The Wolf Of All Streets - Bitcoin's Real Buyers Haven't Arrived Yet - Adam Back

Episode Date: May 24, 2026

He invented the proof-of-work system that made Bitcoin possible, was one of the last people Satoshi ever contacted, and now runs one of the most important infrastructure companies in the space. Adam Back sits down to explain why we're still in the early innings of institutional adoption, reveals what Blockstream is quietly building to protect Bitcoin from quantum computing, and shares why the recent wave of DeFi hacks and restaking collapses is exactly what the cypherpunks warned about from the beginning. Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode is brought to you by FedEx. These days, the power move isn't having a big metallic credit card to drop on the check at a corporate launch. The real power move is leveling up your business with FedEx intelligence and accessing one of the biggest data networks powered by one of the biggest delivery networks. Level up your business with FedEx, the new power move. Bitcoin went from a cypherpunk. experiment to Wall Street's newest obsession. And now even the OGs are wearing suits. In this fascinating conversation, Adam Back explains why institutional adoption may still be in the early innings. Institutional adoption is still early. The actual allocation to these

model bot photos, I think, is yet to come. So there may be a tail wind ahead of us yet. Why Bitcoin's core value is still widely misunderstood, and why quantum computing could become crypto's next major challenge. When there is a security factor, then things are dealt with in a more pragmatic way. And there aren't that many choices, actually. Back breaks down ETFs, BlackRock allocation, stable coins, self-custody, defy collapses, and why he believes many crypto yield models are fundamentally flawed. In a lot of ways these systems are like fit, right?

There's money printing underneath it all. Like that's, where does the yield from the staking come from? It comes from airdrocks and ICOs and so effectively it's privatized seniorage. He also reveals what Blockstream is building behind the scenes, from next-gen hardware wallets to post-quantum security upgrades designed to protect Bitcoin for decades. Along the way, he shares sharp takes on stinking, re-hypropocation, AI-powered hacks, and why Bitcoin's simplicity may ultimately be its greatest strength. Let's go. You know that Bitcoin's come a long way when you're dressing up now. Yeah.

Last time we talked, we were baseball hats. Now we're guys in suits. Right. I mean, I think it's interesting to see how far Bitcoin has come. I would love to just start at the beginning. I mean, maybe talking about what it was like, how you handicapped the odds that we would actually look like this down the road and where we've landed. Yeah, I mean, Bitcoin came from a guess, well, I mean, early days, a community project with probably a profile of the early. the earliest users were technical guys interested in technology

for a new, right? As the meme goes, we're here for the tech, right? Yeah. Are we still? Well, I mean, I think a lot of people are here to, for the asset class or for the use case, right? The inflation resistant, it's hard asset, censorship resistant, the bearer, unseasibility, all these things.

Yeah, so, see, you know. So seeing it now, obviously, in institutional rappers and somewhat eating the world, do you have any, I'm sure you have two minds? One is the only way that Bitcoin becomes a global reserve currency is it has to go through Wall Street and institutions and through governments. But seeing it actually happen, are there any concerns that you have during the process? Well, no, I mean, I think the way I look at it is it's a form of access, right? So for a lot of people, the way that they interact with investments is through a broker or a financial advisor. And so until Bitcoin was available in the spot ETFs and things like that, it was kind of hard for them to get access to it. And also, there's a question of tax efficiency sometimes, right?

So in some countries, it wasn't possible to put Bitcoin in a tax efficient savings, retirement savings, by and incentive. like that and so the advent of the ETFs and new sits and things like that enables it. So I think it's accessibility and then I think the next stage is, you know, the institutional adoption where professional money managers will put Bitcoin into a mutual fund or a pension fund because for a lot of people, the average person is not self-directed investments. They're not making investment decisions. So maybe the only way that they get access to Bitcoin economically at least is through the institutional adoption in managed assets. And of course, most of the money in the world is

actually professionally managed, right? So that's the way it does. That's interesting because you talk about why people were there in the early days. It certainly wasn't to have Bitcoin as 5% of the portfolio because it improved your sharp ratio, right? So it's kind of interesting to see where, I'm not saying that it's a bad thing, by the way. I think anything that brings people into Bitcoin is great. But I can't imagine that you were thinking about that. Well, I mean, the cyphopunks were generally, what they would call anarcho-capitalists, so radical free market thinkers, right? And so they were actually, you know, not that many people are interested in capital markets who are interested in Bitcoin, but capital markets are a large part of what drives the economy, drives the standard of living, the human progress, development of, you know, the capital formation to produce products and services. So a huge part of the progress of the world, you know, for the last 100 years, 150 years.

So I think for people with that mindset, that Bitcoin does fit into the capital markets and capital markets and companies organized by shares and IPOs and things are useful and positive things in the world. So I think with Bitcoin for a lot of people, it's their first experience investing in shares or in an IPO. So a lot of people will say, pardon the French, you know, anything that's not Bitcoin to check coin, whether that's a dollar or a euro. or an IPO or shares in a company that manufactures something.

But, you know, ultimately the stock market is a big part of the global economy, right? I've got to imagine those people are becoming a bit more few and far between, though. Right? You don't get many new people coming in that think that way. Or it takes a while for them to go down that path. We have the different makeup of investors coming in. A lot of the ETF holders, presumably are people that are reallocating within a share portfolio. So either directly, self-directed or via their advisor on request. And I guess over the midterm, with the model portfolio recommendations from BlackRock, Bank for America, Merrill and Morgan Stanley and so on that,

once that takes action, then they will start to get exposure without self-selecting, just as part of a managed fund, which is, I think, still to come. Do you think that any of these people that come in as investors and just, you know, for the money? Do you think that many of them will find their way to the original ethos of Bitcoin? Yeah, I mean, I think people get interested in Bitcoin for a lot of different reasons. So I think, you know, you've got the technologists, people who stumbled on the crossing, or they walked into a coffee shop, and you've got to pay in Bitcoin, which is gazing in a few places. Or they were debanked, like unrelated to Bitcoin or trying to use something in industry that's great market. like they are poker players and it's you know the poker sites got cut off from other forms of hailing

at the time's right so there's some poker players that came in for that reason but you know for whatever reason they come in or the route they come in through i think bitcoin is you know it's it's uh has its own theme and people will learn about it get fascinated and then they get you know they get down the bitcoin rabbit hole and they really get into you know the bareer nature of it and in some cases, you know, they start for a different avenue, but end up, you know, setting up a hardball wallet. I'm cutting some Bitcoin in it that way as well. Do you find some irony in the fact that stable coins have become so incredibly popular, being that obviously Bitcoin was somewhere created as a hedge against the dollar, and one of the killer use cases of the technology

obviously has been hyper-dollarization. Right. I mean, it's, of course, you know, the stable coins collectively have more dollars than some major currencies. And I meant major countries in terms of foreign cash reserves, right? But now, ironically, the earlier electronic cash systems like digit cash was actually a very private stable coin. So one of the innovations of Bitcoin itself was that it had, you know, what people were trying to work out how to do after digit cash field was how to make it decent, you know, how to make an electronic cash system decentralized. And so there are attempts to figure that

now going back to the mid-90s, including, you know, the proposals like B-Money, Bitcoin, and later how finish up how and finally Bitcoin, which ultimately start using proof of work in the design, maybe not specifically to create a hard money, but because, a peer-to-peer protocol can't open a bank account basically so was a technical solution to that now he was speculating as to people's um motivations for doing that and some of the siphunks were interested in the hard money and gold with the things like that thing's in there but yeah so effectively quite of a reason bitcoin is both the bare electrical of cash and the hard money which makes it more investable and more attractive and got adoption much faster than let's see us within

that digit cash likely would have. If you if if if cryptocurrency started with a private relatively unseasable stable coin it's a different thing right if you can't invest in it an investment is best in speculation is another adoption driving. Let's talk about block street so now in this new world where bitcoin has become institutionalized has become I think universally known, how do you adjust your business and start to create things that exists in that bridge between sort of retail and institutions and as you're building? Because I know that it seems like you've had to shift. Yes, I mean, we're still, you know, accelerating in the consumer space we announced during

the Vegas conference a few weeks ago, the Jade Corps, which is a new entry in the lineup of consumer harbor wallets. And the previous year we announced also at the Vegas Bitcoin Conference, entering kind of enterprise wallet space, so more role-based access control, and entering the technology space for HSMs and the technology that custodians use. So, you know, we're an infrastructure company,

and we're here to provide technology for different entrants, and there are new entrants here. And of course, with the traditional, finance world, typically their interface to assets is through custodians. And so providing ten more than lawship, custodians is a good way to, you know, interact with Bitcoin, with tokenized securities and things like that. In your mind, what is still missing from wallets to keep people from self-custodying? I still think we're at the point where grandma can't necessarily use it to use sort of the

old meme, right? The private keys are complicated or scary and people don't know how to transact. So, you know, what are you building into the future to make those universally usable? Yeah, I mean, just continuing to iterate on usability. The Jade Corps that we released last week is, you know, comes with some encrypted usability, improved user interfaces and support for a companion app from Blockstream, but also, you know, companion apps or whole it's on a mobile and desktop from a number of software vendors. And what else is Blockstream working on? So we've always been quite active in Bitcoin Protocol Space.

So we did a lot of the work on Taproot and Schnorr, quite big in cryptography and security. And so our research team since earlier last year has been working on a post-quantum question. And so we were, you know, well placed to bring out some of the first, concrete proposals of how to do the post-quantum signatures, so in the concrete proposal with shrinks and then shrimps, which brings the size of a signature down to a manageable level where that can be practical, and also in a framework of doing it within tap routes so that you can continue to spend using compact shore signatures today, but you add the option to be able to spend using a post-quantum secure signature

like shrinks in the future if and when the post-quant computers get powerful enough to be a concern. Do you view these as initial proposals for solutions or final proposals for the solution? Do you think that with more time and more information, perhaps the solutions will evolve as well? Well, I do think that there's an interesting situation, which is the, post-quantrum signature research is relatively other stage. And so, you know, there's been a NIST National Institute's Standards of Technology, publishes cryptography standards, or classical cryptography, and after a multi-year design process with submissions from international

cryptographers, they issued a hash-based signature skin called SLH DSA as a NIST standard October 24, so that's relatively recent. But they're also, you know, active research in more compact and flexible signatures. Unfortunately, it's premature, in my view, to, you know, have them be standardized or for Becklen considered using them. So I think what could happen, actually, is that, you know, the advantage of those is they may be more convenient, smaller, faster, more flexible, but they're not ready today. And so I think the convenient thing to do is to have an option to use the shrink signature, you know, once there's agreement about how to do there, you know, today.

And then as the postponum signature research improves in the next five or ten years to have a second possibly better post-conum signature, because we can't really, you know, it's not a conservative thing to do to just wait for that to convince. verge, right? So you may actually end up having, you know, a post-quantum-signure scheme that generally never got used. Right. So it's got to upgrade it before the quantum computers arrived, for example, right? But I think that's fine. It's all about mitigating a long-tail risk. How confident are you that the Bitcoin community can come together to actually find a solution? It's interesting because many will say, but the most powerful thing about Bitcoin is arguably the decentralization. There's no single founder. But when it comes to making a decision on how to deal with something like quantum, it becomes much more difficult

because it's decentralized and there's no single entity that can make that decision. Yeah, I mean, I think that when there are changes that are optional, like they don't impact security, where there are many design choices. So say something like covenants, then the conversation can take a long time because there are multiple competing covenant proposals. they're somewhat similar, the trade-offs are subtle, it's very specialised so not many people understand and can look at the programming differences of them. But, you know, when there is a security factor, then things are dealt with in a more

pragmatic way. And there aren't that many choices, actually, to my mind, because the other signature scheme that was proposed by NIST or that are available are harder to get confident. it's in. So the optimized NIST scheme, so the shrinks is an optimized version of that, but the NIS scheme dates back to a 1979 paker by Leslie Lamport. The same academic researcher had proposed the Baisanderham General's problem with facts. A busy guy, right? Yeah. So anyway, that signature has been around for so long that people had a lot of confidence, a lot of, you know, it's a very safe and simple type of signature.

I think that that is a good conservative choice, and there aren't many other options, really. So it's just around the optimization parameters and to see if there's support for that. But, you know, so far we've put out of paper. Other people have looked at similar things. I think that's the most probable choice. And of course, it takes a few years for Bitcoin to work out the details, you know, for BIPs and things like that. So it's good that we're talking about it now. Yeah.

Interestingly, I mean, I was one of the dismissive of quantum. people years ago. People would talk about it and I would make the flipping jokes about the nuclear codes and the banking system and all those things, which I do think are still true. But it seems like in the last six months, even the people who kind of dismissed it have said it's serious enough that we have to talk about it just in case. And then there's a lot of people who are fully sounding the alarm. Well, I mean, I think it's probably premature to send the alarm because the current crop of hardware, you know, the state of the art is to fractize the number 15 while kind of cheating because there's no error correction. So really, you know,

it's below the power of a calculator from, I don't know, 50 years ago or an abacus or a mechanical calculator even, right? But, you know, there is something most likely there in the physics. It may eventually be possible to make something scalable that does become problematic for cryptography. And so there's those used in live systems. So, I think rather than getting stuck, arguing about the timeline and the rate of progress, the simple thing to do is be ready for it. And then we don't have to hear about quantum advancements in the news of the time. Now, of course, the people doing the research, they have to raise a lot of money to do this kind of fundamental physics research.

That has been going on for 25 years, actually, right, with very slow progress. So it's got to be tough to raise money for that. And some of it's sponsored by very large companies with a research budget. it, but they're also startups and public companies. So I think basically what you're looking at is they found the way to get the most marketing bang for the buck is to add Bitcoin to the conversation and say, well, it could be threatening to Bitcoin. So I think most probably, you know, not this decade, let's say, or maybe not even the

You definitely don't buy into the Google 2029 paper. No, I don't really. But, you know, I think ultimately it doesn't really matter because. You know, people care about the long-tail risk, the fiduciaries, the, you know, the custodians, the ETF operators, they are, you know, professional money managers or asset managers with a fiduciary obligation have to consider the tail risks too, right? And so it's hard to quantify what's the tail-risk, is it a tail-risk? 1%.

There's something that could happen in, you know, in a decade, or is it, 0.1%. they still want to consider it. And so the way to consider it is to have an upgrade path and upgrade, right? What's the worst case scenario? I mean, it's that the tokens become unlocked and sold, right? I mean, that's really the worst case scenario. Well, I mean, yeah. Tocons hacked and put on the market the same time.

I mean, I think some of the thinking about it is a little bit simplistic in the sense that they look at the system, you know, there's the phrase that Bitcoin is anti-fragile, right? And so, but ultimately the anti-fragile, anti-fragility comes from all of the activists and technologies looking at it. So if something, you know, Black Swan, you know, sort of lightning strike, one in a million weird thing happens, you know, they have this kind of game that, well, in the game of chess, the person's just not going to move their piece out of the way. Of course they're going to react, right?

And there are lots of things you can do to react, even if they are reactive. You can generally address things. So now in practice, I think there's probably plenty of time to do something. And, you know, I say we've been working on it for a couple of years now in San of others. So it's not, you know, not that nothing is being done. It's just that it gets a lot more media attention to talk about, you know, long-term research that is basically not. negative news cells, right? So we didn't get much output for saying, oh, we're working on, you know,

here's a massive survey paper that took a six months to write. Nobody noticed, right? Oh, here shrinks. It's a candidate, a few technical people noticed. Yeah. But, you know, a big company said their marketing department got busy with an incremental improvement in an algorithm or in some hardware. And it's all over the news, right?

So that's what you're looking at. I mean, you get a name like Google. you put a year 2029 and all of a sudden it's a huge narrative. I mean, it makes sense. Right. Yeah. Be wild, does AI concern you at all in that arena? Could it accelerate quantum in any way or any other threats to Bitcoin?

Well, I mean, only in a sense of being a kind of new analog of computer-rated design or computer-rated algebra, right? That you can use it to help researchers organize or automate certain lines of query, but I think ultimately doesn't change the fundamentally hard mathematical problems that all of these systems rely on. Outside of Bitcoin, there's been a lot of problems of late. I have. Curious your opinion on all the DeFi hacks and Lazarus groups' activities and the new novel ways that they're finding ways to hack DeFi that are not necessarily even code and smart

contract, but social engineering and utilizing AI. Do any of those attack vectors, it seems like Bitcoin's been predictably immune to most of it. Right. I mean, we never like to say, told you so. But the VM-based smart contracting, I think, is just too complicated to secure. There's a phrase, KIS, keep it simple, stupid, which is, if it's simple and robust and does one thing,

it's much easier to secure something. But if you put a general VM into there, it comes very hard to secure. And that's been the problem over the last decade, really. There's been a kind of ongoing small contract compromise over the years. And I think there the AIs are, you know, helping the attackers because they can more systematically explore the weak points and, you know, help find them.

So, and of course, you know, I mean, people have seen the reports that basically with staking and liquid restaking, there's a lot of contagion between the protocol. So all it takes is one element in that chain to have a problem. Nobody seemed to have seen that until two weeks ago. Yeah. Well, I mean, you know, it's, it is a common pattern in finance that people build up excesses of leverage on what they think is a sure thing. And then you have a long-term capital management event where, you know, something wobbles and a lot of things blah. Yeah.

Yeah. It turns out rehypification is bad. Yeah. Yeah. Well, I mean, in a lot of ways, these systems are like fit, right? there's money printing underneath it all. Like that's, where does the yield trends they can come from? It comes from air drops and ICOs.

And so effectively it's privatized seniorage. You know, so it's sort of, Bitcoin doesn't have that economic effect because it's hard money. The only way to get it is to mine it or buy it, right? So I think that's part of the picture ultimately. Do you think that the world is taking notice and that it will largely funnel back to Bitcoin. I mean, the capital flight from Defi is astounding in this period.

I think a lot's coming back, but... Yeah, well, I mean, I presumably people will want to have some confidence that it's not just going to happen again, right? It is. It is going to happen again, though. There's no way it won't. Yeah, I mean, I don't touch that stuff myself, so I think, you know, the conservative thing to do always is buy Bitcoin and Cold Store it. Oh, you know, go for a reputable custodian or a big ETF, something like that,

under a number of good providers in the market. So, yeah, I mean, it's a speculative type of thing to do, right? To apply that kind of leverage and take stakes in effectively airdrops that are providing a staking yield, right? Yeah. None of it makes much sense to me. And listen, I'm not dismissive of any of it, but it seems like if you're taking yield and taking something out there and more yield, but you take out there and more yield, like that's a tale as old as time. That's literally never ended well at any point in history. It's an intense amount of leverage, which probably hasn't really been quantified and a lot of contagion risk, right? And here we are.

Before I let you go, I think we got two minutes. What are you most excited about right now? Well, I think it's a really good time for Bitcoin, you know, more open for business environment. the kind of retail technology, the hardware wallets, the smartphones, the new layer 2s, and actually some surprising innovation at layer 1. You'll find a surprising ways to squeeze extra interesting things out of layer 1 with BitVM and some of the new things there. And, you know, I think the, of course, the prices recovered a bit over the last month, you know, sits the 60K bottom. The institutional adoption is still early. So, you know, I've felt about 30% of the BlackRock ETF is, by looking at the refilings, seem to be institutional at some level.

Probably some of it basis trading, of course. Yeah. But the actual allocation to these monopotoplet photos, I think, is yet to come. So there may be a tailwind ahead of us yet. I agree. Well, Adam, I don't want to take too much of your time. Thank you so much. It's always really an honor to speak with you.

I think it's speak for you. This podcast is sponsored by Weeks and was recorded live at Consensus 2026. You can find out more about what they have to offer by clicking on the link down below in the description. Thanks to Weeks for sponsoring.