Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - 2025 Rewind: End of the Infinite Money Glitch and Looking Ahead to 2026

Episode Date: December 31, 2025

In this episode, hosts Sebastien Couture, Brian Crain, and Friederike Ernst gather for their annual wrap-up to discuss the end of the "infinite money glitch": the era where tokens traded at billions without proven product-market fit. They explore the 2025 "spring cleaning" that devastated the altcoin market and the quiet, efficient entry of web2 incumbents like Revolut and Stripe. The discussion centers on the industry's maturation into a space where protocols are finally judged on their ability to generate real revenue and growth.The team analyzes the 2025 "spring cleaning" of altcoins alongside Polymarket’s mainstream breakout. As giants like Stripe and Revolut scale crypto integrations, the hosts debate if consolidating distribution power is diluting the original promise of decentralized agency. Finally, they address the existential quantum threat to Bitcoin and share their 2026 "hot takes.Topics00:00 Intro & Notable Memories 04:30 The Bybit Hack & Price Action 08:15 Polymarket & The Mainstream Breakout 12:00 The Altcoin "Spring Cleaning" 18:45 Axelar & The Circle Acquisition 25:30 Incumbents: Back-end Upgrades vs. Values33:15 Social Media & The Economics of Attention 42:00 Staking Consolidation & Distribution Power 50:30 The Quantum Threat to Bitcoin 58:45 2026 Predictions: RWAs & PerpsLinks Sebastien on X: https://x.com/seb3point0 Brian on X: https://x.com/crainbf Friederike on X: https://x.com/tw_tter Gnosis: https://gnosis.io/Sponsors: Gnosis: Gnosis has been building core decentralized infrastructure for the Ethereum ecosystem since 2015. With the launch of Gnosis Pay last year, we introduced the world's first Decentralized Payment Network. Start leveraging its power today at http://gnosis.io

The year is coming to an end. 2025 has been an interesting year, at least for the industry. Also, for us personally, lots has happened. What's your notable memories that sort of stuck out? I think so many things that, like, worked in the past are failing now, and it's totally changing. You know, Bitcoin really is a sort of viable alternative to fiat currencies today. Right.

So as this, like, macro hedge, P2P decentralized, like asset, like, it's really successful. like on a massive way. Now, if you look at how banks kind of use the Web 3 stack, it's kind of as a backhand upgrade, right? Kind of like it doesn't change the status quo in terms of distribution, ownership and agency at all. I think that it's entirely possible, though, that even self-custody in the coming years becomes less and less viable due to regulatory constraints. Welcome to Epicenter, the show which talks about the technologies project I'm Ski-Pold Driving Decentralization in the blockchain revolution. I'm Sebastian Kutu, and I'm here today with my co-host,

Haleke Ernst and Brian Crane. So this is our annual, yearly wrap-up for the year, which has been, I guess, pretty consistent over the last three years. I don't think we've actually missed any of these recently. But yeah, we're going to be chatting about what's happened over the last years, with notable moments. notable moments for us, but also for the industry, and sharing our haunt takes for 2026 and where the industry might be heading. Hey guys, how are you doing?

I'm good. So, yeah, the year is coming to an end. 2025 has been an interesting year, at least, you know, for the industry. Also, you know, for us personally, there's lots of, lots has happened. But maybe before we get started, what's your, perhaps it would be interesting for us to eat. share notable memories or notable moments that sort of stuck out this year. This episode is brought you by NOSIS, building the open internet one block at a time. NOSIS was founded in 2015 and it's grown from one of Ethereum's earliest projects

into a powerful ecosystem for open user-owned finance. NOSIS is also the team behind products that had become core to my business and that are so many others like SAFE and CowSwap. At the center is NOSIS chain. It's a low fee layer one with zero downtime in seven years and is secured by over 300,000 validators. It's the foundation for real-world financial applications like NOSIS pay and Circles. All this is governed by NOSISDAO, a community-run organization where anyone with a GNO token can vote on updates, fund new projects, and even run a validator from home.

So if you're building in Web3 or you're just curious about what financial freedom can look like, Start exploring at nosis.io. Flake, do you want to start? There were so many things, right? So kind of I actually wrote the hour end of the year's slack post to our to our nosis fogs this morning. So kind of I kind of, I mentally revisited the entire year and there was so much, kind of like starting with the buy bid hack.

Then kind of, we had kind of crazy. price action over the summer, then Polymarket kind of completely exploded into the mainstream. And then kind of we went out on the balance hack in November. They're kind of, to me, the thing that stood out most was how much incumbents are actually pressing into the space and how much we are at risk of losing our values or kind of like what most of us kind of got into this space. for originally. But I'm sure we'll touch upon that in the episode.

I think those are all great points. Brian, what do you think? Yeah, I agree. I think just overall, it's been a weird year. We've had times of, especially for Bitcoin, right, where it's kind of just stuck euphoria, it's going mainstream, new all-time high. So I feel like everyone was expecting, okay, this is, you know, this is the beginning of some other epic run. and everything is set up.

And I remember being at the maybe Salini Summit in the summer. And, you know, people were like, ah, you know, it's definitely like, you know, 160K, 200K, end of the year. And then it didn't happen, right? And at the same time, of course, you know, Bitcoin, you know, gets down a bit, I think, over the year. But I think what has been just brutal and sort of devastating for, I think a huge part of crypto has been the entire like altcoin market.

And I think so many things that like worked in the past are failing now. And it's totally changing. People are kind of maybe still doing some of the things they used to do and they used to work really well. Now it's not working and they're like, debit, what are we doing? I mean, at course, one, for example, one way we've also, you know, sort of seen that. You've just been shutting down a lot of networks, right? So a lot of networks that we've been running for years and, you know, running early on and just not really working anymore, right? They don't generate any revenue.

Just the prices are going down and down. Activity is not there. Like, you realize that, you know, in the past, they seem to be all abundant, right? There was a lot of tokens and, you know, for the team and for AirDrop and for values and for staking and, you know, for decentralization. and like to pay, you know, and now it's just like, let's forget about all of that, right? Let's just try to survive somehow.

So I think that's probably going to continue, right? I think a lot of projects and, you know, and I think this is both applies to companies, but also to protocols and tokens, you know, just on a downward trajectory, right? And that becomes very hard to reverse. and so I think we're going to see a tremendous, you know, I don't know, you know, on the positive side, you can say, like, hey, it's just like spring cleaning and, like, things are going to go away. And obviously, some things will survive and some things will do very well.

But it's also, it's going to be very brutal for a lot of people. And yeah, and I think that's been going on this year. And I think it will keep going on next year, even if Bitcoin may do, like, may do very well. And maybe some other things may do very well. You know, I think on some of macro level, I'm like reasonably bullish. But I think that kind of, yeah, spring fire is going to happen and it's happening. And I feel it's also, you know, I remember like many years ago, I used to look at my like crypto investment portfolio. And it was like 80% hit rate or something like that, like absurd, right?

Like almost everything I invested in was like up a lot. Like this is, you know, now is completely different. Now it's like it all it starts to look much more like a sort of normal venture startup, you know, like web two investment thing where like, okay, you know, you invest in 20 things and you know, 12 of them fail completely and, you know, five of them kind of survive and, you know, hopefully you have like two, one or two, maybe three that are actually doing well. For some reason, like having a token early on liquidity, it gave people the illusion that things were working. And they kind of were working maybe from an investment perspective if he's olderly.

But then in the end, actually, the failure rate might be even higher, right? Or probably it's going to be even higher in crypto than in like V-2. And I think that's all coming down now. But do you think the anomaly is kind of this period that just started? Or do you think the anomaly was before? Because kind of if you kind of look at things that flew in crypto over the years, there were a lot of things that didn't really have a clear business proposition, right? Where kind of like even if you kind of look at how tokens were designed,

typically they were designed to kind of evade regulatory capture. So that kind of like it was clear kind of front and center. This is a governance token only it gives you no ownership. It gives you no right to kind of profits and so on. And still they trade it at billions. So kind of I would kind of make the case. Because everyone assumed that was just a temporary pretense, right? Then then actually protocol is going to keep up the revenues and then, you know,

you do buy back and burn or some sort of dividend or something, right? I understand that that was kind of part of part of the lure and the promise that was kind of between the lines. If you look at the crazy valuations that some of these had even before kind of they had proven product market fit. Do you kind of I would have made the case that that was. was the anomaly, not what we're seeing now. Kind of now, kind of products kind of have to work as regular startups would without an infinite amount of money. I would argue that previously we kind of had the infinite money glitch.

Yeah, sure, but like that, that, I mean, you say anomaly, but that was really the reality, right, in crypto for like 10 years, right? So I think in the crypto history, it was more like the way it was. And I think to some extent, you know, I feel like, we're probably overshooting a bit on the side of, you know, where's revenues and like everything is crap. And I think there's going to be some reversion there. But yeah, I think it's just very different. Brian, what you're saying really resonates with me. I was listening to an episode of the roll-up just recently and the firmware ventures guys were on there. And what they were saying, I think,

is kind of resonates with that. And what I've been hearing throughout the year is that we're moving into a space now where previously you could invest in crypto and, you could invest in crypto and the kind of Ponziomics or the Ponzi metrics were what people were looking for. And certainly that provided a lot of, that created a lot of returns for investors and for users and retail and people got phenomenally rich. Now we're sort of moving into the space where crypto protocols are going to be judged on their ability to generate revenue, have actual earnings and growth and, you know, sort of real world metrics.

And I think it's sort of a sign of an industry maturing into something that looks more like a traditional, you know, FinTech or any sort of like tech vertical where businesses that make money are successful, return revenue to investors and dividends, and the, uh, so of exuberance that we've seen over the last 10 years in crypto is probably or most likely sort of coming to an ender's, at least a slow decline. So for me this year, like the year started with exuberance and it's kind of ending with consolidation. Um, in the beginning of the year, we had the run up to the Trump election, Trump getting into office with meme coins and just like insane things

that we had never seen before, like, you know, world leaders launching their own meme coins and, you know, getting phenomenally rich and more even more rich from what is most likely, you know, fraud and corruption to the end of the year where, as you mentioned, Brian, like a lot of the liquidity that was in alt, uh, D5 protocols is exiting. the market or consolidating into consolidating into assets like Bitcoin and gold. You know, as you mentioned, like L-1s have performed very poorly. So like there's been so many big L-1s that came out this year that were like people

were expecting would be massive, like Barrechain and Babylon and Monat. I mean like, you know, if anybody's bid to a barricane party or any sort of like conference organized by some of these protocols, like the promises there were huge, but none of them were able to actually deliver on those at least not looking at, you know, if you're looking at the charts, with maybe the exception of like hyperliquid, which falls in that category of projects that I think have, you know, demonstrable revenue earnings and growth. And yeah, to me, it's just like a sign of the industry maturing. It extends to L2s too, though, right? Kind of like if you look at kind of the huge number of L2s, most of them are pretty dead. I mean, kind of like

they see TVL and trading volume and so on whenever there are liquidity incentives, but kind of as soon as they're gone, things dry up and the mercenary capital migrates elsewhere, right? I mean, I think it implies everything, right? Like, I mean, the token launches, I saw some chart, right, where it was like the token launches this year and it was like the vast majority of them were just like down, right? And I think that's, you know, L1s, L2's D5 protocols. I think it's pretty much across the board. I don't know if there's any, like, category that has really gone the other direction on this.

And then I think what's interesting, I do find maybe one thing that is worth talking about briefly is the Axler Circle Acquisition, because I do think that is kind of an interesting one. The Axler project that is reasonably successful, I think. I'm not super up to date here on the exact details. I mean, I think they're not the number one when it comes to interoperability, right? you have some like player zero and across, I think, that are maybe ahead there, but they're still like known and respected. And even from a market cap perspective, you know, it was like, I don't know, 200 million

FTV is something about that with basically fully liquid. And then, you know, I think Circle basically went and they acquired like the team, right? So I think that's an interesting case, right? because you basically have their, I don't know all the details from speculating a bit, right? But I'm thinking you basically have a situation, right? Where you have this public network

and you have this team. They've been working on this for years. And like, you know, token has been like down mostly for a long time. And probably the upside is just not there anymore. Right? Like the upside is like a ton of work and like very limited upside,

very hard to make work. And then you can be like, or we can just like, you know, sell the circle and there's like direct cash payment to team and, you know, maybe the tokens and the network ends up kind of abandoned. I mean, I know there's some other team that's like supposedly taking it over and whatnot. But I think that's an interesting one, right? Because I think for a long time, people were always valued tokens over equity. Right?

And token was like, the thing was like, well, that's, you know, you much rather go and work for a project that issues a token, you march out the whole tokens, if you, I mean, for a long time, we even had the SAFs, right? You like invest in projects and you just get tokens, right? Now, and then I think that's completely switching as well. Yeah, those token holders, at least in this case, I mean, I would suspect we'll see more kind of deals like this in the coming years. And this is where, you know, possibly having equity as well as tokens is, is the better play if you're investing. One of the things that, as Felica, you had written here in the notes, was, you know,

how we've seen incumbents enter the space and do extremely well. So, like, Revolut and Stripe. And you mentioned at the top of the show that, you know, you were worried that some of our values may be diluted in some of this, in some of these developments. I got to say, like, I use Revolut for, like, my daily banking here. And, you know, the crypto integrations are just, like, absolutely amazing. and when you contrast that to

using like any number of products to get things on and off chain whether there's exchanges or products like minarium, it's just like it just works super well at least in the case of Revolut. You know, I'm sure there's other products out there. As an industry and certainly like as infrastructure, what are the risks here in terms of

this new institutional use of crypto, whether that's by financial institutions, institutions, you know, in the case of like large asset, asset management firms or neobanks, what's the risk here to the values and the ethos of crypto, which is like why we all got into this in the first place? So I think if I were a bank, I would radically switch to blockchain solutions because they're often resilient and much more efficient than kind of what banks currently have. And that kind of, that mostly goes to speak about kind of like the state.

stack that banks currently operate on, right? Kind of like a lot of it is, I mean, it's no one designed it deliberately badly. It's kind of just a stack that's grown over the past 70 years, right? And kind of, kind of doing away with something and kind of re-engineering it, obviously kind of gives you efficiency gains. And I have nothing against that. And if I were a bank, I would do absolutely the same. But kind of the people who got into crypto,

for the values, so kind of the decentralized ownership, the individual agency, and so on. We've kind of seen them kind of struggle for adoption for the past 10 plus years. And it seems now kind of these web two players come in and they are willing to kind of sell out their values for adoption regardless of what that means. So kind of and then kind of if kind of if you look at how banks kind of use the Web 3 stack, it's kind of as a backhand upgrade, right? Kind of like it doesn't change the status quo in terms of distribution, ownership and agency at all.

And kind of to me, one of the hallmarks, one of the core values of crypto that kind of always really appealed to me was this promise that you wouldn't have to perpetually pay rent to the big corporations, but that you could actually own part of Brails. And that seems to have gone out of the window. Even for people who I know used to believe this too. And now it seems a lot of people think the only way to kind of get actual users is by turning your back on that in some sense.

Maybe that's just me. But kind of that's been my sense kind of also with, I mean, we talked about kind of like the demise of many L1 blockchains that didn't stop kind of like. the arcs and tempos and so on of the way from being launched, right? So there's still something there. There's still a promise there. But yeah, that's what I meant earlier.

I feel like I sort of anticipated this happening over the last year or two. Specifically, I feel like with regulatory clarity, you know, in the form of Mika or a genius act or like, you know, any kind of like regulatory framework. It also imposed on protocols a certain number of constraints, specifically in terms of compliance, that would dilute some of those freedoms that we had on chain previously. And I think it's, it kind of feels inevitable. Like in a sense where at some point, you know, when you have an indistributed, it becomes regulated, that wild west.

era that we all were a part of, it kind of comes to an end. And I think one apt analogy is what happened to music sharing, where in the late 90s and early 2000s, you know, we could all download music for free online and there was like a huge marketplace for like downloading and sharing music online. But it totally undermined copyright law and it totally undermined. But are the artists better off now? Right. I mean, they're not necessarily better off. Right. But we did get something in the middle where we got the user experience improvements of having access to music, immediate access to music and like broad music catalogs accessible at any time,

but with some remuneration for artists, right? And I think like I'm not an expert. I don't know, like, to what extent, you know, the long tail of artists before Spotify were better off than they are now. I think there's also just like a lot more artists now that are able to publish music. But there is like some concentrating factor. I think is what you're alluding to where only the top artists make the most money. And I think probably in crypto will have some similar outcome where we benefit from the user experience and kind of like product benefits of blockchain, but probably don't get all of the decentralization and self-sovereignty and all. those things that crypto promised early on.

And the co-ownership, right? Kind of like if you look at kind of, for instance, my co-founder Martin recently went viral on Twitter for something completely crypto-unrelated. It was a picture from the Epstein dumps. He wasn't on it, but Noam Tromsky was on Epstein's private jet. And kind of, yeah, you and 8 million other people saw it. And kind of so Martin, who's always been, so kind of he commented it with, yeah, this hurts a bit. So he kind of, he's always been active on Twitter. He's always kind of had a

decent following and kind of like his, his tweets actually get kind of get seen by, I don't know, 10, 15,000 people on average, but kind of like 8 million. This was kind of, he's, yeah, he's never had this before. And he actually qualified for the, for the, for the influencer program that kind of shares Twitter's revenue with you. Do you know how much you get for a million views on Twitter? $7. It's $7. So kind of, I told him to not spend it all at once.

But it's, yeah, so kind of, and if you kind of look at the flip side, how much Twitter actually makes from this level of attention and kind of the ads, they are capable of of, uh, of, uh, of, uh, of, uh, of, uh, selling because of the user-generated content, kind of this, to me, this kind of screams, I'm ripe for disruption, kind of like I want a social media layer that is owned by the people who actually create the value. I mean, obviously, it's a dubious how much value was actually created by Martin in this instance, but kind of you know what I mean, right?

So, and I think the same is true for Spotify. So kind of you get fractions of a cent for play on Spotify, right? kind of like, I can pull up the numbers, but it's kind of, it's tiny. Most artists get almost nothing from Spotify. So, and then kind of the question is where do the profits go? And is there, and to me, kind of the, the promise of Web 3 was kind of this disintermediation, where kind of you like something online, you click, kind of thumbs up and then kind of like part of the ad revenue that kind of

create, what was created through you looking at things actually accrued to that person, right? But somehow we bypassed this and kind of ended up on kind of shinier extractive rails for the incumbents. Yeah, that's a good point. I feel this was always one of the use cases that that felt is so obvious, right? If you could be like, okay, you can create a social network but then use the tokens to like, you know, really incentivize the key people who are like driving the growth for these platforms.

Like wouldn't that just be like so powerful and like take off? And so yeah, I'm I'm kind of surprised that like no one has made that work because you don't even have to decentralize it, right? You just use the token for incentivization, especially at this point where the regulatory scrutiny has kind of gone away a bit. So then, you know, like, because often we've had that tradeoff, right, that you're like, okay, but if you make it decentralized, the user experience get worse. And now, of course, we have things like, let's say, hyperliquid, right, that are like, you know, kind of centralized kind of nonsense. You know, there's some high middle ground where they actually able to get a user experience

that's, you know, comparable pretty much. So, yeah, I'm surprised that that has not taken off. And I agree, I feel there's still something there. But of course, the challenge is that network of X is so powerful, right? Like to compete with X or, I mean, even LinkedIn, right, it's kind of a terrible product. But it's so ingrained. And, you know, recently I've been like, if I don't use LinkedIn that much, but like sometimes. And I would like search in LinkedIn.

And now it says like, oh, we don't show you any search results anymore because like you out of searches, you need to upgrade. So it's kind of interesting. It really seemed to like, you know. Well, if the search works, I'd be willing to pay for it because Twitter search doesn't work. Like example, I was just searching, I was searching for this post and I typed Martin Copelman.

I couldn't even find Martin's profile. Yeah, I find Twitter search to be like absolutely horrendous. This is a place where really we could use regulation, right? kind of, I mean, you guys know me. But kind of, if you look at the market power that kind of Twitter has, just because kind of like they have the distribution, this is, it's crazy. And in principle, we could totally force them to kind of open source their API

so that other people, other companies could sit on top of this. And for instance, order results differently. for you and kind of as is kind of like you have you have two options one being kind of see all the TikTok like videos you can't you you can't really watch but you also can't look away from on the on the on the for you page and then the following one and where where you see every little update from everyone that kind of I mean there should be some sort of curation there should be some sort of way of kind of letting you choose how to curate. rate these results. And in principle, I think regulatory bodies could force social networks

to open source these APIs so that other people could sit on top of them. But somehow, this is something that's not done, right? Yeah. So Brian, back in, back in, I think it was, April when we were in Dubai for for staking summit. We did an episode with with Mirko and Toby. And we talked about the staking ecosystem. And I thought one of the interesting things there was, you know, discussing how staking was consolidating on practically all metrics. So I wonder, you know, like several months away from,

from that, if you think that that has actually materialized and if that consolidation in this sticking ecosystem is actually happening. So I think it is happening, but I think it's probably still somewhere on the road, right? I mean, I think it still has a long way to go. But, you know, I think at the core, what is going on? First of all, you know, I think distribution is just crucial, right? Like if you own the distribution, then you have kind of like so much leverage. And when it comes to the revenues that like staking generate, those will just really accrue

to those who own the distribution. So what is that that's like, you know, companies like Coinbase, right, or Revolut or maybe ETF issuers or centralized exchanges, you know, I mean, potentially some wallets, right? But basically, you know, the bigger you are, the more distribution you have, like, the better you can monetize this. And if you don't have the distribution, then you are going to have to basically sell or be a service provider to those who do have the distribution. And then you're going to be competing with, you know, 10 others that are also trying to sell to those. And then you just don't have a ton of leverage, right? So the price, you're going to be, you know, you have not a lot of pricing power.

So I think that is something that certainly applies to. But I think it applies to probably quite a lot of other areas as well in crypto. And yeah, so I do think that, you know, what we see today, I don't know what the answer for this is. But like what if you take all of the profits that are being generated in crypto, how much of that accrues to centralized exchanges is going to be very large, I think. Of that, how much accrues to Binance is so large. Like I would not be surprised. Or, I mean, I might guess would be that probably more than half of like all of the profits in crypto are like finance, you know. I mean, of course there's this, well, there's different.

There's also the profits from like, you know, coin appreciation, right? Like, so those, if we exclude that, I mean, I think it's going to be a gigantic percentage, right? It's going to be some of those centralized players. And so I think that's just a way, I think it's going to be a strong. consolidation, right, where a lot of it is going to go there. Of course, you have some new players there, you know, the Robin Hoods, the Revolutions, and they have a tremendous power as well. So I think you're going to see those integrate as well.

I think what we're also seeing, you know, I did the podcast with Gracie from Bitgett yesterday, a recorded one. And I think what Biggads doing is just, again, very typical for, I think a lot of exchanges are doing that. You know, they're one, they're kind of integrating defy, right? So you kind of say like, okay, look, you have your centralized exchange interface and you know, you can do a lot of things there and including maybe we kind of package some of the, you know, defy access into that as well. So like you never have to leave. I mean, Coinbase did something with Morpher as well, right? So I think that, so that's one thing. And then of course bringing like stocks and

commodities in and be this kind of universal trading platform. And that's super powerful. Right. I think and so I think that kind of consolidation, yeah, it's very, very much happening. And I think it would continue to happen. Are there other parts of the industry that we see consolidating over the next, you know, three to three to five years, possibly venture capital, right? I mean, a lot of the rounds are continued to be sort of taking up by large VC funds. It's becoming harder and harder for smaller funds to raise. There have been fewer fund launches in the last year, I think. I mean, I don't have actual metrics here, but I think I've seen some metrics where, like,

have been like fewer fund raises than in previous years. And certainly, like, VCs are finding harder and harder to raise. You know, this consolidation is happening like across. all verisels of the industry. Yeah. Now, BCs, I don't know. I don't think VC is really like naturally suited for like consolidation. I think there you just have a shrinking of the industry, right?

Like basically it returns on there. So, you know, like what does it mean? I think that they're more established funds, mostly even them, right, raising spoiler fronts. Right. So I think even the very, very big ones, I think have shrunken and then the small ones, a lot of them just cannot raise. Yeah. But I think consolidation will also apply to all.

all of this, you know, data, analytics, block explorers, like all of these kind of services and layers that people, like this whole like middle layer, I think will, well, there will be a lot of consolidation there. I fear you're right. If Web3 in some sense kind of becomes a speculative asset only that's powered by centralized exchanges, what remains? There was a nice article, I think, from Nick Carter recently, where, I, I mean, you know, it was like, how is this crypto thing doing? And, well, first of all, you know, Bitcoin

really is a sort of viable alternative to fiat currencies today, right? So as this like macro hedge, P2P, decentralized, like asset, like it's really succeeding, like on a massive way. Now, okay, maybe we catch on the quantum thing later. So there's some threats. It may end up failing. Like, it's possible, right? It's not guaranteed it's going to win. But today, like, I think they're sort of default. Like, if nothing goes wrong, it is going to be there, right? It's going to be like a major factor in as a macro asset. And that's very powerful, I think.

So there's that. You know, I think we have like stable coins, payments, right? Like, it's great, right? Like, actually has a lot of benefits. You know, I think you have access to financial products, like more financial products, easier, more efficient, right? You may have some kind of back. a back end efficiency gain for like, I mean, you said before, right? If you're a bank,

you build on blockchain, right? Which, you know, I think to some extent is definitely going to happen and happening. So I think there are a lot of real improvements and real value here. You know, maybe some aspects like originally that attracted some of us, like, you know, self-custody, right? And the idea of having like P-to-P, you know, no intermediaries and having peer-to-peer transactions and maybe having privacy, on-chain privacy, like those are all, you know, not doing super hot right now and questionable if they'll end up sort of being delivered at all. But even then, self-costity is an option, right?

Like, you can do it. And a lot of, so that's already powerful. So I think if you zoom out, it doesn't look so bad, even, you know, but of course, training is by far the main use case. And so I think the centralized exchanges just are extremely well positioned there. Entirely possible, though, that even self-custody in the coming years becomes less and less viable due to regulatory constraints. So my fear, like, I think in the next like three to five years is that possibly in Europe,

self-custody becomes mostly untenable due to regulatory constraints, which would prohibit people that have self-custody assets from interacting with any centralized exchanges, or at least being like significantly hindered in doing so. How do you think this would play out? Because kind of, to me, it seems like the genie is out of the bottle and kind of you can't really put it back in. And kind of drafting or trying to enforce regulation that is de facto unenforceable just makes you look bad as a regulator slash an enforcement agency, no?

In the year, we've already, there's already been some. talk about like having a much higher increased scrutiny on self on self custody wallets like on hosted wallets like this is this is this is part of the EU regulatory narrative and I don't think it's impossible for regulation to imp like regulation to impose much higher scrutiny on on self hosted wallets as such as like you know like source of funds like traceability like when those assets were purchased etc and if they're not then it's like nearly impossible or like impossible to interact with any regulated exchange.

But I mean, this is already the case, right? Kind of like if you kind of want to bring funds onto an exchange, they already check kind of what the funds have been through in the past. And I mean, this is, this doesn't really seem to impede usage a lot, no? I mean, it's like an extra, it's like an extra burden on people who have on, you know, quote unquote, unhosted wall. I just think it's not past the EU regulatory apparatus to impose even more stricter constraints on those types of wallets in the future. So let's talk about the quantum threat.

So we recently did this episode on the quantum threat to Bitcoin and also crypto as a whole. And we were discussing before the show that one of the interesting developments in the last, say, like six months is that, you know, before this wasn't discussed at all or it was kind of like dismissed as something that was going to happen so far in the future that we should. I shouldn't actually be worried about it. But now it seems like that conversation is happening in a more serious and significant way. And I know, Brian, you're tracking this pretty closely. What's your, yeah, what the risks are here in particular for Bitcoin? Like, what's the situation look like? And what can me, what do you think is going to happen in the next few years with regards to

quantum and crypto? Yeah. I mean, I have all spent like that much time on it. Actually, John Lillich that we did a podcast with, has I spoke with him at EFCC in some length about it. And he's like super focused on that. And then, you know, I was talking to him and it was like, hmm. And so I spent a bit of time on it.

I mean, I think for anyone who is interested in it, I think Nick Carter wrote a really great article very recently about the risk for Bitcoin. So I recommend checking that out. But on a high level, right, what's the issue, right? It's a simple issue, right? Like, basically in Bitcoin or in crypto, you basically have a public. key, you have a private key, and then if you want to create a transaction, you sign a message with the private key and someone else can verify that that message was probably written by this

private key, right, or signed by this private key, but there could be other private keys, maybe, that could also sign a message that would sort of verify. It's just that statistically speaking, it's like so implausible that you'll ever find it, that you can basically say that risk is zero. And so then, you know, you kind of as long as you have your private key, you're safe. But I think with quantum, the thing is that what people expect is that they will start to become possible to sort of crack brute force, right? And create a transaction that will spend the coins from some address you have and without having the private key. So then somebody could just steal the Bitcoins. Now, I think there are address types or, you know,

some cryptographic signing types, even supported in Bitcoin, that would not have that vulnerability. So, you know, there's like some upgrade path may be possible, right, where you say, like, hey, let's switch all, it's all switched to that. And then people may have to move over their coins if they're on addresses that are still exposed. But the problem, of course, is, first of all, it's a huge upgrade. And Bitcoin has been extremely resistant to any kind of upgrades. I mean, some people may remember a block size debate, which was a huge debate, took forever, it was extremely hostile. A lot of people left the industry, left with Bitcoin even as a part of it, you know, to basically increase the block size from one to two megabytes, which was a very, very minor change,

as about as minor as you can think of a change. And, but the other thing is, what do you do with, like, let's say, Satoshi's coins, right? Because if somebody now steals, even if you, you know, maybe, Sebastian moves to a quantum safe address. You know, if someone now steals, I think the estimate's like 1.7 million Bitcoin, they're kind of like lost or like haven't moved forever. So someone steals that and then dumps it all. That's like, you know, it's super massive disaster.

Totally wipe out the Bitcoin price and maybe not go to zero, but go like, you know, I don't know how low it would go. It would go very, very low probably. Yeah, it's a big threat in sort of the traditional. world. People are very aware of that. And there's, you know, I think any bank will have some quantum group that's like preparing for it. And, you know, they will make these migrations and changes. But that's like way easier to do in a centralized system and in decentralized system. In a decentralized system, you know, if you have some governance, if you have some kind of coordination,

then again, it should be possible to make some upgrades. Now, still probably harder and still some risks. But of course, Bitcoin is so resistant to any kind of change and really has no governance process, it's going to be way harder for Bitcoin than even Ethereum, for example, right? Ethereum is going to have an easier time adapting to that than Bitcoin. So it's a very big threat. And it's interesting that's now kind of, now, of course, the big question is a timeline here. How long is it going to take? Hard to know. I think the median estimate is something like early, you know, maybe 10 years from now. But first of all, making these. changes and upgrades to Bitcoin is also probably going to take many years. And second of all,

you may have some breakthroughs and it could come much earlier. And you also have an incentive if you are now developing the latest quantum computer. You may want to keep that a secret, right? And only so when you're there, then you announce it and then you have a huge head start. So yeah, there's a lot of risks there. And when it comes, you know, it's maybe too late. So it's a, it's a very hard problem, I think, for Bitcoin to tackle. And I think it's a problem for, I mean, I remember talking with John and he was also way unhappy with Ethereum. And, you know, I think he also fought Solana was making mistakes that would make it hard afterwards to adapt. So I think he does think the problems, and I'm not as familiar with the details here, but that, you know, there's real problems for

other blockchains as well. But I think Bitcoin, by far has the biggest problem here. Yeah, one of the things I thought interesting about, yeah, that's a great, great recap. But one of the things I thought was interesting about Nick's article is the Bitcoin community essentially has a choice to make, which is essentially, you know, make the upgrade that would render Satoshi's coins unspendable, you know, and therefore threaten the neutrality of Bitcoin and tank the price. Or do nothing and wait for the quantum threat to come, you know, Satoshi's coins get, the private keys get deciphered and those coins are sold and that tanks the price. So they're sort of stuck between a rock and a heart. I mean, I think if you ask me, you know, what would be the best thing is like you take the, you basically give some timeline of, I don't know, two years. You say, okay, in these two years you have to move to some address that's like, you know,

quantum resistant, anything that does not move. Basically goes into like a security budget and now Bitcoin has like, you know, 2% annual like inflation for the next. I mean, many, many years, right? Or like you could basically the whole thing of like the security and the block rewards like dropping off so much you can kind of undo that

which I think, you know, that's another very popular matter. Yeah, exactly. So kind of I think this is something that might fly in the Ethereum space kind of like the worst I could kind of the furthest I can kind of see this happen in the Bitcoin space is that people kind of say,

okay, whoever doesn't move their coins within two years or so, kind of they just get burned or kind of like they no longer get, I mean, but I'm kind of actually kind of putting governance on top of all of this. So kind of like inflation? Yeah, this is like these, you still have the 21 million limit. Right, right, right.

Yeah, but yeah. Is it likely to happen? Like, it's hard to imagine it. right now right now i mean by far the most likely scenario seems to be that nothing happens right that like no real change comes um but then i don't i don't think that's so maybe i'm just kind of like more optimistic than you here so i think kind of like the the the block size was it also ultimately didn't matter that much right kind of like it was was a question about a kind of transaction fees kind of like when it when it came down to it and kind of like whether block still

propagate fast enough and so on. But if there's an existential threat, kind of as, for instance, posed by the quantum collapse, I do actually think that the ecosystem would be rational enough to coordinate around that. And I mean, if you kind of, when it comes down to it, kind of you have governance by by hard folk, right? kind of you could say, okay, look, kind of like we'll hard fork this, and everyone who thinks this is Bitcoin and this is now Bitcoin Classic, and kind of Bitcoin Classic will go to zero eventually. I think they wouldn't sink for dogmatic reasons alone.

I know and like a lot of Bitcoiners, so maybe I'm biased here. I think this scenario they're describing Flakea is probably the most likely scenario where there's part of the Bitcoin ecosystem. that decides to move forward with the solution. And there is one, and like the size of that part of the ecosystem that would fork off to become the classic, right, is questionable. But most likely, like, it would be contentious. Yeah, yeah, it would be pretty much.

Yeah. But the hard forks, right? The last, I mean, there hasn't been a hard fork for like almost ever, right? I think the first one's, the other de-changes well soft forks later. So even that. Those were like. Sure, sure. I mean, some people made hard for made, but they were not Bitcoin, right?

Like, Bitcoin itself has not done that. I mean, I think one of the things we haven't really talked about here is like, you know, the recent kind of narratives around Zcash. And I feel like this is, this is a, it's a great use case for Zcash because Zcash has a lot of the properties of Bitcoin, I think has the respect of a lot of Bitcoiners as a, you know, first primitives, highly decentralized, highly aligned asset that also is private and happens to be quantum resistant as far as I understand. Yeah, for sure.

So everybody just like, it could be. It could be. It could be. Yeah. Just. Yeah. Yeah. Something like Zcash.

Something like Zcash could be very well positioned there. I agree. Or like, of course, Bitcoin, in the end, someone will do the Bitcoin hard fork right to say like okay let's you know freeze the old coins and you know um my great dad but the challenge is just going to be you know you may end up with two or three or different views on it and then you have like different forks and which one has the legitimacy right which one is actually bitcoin right that's the challenge right and especially now you have the bitcoin in etifs and revolution and like a lot of these places that they will have to make the decision for the users

and that have to hold all of it like they're yeah but the one that goes to euro is not bitcoin yeah the one that the revolutions the the revolutions can just decide to like keep all of them and then like they're they're going to get the they're going to get all the assets on ford no no i don't agree with you because like someone comes in and they say like i buy bitcoin right they're going to give them, you know, they're going to have to say this is Bitcoin, right? This is that. Not going to be like, oh, let's in the Bitcoin. Right.

But they can also offer Bitcoin. I mean, of course, they can offer Bitcoin, but they can also offer Bitcoin Classic and whoever wants. I mean, they're going to make money off of this anyway, right? So like, just like exchanges listed Ethereum and Ethereum Classic and continues list Ethereum Classic. But, but yeah, I guess, I guess, I guess what you're saying is, uh, the, the exchanges will have to decide which, which is like the real Bitcoin. I mean, thinking about this throughout the episode, I think my hot take is that despite all of this consolidation and apparent shift away from Ponziomics and the industry moving towards investing and certainly backing projects that demonstrate real world metrics such as revenue and earnings, we are probably going to continue to see rallies, possibly not. of the sort that we've seen up until now,

like the meme porn rally, etc. But like where those rallies will continue to happen on a smaller scale and people will continue to gamble on things like meme coins and other narrative-driven ideas. And, you know, retail investors will continue to get burned on those as they have in the past. I mean, retail investors tend to get burned

whatever they do, right? I'll impersonate Warren Buffett. it here. I think... Can you do his voice? No, unfortunately, I can't, but maybe we can put this in with AI.

I think real world assets are going to be other age. So I think kind of like we now kind of, the one thing that has arguably kind of found real world traction estables, kind of non-speculative real world traction stable. So I think real world assets is

next up. And kind of we see a lot of the infrastructure and And I expect that 2026 would be RWA's all the way. Yeah, I agree. I think perps trading is, it seems like, very powerful. And so I think perps on stocks and perp, I think that thing is going to keep exploding. And I think that's going to be very powerful. It could bring a lot of money in users into crypto.

And so overall, I think 2026 is going to be a better year, right, than 20, I don't think it's going to be some like long bear market from here, but I think it's going to, there's going to be still a lot of struggle for a lot of pockets of crypto. All right. Well, we'll have to see if those predictions pan out. But to all you listening, thanks for tuning in and certainly for tuning in to Epicenter throughout 2025.

And hope you'll stick around for 2026 as the industry continues to evolve in all sorts of interesting ways. And certainly, happy holidays and happy New Year to everyone.