquidations after you start to get some hope. And it's like I could go buy like Nvidia or I could go buy Mag 7 I could buy gold. 2% in a straight line.

A (7:31)

Let's talk a little bit about gold because it's one of the only, I'm going to say it's security in the context of a Bloomberg terminal. It's obviously a commodity but it's one of the only tickers on Bloomberg where they have like 120 years of price data. And I was looking at the all time price chart of gold and of course relative to the magnitude that it's had in recent decades, for decades in the beginning of the price chart it looks flat because the movements are small relative on an absolute basis. Then you have in the 70s, right around 1971 and the Volcker era of inflation, a big run up. Right. Then you have a big run up again in the 80s and 90s, 90s and then you have now which literally looks parabolic. Now again when you look on that big of a timescale it's literally just roofing almost at $5,000 an ounce. What does this say about the global economy just at the highest macro level?

C (8:29)

I think it's wow 87. I think what it says is that folks are really worried about the long term debt profile of the world.

A (8:40)

Yeah.

C (8:41)

And it's just math and it's catching up to folks. And then at the same time there's a big push to weaken dependence on the US from allies and from non allies. And so how do you preserve wealth in that scenario? How do you manage reserve assets? You lean a little bit more into gold. That doesn't mean that these allies aren't going to still stay invested in the most dynamic economy in the world. Don't get me wrong, it's just more like the incremental stuff is leaning a little bit further away from the U.S.

A (9:16)

gold just looks more attractive.

C (9:18)

More attractive.

A (9:18)

If you wanted to let's say you're saying it's incremental and I think that's right. It's obviously not a wholesale dumping of US equities or even treasuries. Although demand is softening on the margin. Like if you were to look for an alternate denominator, is that basically your only option? It's the other fiat currencies.

C (9:40)

No, gold is what people should peg themselves first because it is the oldest money around and it's clearly working and it's accepted globally. Right. Every single culture outside of the US for the most part heavily invests in gold as part of their culture. It's really hard to not measure wealth creation in those terms or wealth preservation. Most importantly, I think the biggest risk to markets is runaway inflation and devaluation of the assets you currently own. And so it just looks really good. And then you have central banks that print fake useless money to buy real gold. Gold.

A (10:30)

Yeah. It's a good business to be in.

D (10:32)

Yeah.

C (10:33)

I'll tell you this, every 100 points that goes up, I feel shorter.

A (10:36)

Yeah, I hear you. All right, Bennett AB from Galaxy Trading, as always, thank you so much.

C (10:41)

Thanks for having me.

A (10:42)

Let's go now to our guest, Ellie. Ben Sasson, co founder and CEO of starkware, also co founder of zcash. Ellie, welcome to Galaxy Brains.

B (10:50)

Thank you, Alex. Really excited to be here.

A (10:52)

Yeah. Great to have you. You've been involved in cryptography for your career. You are a cryptographer by trade, is that right?

B (10:59)

Yeah, I was for many years a professor of computer science and cryptography and did a lot of research on zk, Snarks and Starks and other math.

A (11:09)

Is that how you got interested in the cryptocurrency ecosystem? Was your, your work in cryptography? Is it applied cryptography, crypto?

B (11:19)

Well, I was actually a very non applied researcher but I started leading research into like building stuff and then my life changed when I went and presented my academic work at the Bitcoin conference in San Jose in 2013. And I came off the podium and a whole bunch of core devs like, you know, Greg Maxwell and Mike Kern came up and asked okay, where's the code? We want to use it tomorrow. And there's like changed my life. So I, that's when I started moving over to, you know.

A (11:53)

That's so interesting. So you work on fundamental theory and yes, the underlying math, but you hadn't been building with it. Inspired to build though?

B (12:02)

Yeah, I mean, you know, I spent my research days at the Institute for Advanced Study in Princeton, Harvard, mit. You know well known theoretical places. But ever since that day, like, it took a turn and I just did more and more that's related to blockchain and practical stuff.

A (12:18)

So before blockchains, which obviously utilize cryptography at a foundational level, apply it in this new way, what was the sort of, was the theoretical research the pinnacle of a cryptographer or computer science, mathematics, mathematicians career, or was it like building cryptographic tools at the nsa? Like what was the what, what was the career before, you know, cryptos came around?

B (12:41)

Well, it still is the case that most of the academic cryptographers and theoretical computer scientists, they pursue things, you know, at the edge of possible all kinds of cool results about, you know, what a computer can do. And that still is the case. You always had this sort of influence or interaction in all branches of science between the fundamental science and then the applied stuff. Then some people move from one way to the other. So I moved from the very, very theoretical stuff to the very practical stuff and actually left my academic position. I had was a full professor tenured, and I left that.

A (13:18)

It's interesting. There's that old adage, and it may not be quite fair. I don't want to mog professors too much, but those who can't do, teach. But this is those who taught and got really now you do the reverse.

B (13:30)

Well, I manage, I run a company. One would say that I think the whole thing says those who can't do, manage, those who can't manage, teach, those who can't teach. Advice.

A (13:42)

That's good, I like that. But you would say that blockchains have created a whole new avenue and market for the usability of crypto cryptography. Right? Yes.

B (13:51)

So I was working on ZK proofs and two things had to happen for them to become a reality like in the real world. One was we had to do a lot of work to bring down the efficiency. These things used to be just impossible to work with. And that's a large part of what I did first theoretically and then practically. The other thing that had to happen was for blockchains to come. Because outside of blockchain, it's very, very hard to see a good business case for ZK proofs.

A (14:20)

Right, right. That makes a lot of sense. And I remember I was at Fidelity even as late as like 2018. ZK was thought to maybe be impossible or be impossible for anything truly complex that you maybe could, you know, prove that two plus two equaled four without sharing the inputs. But yeah, you couldn't put like a financial system behind this zero Knowledge.

B (14:40)

Right, right.

A (14:40)

We've made significant strides.

B (14:42)

Yeah. And I'm very proud that starkware did a lot in this, in this way of like proving that you could even have post quantum secure ZK Starks proving, you know, huge amounts of computation very efficiently on common hardware.

A (14:57)

So starkware innovates on zero knowledge technology. Give us an overview of what starkware is doing as a business. Because it is a business, not a think tank.

B (15:08)

Right. So starkware, you could think of it, the best description would be maybe it's the labs behind some of the best systems out there that are being used first of all by perps exchanges. So DYDX v3 was running on our technology, settling daily over $10 billion of volume. This was in the days before HyperLiquid Y. Today, three of the top eight perps exchanges and the only ones running on truly decentralized infrastructure are running on our technology. Those are Paradex Extended and ajax. We have serviced the likes of Immutable X sir, a lot of unicorns that need real high scale decentralized infrastructure. That's where Starcore comes in. And most lately we are behind, you know, the labs behind starknet which is Bitcoin financialization layer that services also, you know, Ethereum, you know, as of recently Solana zcash also integrated into it. So like the programmable hard money layer is being built on starknet.

A (16:21)

So how do we think of that in the context of layer ones? Layer twos, I don't know, sidechains, whatever role is it a ZK roll up? Like what is starknet in this way?

B (16:31)

So starknet is a little bit different and most of the, let's say layer twos are of the kind where you have like a single computer running and you have to trust the operator and then you sort of. It's a very centralized architecture. So we're the only layer that interacts with Bitcoin, Ethereum and these other chains in a ways that is very decentralized. Having, you know, several different sequencer and sequencers. And we're taking this decentralization approach much further. So you could characterize it as any one of those things. You could call it a, you know, a layer two or something like that. I would like to view it as a connecting tissue, an interoperability layer. Yes, something like that. Or you know, the integrity web, like this thing that sort of is integrated into many different systems of hard money and gives them more expressibility, better ux, lower fees and high scale.

A (17:28)

So we can go on Starknet and do DeFi with These assets, yes, you

B (17:32)

can do the best defi. You have perps exchanges, you have actually very successful games. People forgot about those. But like you have on chain games, you have consumer apps like wellness applications and stuff like that. And of course a lot of defi.

A (17:48)

Yeah, that makes sense. Defi. Still feel like we haven't you mentioned games, you know, as an example. And I think there's some truth to this. Like people wanted, especially in like 17, 18, maybe a little bit in 21 people wanted blockchains to be used for all this giant variety of things. Right. And I mean a truly wide and wide breadth of design space. Still it feels like to me as a longtime observer that mostly financial use cases have only really found product market fit. Would you agree with that character?

B (18:19)

I would even go further and say that blockchain as a whole does not yet quite have product market fit, even on the financial layer. And then I would say that you have these sort of sprints and sprouts that you know from time to time there's a lot of focus on one area. I will say this, first of all, a prediction for 2026. I think games are going to get a lot of attention, at least temporarily. Once again in 2026 and in this context I think you got to check if you enjoy gaming and you want to see what blockchain gaming looks like today. You got to check out Loot Survivor which is a very, very time consuming and fun game to play, which is on Starknet. Very good. So Loot Survivor, you can try it out. Very fun game to play.

A (19:07)

I've always want, I love gaming. I came up in the eras of Counter Straight. Well, I mean I'm old enough to have played, you know, Super Nintendo and the original Nintendo, but sort of in my formative game I had an Atari,

B (19:18)

like the first Atari. Well, 1K cassettes you would play. I love that.

A (19:23)

Well, I joke about how, you know, with the cartridge based consoles you had to blow on them sometimes to get the dust out. And literally nobody that I work with knows what I'm talking about when I say that in fact there are people here. Just as a quick aside that now I work with. This makes me feel old that haven't even seen the original Star wars movies. That's actually quite common, I'm told. But I always have wanted to see at least in the case of games that have digital assets in them, whether it's inventory or skins and stuff. Counter Strike is famous for a black market in skins or gold in some of the RPG games. Be Tokenized in some way or, you know, it always seemed like a great fit for blockchains.

B (20:04)

You got to check out Loot Survivor if we have time after this, all right. You're going to show like I'll get you hooked on it.

A (20:09)

All right. So I think that is an interesting prediction too because that's pretty counter consensus where people have maybe forgotten that people are still working on games. You know, what about NFTs are people. Do you have a view on whether those might not that I'm. I don't want to go too down

B (20:23)

rabbit hole, but I think everything that had its time on blockchain will have some resurgent in some other form. So I think NFTs as well will have sort of a comeback in some other form. Yeah, definitely.

A (20:36)

Okay. And while I'm on this list of things, token is tokenized real world assets. Right. You have stablecoins that are big, perhaps you know, near term on the road to being huge. If this genius act, you know, the bullish view of what the genius act might do. What about tokenized equities though? Do you think? Is this going to, is this something that starkware is interested in?

B (20:57)

Well, we're interested because everyone is. But actually, you know, you're a bigger expert on this. I'm not going to predict on that. I don't know, like it could go either way.

A (21:05)

Interesting.

B (21:06)

I don't know if rwas are going to be big or not.

A (21:08)

So starknet is built on zero knowledge technology. ZK Starks.

B (21:12)

Yes.

A (21:13)

What does the ZK now bring to this? Why is it, I don't know, is it more efficient? Is it more private? Talk to me about how ZKs work in the context of a, of a application platform.

B (21:24)

Yeah, so what? Okay, look, what blockchain has done, starting with Bitcoin is it's this infrastructure for things that require common knowledge or broad consensus about things like money or things of immense value. And it delivers integrity, meaning that you know that the right thing is being done with your Bitcoin even when you're not watching. And, and this integrity is delivered in a beautiful new way that involves everyone running the software and checking and you know, handing out Bitcoin to operators who service the network and increase its security. Okay, so it's a beautiful new way for offering integrity that doesn't rely on, you know, some person in a suit speaking, you know, or signing something. Okay, so it's a different way for offering integrity, but it involves a lot of people running the same software in a very slow way. Right, okay. So what does ZK give you? ZK gives you integrity through math. It allows you to know that the right thing is being done even when you're not watching. And the way it works with a blockchain beautifully is that as long as you have a layer of trust, which is the blockchain, you can now have that layer of trust enforce integrity on things that that layer doesn't even see. Right. So the ZK allows basically anyone to run things like a sequencer, a validator, you know, process transactions, operate a system, and you don't have to trust anything. That person does not have to have a suit or tell you who he is. And you can still trust that he's operating with integrity because of the integrity of math of zk. So it gives you both scale and it gives you privacy, because you don't need to see what's happening. You know that the right thing is being done. And that party can operate at immense scale. And you only need to sort of check one proof that can cover a million transactions and know that they were all legit.

A (23:20)

Interesting. Yes. So the scale part of it is that because we're collapsing a lot of information into one proof.

B (23:27)

Yes.

A (23:28)

So it's like off chain computation can occur that it wouldn't otherwise be visible to the blockchain participants, but the outputs you can trust.

B (23:36)

Yeah. A good way to give an analogy for it is the notion of sampling and polling. Right. What you have is the blockchain, which you really trust is sort of taking some random sample of all that's going on off chain. But because of the math of it, even this small sample can enforce and ensure that everything was done. Okay. So it's like this magic which is actually math, where you can take all of the information of a million transactions, mix it all together in a way that makes it very easy to see sample, and make sure that everything is okay.

A (24:11)

So is privacy a byproduct of the scaling? Or would you say scaling is a byproduct of the privacy?

B (24:16)

Two superpowers. ZK give you two superpowers. You could use one. You could. So, okay, I co founded zcash. There we went on the privacy angle. The proofs do not compress much. What they do is they offer you privacy that you don't know who's paying, who's receiving, and how much is being paid. It's not about scale, it's about privacy. In everything that Starcore did, we initially went after the scalability. So it's not about shielding stuff, but it's about Packing a million transactions into one transaction.

A (24:50)

Yeah. Interesting. But let's talk about privacy and blockchains to start. You know, were you in the ceremony? You know that there's that great NPR episode, right.

B (25:01)

It's an amazing. I was not. I did not participate.

A (25:04)

This is the initial key generation event, right, for the.

B (25:07)

The zk. Snarks yes. So I was not a participant in the ceremony. I knew of it and yeah, everyone should listen to.

A (25:17)

Wasn't it the case, I think that it's now been disclosed that Edward Snowden was involved.

B (25:22)

Yeah, a long time ago.

A (25:23)

Yeah, a long time. It was a long time ago. But at the time it was an anonymous participant in the, in the signing

B (25:29)

ceremony, was one of those who participated in the ceremony.

A (25:33)

So why. Well, I want to get back to starknet a bit too in the scaling, scalability and what that brings. But let's go into the zcash first example. How important are private payments? And are they not just for criminals?

B (25:47)

No. Okay. You know, I run a company with about 200 employees. We offer employees to receive part of their salary on starknet and it's very convenient. You know, I do this as well. So my CFO comes to me and says, look, that's a bit of a problem, right? Because like anyone, our competitors, you know, people working in the company could, with a browser, know what's going on. And we pay our suppliers on starknet and stuff like that. So. And it makes total sense, right. Anyone running a company understands that you're not going to put all of your supplier information and payments and employee payments on a blockchain today.

A (26:24)

Yeah.

B (26:25)

So you see, legitimate businesses need privacy. We all need privacy. Yeah. So it's not just for crude.

A (26:32)

I think that makes sense. This is, of course, a little bit of a rhetorical question I think is, well, let's just go right at it. Zcash is up a lot in price. Zec, the token for zcash just in the last five months after. I mean, it's one of the older cryptocurrencies after many years of being around, sometimes performing well as an investment, but also not for a long time.

B (26:56)

Right.

A (26:57)

Is that some kind of fundamental resurgence in the market's pricing of privacy?

B (27:03)

So I also wonder about it. You know, I co founded it, but I'm not involved in it today. I have a lot of admiration for it. I'm very friendly with, you know, folks on the team and so on, but I'm not, you know, part of the project today. So I don't know. I did ask Someone who I highly respect, I'm not going to mention who it is, but you know, what does he think the reason for this resurgence? So he said four reasons. Okay. One is like a really good product which is the combination of the Zashi wallet together with near intense. The second is scarcity, which went after the second having just there's less issue of it.

A (27:43)

Classic.

B (27:43)

I think the third then was the environmental, I mean the regulatory environment that is now much better for privacy. And the fourth is then, you know, KOLs and like market reception.

A (27:55)

And clearly there was an uptick in market interest. Yes, from kols. Right, from. From influencers, even from. I think one of the most famous or most diligent in promoting it has been MERT from Helios Labs. Obviously a big Solana guy.

B (28:10)

Right.

A (28:11)

Do you think we're going to get more privacy penetration applications built say on Solana, on Ethereum, on Bitcoin, like as a result of this resurgence?

B (28:21)

Yes, yes. Here I can. So for many years I told my team we always wanted to do privacy using, you know, ZK Starks, but we said there's not enough market demand based on this resurgence in interest. Now one of our main efforts, which I'm not going to share details about right now, but very soon is going to be an amazing set of new privacy based products and it's all because of this resurgence of interest in privacy. So on starknet, a lot of amazing novel things related to privacy are soon going to come.

A (28:53)

Very cool. So it makes sense though because for a long time in crypto and in blockchains, the, the, there was a lot of demand though for scalability and you've tried, the market has tried to figure this out. There's a, you know, theorem is sort of embarked on this hub and spoke model with a very decentralized L1. And then like you pointed out, I mean, I think the number one is base L2, which is an optimistic roll up. And I've, I've joked that the base is short for computer in Coinbase's basement. More centralized L2 sort of orbiting around the decentralized layer one. And that brings some scalability, but at some cost to decentralization. Is starknet trying on the scalability side to try to balance that, deliver the scalability without such a centralizing trade off.

B (29:41)

Yeah, so that's exactly where Starknet stands out. We are, I think, the only L2 out there that is truly committed, not just in tweets, but in putting a lot of resources and making progress on decentralizing its layer of you know, sequencers, validators. We already have staking Both for the StarkNet token strk and also for Bitcoin live. So people can now generate about, I don't know, just short of 3% of yield on staked bitcoin to operate the network and about like 9% on staking strk token and operating the network. More, more importantly, here's something that I'm really excited about that we're going to unleash and be the first to do so. And I think it's going to have a huge impact. It will be the next thing for blockchain and I call it ZK threads or multi threading. Right now all of the blockchains are basically single threaded, right? They you have like one, you know, the validators all have to go through all of the transactions one by one. And if I want to affect the state, let's say of Ethereum or Bitcoin or Solana, I have to submit something to this mempool that everyone operates. Okay, but you know, you and so it's a little bit like in the old days, like these single threaded machines, you know, you had to, you wanted to do text editing and then play a game.

A (31:07)

You had to be linear. Right.

B (31:09)

You mentioned the, you know, early gaming consoles.

A (31:11)

Yeah.

B (31:12)

Take one cartridge out, put something else. Same thing with the early day PCs, but today it's very multi threaded. Like you and I can edit at the same time, Google Doc and you know, at the same time each one of our laptops will be running hundreds of other threads. Right. And they all involve and impact the same state. Now the same thing. If you think about the economy, right? The economy is multi threaded. There are multiple different markets that are operating and from time to time settle. And the state of the economy is sort of settled at some frequency, but you don't have it being like everyone, you know, first there's a transaction on nasdaq, now something in the Chicago Exchange and you know, they all go one by one. Okay, but blockchain is like that. So on starknet we're going to very soon have the ability of anyone from their basement, right, running a sequencer and then coming back to Starknet and saying, hey, here's a ZK Stark proof that I ran starknet. Please update now the state of starknet from A to B and I'm not going to even show you the transactions. So we'll have this ability for you and I to run multiple threads. This helps with privacy immensely. It helps with scale and it helps with completely new Things that just cannot be done today.

A (32:32)

Is that a solution to decentralized sequencing?

B (32:35)

Basically, it's a new phase in decentralization. It goes beyond decentralized sequencing, because in decentralized sequencing, you know, think about bitcoin mining. We're all competing, but nevertheless, everyone needs to see, you know, these blocks here. It's something where you will never see what caused this change because I ran it on my thread and you will run some other thread, but nevertheless, the state of starknet will reflect all of these different changes.

A (33:00)

Oh, interesting. Yes. Only not every participant. They won't even know, but they also wouldn't have to know. So I can update just one piece of the state because of a proof I deliver. And you'll accept that as the current state?

B (33:14)

Starknet will accept that.

A (33:15)

Starknet will. But other validators and other people submitting these will also accept it because it's proven. But they don't know what it is and they don't care. They don't need to care.

B (33:25)

Here's another way to think about it and why I'm really excited. You see, the huge steps that blockchain takes is usually by democratizing something that has been pretty centralized or had high barriers of entry. So think about sequencing or creating a new block. If you want to create a new block in bitcoin today, you got to go buy a lot of electricity, put a lot of hardware. If you want to sequence a new block in Solana or in Ethereum, you have to put up a lot of stake and be rich in that block token. Okay, you can submit a transaction, but that, that isn't costly, that's whatever, 5 cents or something. But if you want to sequence a block, that's serious money. Okay, what if anyone, for the cost of submitting a transaction for these $0.05 could now say, here's a whole block and you don't even see that block. That is what multi threading gives you. It gives you democratization of this very profitable, very important thing. That is.

A (34:24)

That's very interesting. Yes. So you democratize block building in this way. That is very interesting. That's been a struggle for a lot of blockchains, right? I mean this is a big question too about. It's also led to the destruction of mempools as well, the inability to democratize block building. That's very interesting.

B (34:43)

So it gives you scale, it gives you privacy, it gives you democratization of this very profitable economic activity, which is sequencing. And it gives you much more control because you could have like a prediction market like Think about Polymarket. You know, suppose Nvidia would like to have its quarterly earnings prediction market for that. Well, what if it could take the code of Polymarket but run a thread where it controls and sees and has control over that particular prediction market. But it's all of the logic of Polymarket. What if you could have, you know, AVE lending a pool that you are running, but it has all of the logic of ave, but you're running it on the side.

A (35:23)

Very interesting that I can see how that is a big innovation. Lots you mentioned before, like post quantum ZK Stark.

B (35:33)

Let's.

A (35:33)

Can I ask you about quantum.

B (35:34)

Yes.

A (35:35)

You are a cryptographer who knows probably a lot more about it than I do. Of course I'm interested specifically in cryptographically relevant quantum computing. There's been a lot of discussion, I think rightly, about whether quantum threatens crypto. It obviously threatens, theoretically if there is cryptographically relevant quantum computing, cryptography and all facets of the economy and markets. But we work on blockchains. So people always, I don't buy this like whataboutism argument, like why we don't have to worry about it on Bitcoin because the nuclear launch codes are at risk. And I'm like, well, they've got people working on that though. We're the people that work in blockchain that have to work on it for us. How would you view the state of quantum resistant blockchain research?

B (36:22)

I'm very worried. I'll tell you one thing I'm not worried about. I don't know whether a quantum computer will break cryptography. I do know this. It will not break ZK Starks. So ZK Starks are post quantum secure and which means, you know, starkit, Starknet is post quantum secure and we have the tools to make Bitcoin post quantum secure. If Bitcoin is willing to, you know.

A (36:45)

Upgrade.

B (36:46)

Upgrade. Exactly. So the reason I'm worried is exactly because this, you know, I heard Michael Saylor saying, no, it's not a big deal. You know, Y2K is not a big. It wasn't a big deal because they figured it out. Right, but. Exactly. But who's they like, Michael, it's you. Like you should, you should be advocating for us fixing the. The reason, you know, Y2K wasn't a problem for Microsoft was because Bill Gates said, guys, you know, let's fix it. And they put a lot of resources. It was billions of dollars of developers working on it for many years. And that's why it wasn't a problem. So, Michael Saylor, I expect you to say it's not going to be a problem. Here's why. I am supporting and putting people to work on it if it's ever needed. And I would like to hear that from more people. So I am very worried that Michael Saylor and others are not saying that other part.

A (37:34)

Yeah, that there's a complacency. That's. Yes, because I did ask him that question and my takeaway from him was sort of he's not worried about it because surely it will get fixed. And you're saying you need to fix

B (37:45)

it, Michael, you do not need to fix it yourself by writing the code, but you need to be saying, you know, putting resources on it, supporting these things. And you know, I'm a big supporter of opcad, of soft forks for CSV, csfh. I'm really worried, like, guys, if we cannot have the nine lines of code that's opcat that Satoshi was supportive of and everything will be ossifying, like, how do you want.

A (38:11)

You assume this will be a much bigger.

B (38:13)

Of course. Yeah, I know it will be much bigger. And we have a lot of people on my team working on it on bip360 and so on. And we're doing a lot of. To prepare for Quantum and we want to offer this to Bitcoin. But I'm really worried about Bitcoin readiness.

A (38:31)

I did go to. Right. It's more of a question of urgency. So you said, though, you didn't know if Quantum will threaten cryptography, but you do know ZK Starks are the solution. Is it like therefore a tail risk? That the way you think about it, like, surely if there's even a remote likelihood that they could break, say a Bitcoin ECDSA or elliptic curve cryptography, therefore we should be preparing for it. Is that how you think of it? It's not inevitable that it.

B (39:03)

I just read yesterday that I forgot some big financial advisor said, I'm now removing my Bitcoin allocation.

A (39:09)

Yeah, Jefferies.

B (39:10)

Okay, good. So like this, I predicted this will happen. It will happen more because of the complacency and people like Saylor irresponsibly saying, ah, it's not a problem, not going to be a problem, we'll just go away. But not doing the other part of saying it's not going to be a problem because I will put resources, I will support softworks. I am for this. You know, you will see more of these people out there saying, you know, I'm worried about Bitcoin I'll move it elsewhere and that is not good.

A (39:35)

Are you see other networks be more proactive in this way than Bitcoin?

B (39:39)

Starknet is very, very practical.

A (39:41)

Right. But like Ethereum or Solana as well because I feel like I haven't seen that much either. I think there is.

B (39:48)

I want to see more.

A (39:48)

Yeah, look,

B (39:51)

the thing I know most about is starknet. We will be ready. We're doing, we're taking these. We took cryptography very seriously. We are always on the cutting edge of this stuff. Starknet will be ready for not just. Sorry. Because we're already a layer connected to Bitcoin, Ethereum, Solana and we have scale that is way higher than all of them combined. We will be ready. Starknet will be ready for this stuff. Because this is in my control, under my control. I am worried about this. We will get this shit done. I would love to offer such support to Bitcoin, to Ethereum, to Solana, to anyone, to zcash, but there, you know, I can't control that. Yeah, we need some, someone on the other side to say, oh, this is the future, we want this.

A (40:36)

Yeah. I mean my unintelligent view though has. I went to a meeting at Presidio Bitcoin which is at the Presidio in San Francisco in July. I think that was all about Quantum. It was well attended by prominent bitcoin developers. It seemed that people are working on it and thinking about it. Some progress has been made, I guess is my point in taking it seriously now.

B (41:01)

People have been talking about OPCAT for 10 years. We have not had a soft fork for four years and none of them are in sight. It's very depressing. I'm very worried. Yeah, sure. Someone is working on bip360. I mean again, I have team members that are working on bip 360. That's not what I'm worried about. I'm worried about the consensus and I'm worried about people like leaders of this area like Michael Saylor and others not coming out and saying we should be worried, we should be practicing. We should be strengthening our muscles around soft forks in order to be ready for this stuff. That's what get me worried. Technologically, it's very easy to implement. I see the changes.

A (41:41)

Yeah, it's not the change. Solutions won't be created and proposed.

B (41:45)

It's the consensus protocol. To me it's like completely broken. It's very depressing. I'm very worried. And the only way to fix it is to say that, you know, to have some sort of an alarmist. The reason why 2k wasn't a problem was because everyone was freaked out by it in a positive way and did a lot of stuff in order to prepare, this is what I'm saying to starknet. So starknet, we are worried about it. We are fixing things. We're preparing not just for us, but also for Bitcoin, for Ethereum, for zcash, in order to be prepared for this. And that's why I'm not worried about starknet, but I am worried about these other networks.

A (42:17)

You don't see sufficient urgency?

B (42:19)

I need to see, I need to see very high urgency. And people like saying, again, Saylor, saying, you know, a different thing. Yeah, saying I have people working on it. That's what he needs and he needs to allocate resources. Right.

A (42:31)

Again, also on if it's a problem, how soon do you think it is a problem? Just with your smart guy.

B (42:38)

You mentioned the Jefferies guy. It's now a problem. Because if the Jefferies, you know, highly revered investors said this two days ago, that's, that's a problem for the market.

A (42:48)

But when, when, if, if we're going to get a cryptographically relevant quantum computing that is a threat, is it a, but you know, Is it a five year problem? Is it a 20 year problem? No one. I mean, I don't know. I'm not a quantum researcher, so I don't know.

B (42:59)

Okay. We now have our, as part of our preparation, we now have our, on our scientific board, Professor Scott Aronson, who's one of the most quoted and you know, revered theoretical computer scientists, experts on, on quantum. And you know, he talks a lot about like. So he's now saying, I think the quote was, and he said this a few months ago. And this raised the level of alarm on my side, which is why I hired him as an advisor for us, for this thing, to work with us on it. He said that I would not rule out that before the next election there'll be some announcement of a cryptographically relevant quantum computing device. And he's a bigger expert than me.

A (43:45)

So that's the, he's talking about the presidential election. So like 2028.

B (43:48)

Yeah.

A (43:48)

That's two years from now.

B (43:50)

Yeah.

A (43:50)

Wow. So now it could be that urgent.

B (43:54)

It could be that urgent. But it is already this urgent. Because if a very important investor from Jefferies is saying this, others will say the same thing. And you will see this effect, unfortunately, you will see this affecting the price of Bitcoin. And this is Something that is very important and. Yeah.

A (44:11)

Well, I'm happy you shared your views on this, because I think it is. The temperature is raising. You argue it needs to be raised higher. I think there's.

B (44:19)

And it needs to. It's a fair push consensus in the community of this decentralized thing called Bitcoin towards being more proactive in adopting changes

A (44:30)

to the consensus layer before we wrapworks. In particular, I think it is a good point looking at the intransigence of bitcoin upgrading as a red flag for. And I agree, I think there are a lot of bitcoiners who say we're skeptical it's that big of an issue. But surely if it is an issue, it will get solved and you're putting your money where your mouth is on trying to solve it, which I respect a lot. I don't want to end on this doom and gloom of what gets you really excited for starknet or for blockchains in general. Like, I mean, we've already talked about multi threading, which I think is very interesting.

B (45:06)

Yeah.

A (45:06)

And privacy as well. Is there something else that you're following that gets you excited or that you want to talk about?

B (45:13)

Well, first of all, I'm very excited about what's going on in starknet, which is that we have one of the highest, you know, on all metrics. Almost all metrics. One metric that is not reflecting this yet is the price of the STRK token. But I'm not going to comment. I never comment on token prices. But if you look at TVL value locked in defi in generally the amount of bitcoin, the amount of activity, the size of the ecosystem, the novelty of the applications, it is going places. Okay. That gets me extremely excited. So I'm excited very much about the potential this year of Mindshare, flipping around starknet in particular. And as I said, I'm extremely excited about this democratization of block production that we're working on. Those are the two things that get me extremely excited about.

A (46:13)

Very cool. Well, Ellie, Ben Sasson, co founder, CEO of starkware, co founder of zcash, thank you so much for coming on Galaxy Brains.

B (46:20)

Thank you, Alex.

A (46:21)

That's it for this week's episode of Galaxy Brains. Thank you to our guest, Ellie, Ben Sasson, co founder, CEO of starkware and our friend Bimnet of BB from Galaxy Trading. Everyone have a safe and happy weekend and we will see you next week. Thank you for listening Galaxy Brains, the weekly podcast from Galaxy Research. I'm Alex Thorne, head of Firmwide Research at Galaxy Follow me on X at Intangible Coins. Follow Galaxy Research on X at GLXY Research. Read our written reports at galaxy. Com Research. And don't forget if you like Galaxy Brains to like and subscribe on your favorite podcast platforms like YouTube, Spotify, Apple Podcasts and more. We'll see you next time.