Unchained - How Cory Klippsten Would Decide How to Secure Bitcoin Post-Coldcard

Starting point is 00:00:00 The alternative would be to change the rules of Bitcoin, like your Ethereum or something. Like, that would be the most stupid own goal in the history of Bitcoin to just steal the coins and break the rules of Bitcoin. So dumb. Hi, everyone. Welcome to Unchained. You're no hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this live sheet.

Starting point is 00:00:25 We'll first take a quick word from the sponsors who make this show possible. This episode is brought to you by 1 Inch Aqua, the shared liquidity layer from 1 inch, back multiple liquidity positions with one wallet balance, and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com slash aqua. Today's guest is Corey Clipsden, founder and CEO of Swan. Welcome, Corey. Hi, Laura. Thanks for having me on. Yeah, nice to see you again. Let's start with Bitcoin, a couple of A couple weeks ago we saw that the Bitcoin price shot up after Treasury Secretary Scott Besson

Starting point is 00:01:03 said that the Treasury would aggressively double its long-term government debt buybacks from a max of $2 billion to at least $4 billion per operation. And ever since then, we've seen Bitcoin kind of at this 80K level at sometimes above it, now it's slightly below. There's been comments about how this price move could potentially signal the end of the bear market. There's others who are not convinced. And I'm wondering what your thoughts are on where this market is headed. Yeah, well, first off, I hope we finish with Bitcoin too, because you know, it is my favorite subject. And yeah, it's interesting that you led with that because there have been

Starting point is 00:01:42 a lot of folks proffering other potential catalysts for what kind of kicked this off. But I also marked that Best in Speech as being the thing that did it. It seemed pretty obvious when you kind of looked at the timing of it. And it basically just led straight into a bit of a liquidation cascade for the shorts that got caught off sides. But what's interesting about that move is it was just supported by a lot of spot volume, both in the ETFs and also real on-chain Bitcoin buying at places like Swan and others. And so we basically found ourselves with a rally that went up, you know, 23, 24%, something like that over the course of a week. And as you know, it implanted itself right around 80K. and it didn't involve leverage on the upside.

Starting point is 00:02:27 So there was basically nobody to just kind of crush and easily wash out here. So, yeah, I think stuck the landing is kind of interesting. And it puts this in this place right below the 50-week moving average, which, again, I'm not a numbers astrology guy. And I don't trade. And I don't really recommend that most people who aren't already professional traders before they get into Bitcoin, y'all shouldn't be trading either. But there are a lot of people who do trade.

Starting point is 00:02:54 and they do trade support and resistance lines. And that is one of the indicators that shows up on every professional's trading terminal is the 50-week moving average. So I'm not surprised at all that there's some resistance there. There also happened to be an enormous amount of volume traded in that kind of 80 to 82K range historically, which, again, people pay attention to whether it makes sense or not. A lot of people see that big volume thing, and they assume that it's going to be hard to punch through and so they load up some shorts and that's why it takes a while to punch through later.

Starting point is 00:03:28 What is interesting is there's just almost no historical volume at any, no large amount of historical volume at any level between 8082 and all-time high. There's a little bit around 88. Obviously, 100K is like a psychological number. There's maybe a little bit of memory of the original pump to 108K before the pullback. that was kind of the first bull market peak in 25. And then after that, it's just, you know, 126K. So, you know, I think it is, you know, I'm optimistically hoping that we're in the early green shoots of a bull market.

Starting point is 00:04:04 I think we deserve it. I don't think we got the bull market that we deserved either of the last two times, frankly. And I would love to see Bitcoin just absolutely rip people's faces off and remind everyone that it is the king of the jungle. Well, I did also want to ask because we are seeing that, you know, there's quite a lot of demand for Bitcoin ETFs. There's been about $3 billion in inflows over the past two weeks. And at the same time, it looks like, you know, on-chain indicators are showing movement toward exchanges. So, like, what is that say to you when you see, you know, those segments of the market acting in that way?

Starting point is 00:04:48 That's interesting. So I guess you're saying that some of the crypto. exchanges have sellers that are moving coins on and are going to do something with it or might be preparing to do something with it. Yeah, I don't know. We don't see it. So I don't have any data that shows people moving coins to just sell at Swan. Yeah, I'm not sure if it's like, yeah, it's not as big as the ETF, you know, indicators. In quo. Yeah, that's interesting. I honestly don't have a bunch of an opinion on that. I guess you could see that maybe. You could see that maybe some people, maybe the people that kind of bought the bull market would be looking to peel

Starting point is 00:05:28 some off and, you know, they're getting back to break even or something like that. So I think if you kind of take the, oh, you know, there was another interesting number, which lends a little bit of credence to that 88K volume hump that we'll have to get through at some point. And I think it was that as of a few days ago, the average price that ETF buyers purchased at was 87. So that's kind of interesting too. So it just may be shopping wood in here in the 80s for a little while. I'm not quite in the bull camp where I've seen some people, obviously, only after the price pumped to 80s saying that they thought we'd see an all-time high this year. I'm not in that camp. Yeah, yeah. I probably am not either. Well, so you've been in Bitcoin for at least a few different cycles because I think I've known you since at the very least 2017. So I'm wondering, you had a little video that you made about all the different theories that have come out over the years about how to project Bitcoin's price. And you made some critiques of some of them, including some that were quite popular.

Starting point is 00:06:47 So, you know, after all these cycles, like, how do you think about how do you think about how? to kind of price Bitcoin, how to sort of forecast, you know, where the price is going. Like, do you have certain metrics you track? Like, what's your kind of whole hypothesis around that? Sure. Look, I, at first of all, I want you to know that I've been doing these videos for almost three weeks now, almost every day. So I've known about 18 or 19 of them in the last three weeks. And that was the one that I dressed the best for where I kind of put on my Sunday best. I had a collared shirt. My hair looked relatively kemped.

Starting point is 00:07:22 There was no hat. So thank you for putting that one on your show. That's serious, Corey, right there for a serious subject. But no, I really do. I come at it from a philosophical angle first, which is backed by science and empirical evidence, which is that most people that try to apply too much math and physics to economics get wrecked. And there's usually something hiding in the model like a gremlin that if you know a little bit about statistics, which I happened to, it was a big focus of my undergrad and my graduate studies was stats and probability. And these have been subjects that have been kind of near and dear to me throughout my entire adult life of learning as well, is how do you detect BS?

Starting point is 00:08:09 Or you better understand the math behind BS detection. And it's really easy to pick these things apart. Like, it's almost as easy to pick apart, you know, a stock to flow model and show exactly why it's invalid as it was to, you know, figure out how Do Kwan's whole thing was a Ponzi. Like, it's not that hard to actually do it once you train your attention on it and use the tools. So I guess what I mostly want to get across is this idea that you can predict Bitcoin. price based on historical data is false. What you have is people making best fit lines or curves with whatever equation you want that fairly accurately fits the historical data, meaning that the regression on it, the R squared, would be rather high, like over 95%, over 98%, 0.95,

Starting point is 00:09:12 something like that, and that this somehow means that the price is going to fit some kind of extrapolation from that point, and it's just not true. So that's probably the main message. And, you know, the reason I think it matters is I'm a firm believer in buying what you know. And I think that you should buy things that you actually understand to some degree. And you want to build a mental framework that doesn't include anything false in it. So what you'll tend to see is, you know, a lot of people got wrecked, trading, stock to flow model lines or whatever in the last cycle, like 21, 22, something like that. And, you know, whether the new class of modelers, you know, kind of the male astrology proponents that love their numbers,

Starting point is 00:10:01 you know, whether they believe it or not, and whether they think they're just using it as a professional or not, you know, they're out there pumping these things and in many cases monetizing, based on the pumping of these kind of false gods, these models that have no predictive power. And there's a lot of people looking at them and listening to them and actually trading based on it. And, you know, I just, I tend to think that most people that have a false input into their mental framework tend to have paper hands, meaning that it's like they don't actually have real conviction in what they, what they own. And they tend to, you know, basically just cough up their coins. rather easily. So I just, I'd prefer that people understand the truth of things, understand how

Starting point is 00:10:47 amazing Bitcoin is, you know, understand that it's very likely for lots of different reasons to go up a lot in purchasing power over the long run and not worry too much about these, you know, four-year cycles or stock to flow models that are invalid or power law models that are invalid, et cetera, et cetera, like just buy the coin because it's awesome. There's a fixed supply and over time, 8 billion people are waking up to how awesome it is. That's really all you need as a trading pieces. Okay. Wow. So, okay, so you don't go into anything even more in depth. That's, I mean, that's interesting. We have swan research and we go in depth like crazy. Like, we've run all kinds of analyses. And at the end of the day, like you can, you can do all kinds

Starting point is 00:11:32 of trend lines. You can do all kinds of projection ranges. But at the end of the day, the only thing you know for sure is that your forecasts are going to be wrong. Yeah. So, but essentially it's almost like a real estate pitch. Like there's going to be this amount and like it's, you know, island of Manhattan kind of kind of pitch. Yeah. It's like this is this is a good bet. This is a good bet size according to conviction. And that's different for every single person. So, but I do have some sympathy for people like, you know, and by the way, I'm sure you're. and Temeret Fidelity is a delightful guy. I've never met him, but, you know, there's good people over there. I'm sure he's super bright. And I'm very sympathetic to people that work in Wall Street having to have something to say.

Starting point is 00:12:20 And, you know, so he pumped stock to flow models really hard last cycle. And like, now he's pumping power law models. And that was what spurred me to do the video. It was like, I'm you not, like, you're smart enough for sure. And again, I'm sympathetic that bankers and, frankly, journalist. have to have a narrative to say about thing. Otherwise, there's very little to say or do for the most part. And that's why probably, I think my most popular video the last few weeks was basically

Starting point is 00:12:51 about the five catalysts for the Bitcoin bull market and pointing out we already know what they are. Price happened to pump a few days later, which was hilarious. But the point is, like, we'll backfit the narrative after the price moves. But really what's happened is like sellers are exhausted and people just. you know, think that 60K Bitcoin is reasonable or cheap at some point. And there's nobody selling and then it moves. And then you go back and you're like, oh, well, it was, you know, this thing and that thing and that thing and that thing. And when the price was going down, all of those things

Starting point is 00:13:21 were actually present too. And they weren't catalysts then. So, you know, this is what we know about reading the Wall Street Journal, reading the New York Times. You know, if it's ever something in your domain of, you know, your area of expertise, you kind of know they're bullshitting and just looking for something to say. You know, if you said real estate pitch, if you have friends that work on Wall Street, like we all know they party on Thursday, Friday, and Saturday night and take out clients, and then everybody stays in bed basically Sunday and recovers and reads Barron's cover to cover, and then Monday morning, they come in and they pitch, you know, stories that, and they've kind of come up like two or three stories that the whole desk is going to roll out that week and hit all

Starting point is 00:14:01 their clients with a narrative that sounds truthy or sciencey. But it's like it's a relation to the truth or whether it actually matters is fucking zero. All right. Well, I love what you said right there. It's very funny. But we're going to first, before we go on and talk about some other big news in the Bitcoin world, we're going to take a quick word from the sponsors to make this show possible. $540 million. That's how much concentrated liquidity sat idle in a given week in the first half of this year. About 30% of the Defi TVL, if you're wondering, That's according to Dune Research commissioned by 1-inch.

Starting point is 00:14:40 But there's a solution. One-inch Aqua is the new shared liquidity platform. It lets LPs back multiple positions with the same token balance and keep their tokens in their wallet till a swap comes. Why does that help? Because the LPs don't have to split their tokens across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity.

Starting point is 00:15:02 See how it works at 1.com slash aqua. that providing liquidity carries risk and fees aren't guaranteed. Back to my conversation with Corey. So it's very fun to talk about the Bitcoin price going up, but let's talk about some news that's kind of a bit sadder, but we have to talk about it because it was so big. So earlier this month, the Bitcoin community suffered a massive attack when several thousand cold card wallets had their funds stolen. So I actually was kind of like on vacation during this time, so I didn't follow it

Starting point is 00:15:36 very closely, but I could definitely see there was like so much self-reflection on the timeline because this wallet was actually seen as one of the most secure ones. So I would love to hear kind of like your takeaways from the whole incident. Yeah. So I mean, first of all, awful and feel so much for some of these people. It was over a thousand coins lost, which is tragic. I think the largest that I've seen on the timeline of any one person was unfortunately, a guy who lost 60 coins. The second most I saw, I think, was 17. So, you know, it is the people that have been stacking coins for a long time and, you know, just awful. Also important to keep it in perspective and recognize, like, it is just awful that, you know,

Starting point is 00:16:24 1,500 or 1,500 coins or whatever it was were lost out of self-custody for this one. Something like north of 1.5 million coins have been lost to hacks and frauds at centralized exchange. and, you know, C-Fi lenders. So if you actually add up Gox and Celsius and BlockFi and Voyager and Onet Quadriga and all the rest, it's over 1.5 million coins that have been lost. So it's 1,000x, the number lost to these trusted third parties versus what was lost in this cold card incident. So just important to keep that in mind.

Starting point is 00:17:03 Now, nevertheless, it had an outsized impact on, like, vibes in general, because as you noted, this was a very popular wallet. It was, you know, promoted heavily by people that, you know, were super cypher punk, and they also sell all the merch, you know, the block clocks that everybody has. That's the same company, you know, kind of a lot of different things. And, you know, I think NVK is super entertaining and used to hang out on Clubhouse all the time. He's a hilarious guy. he's super smart, helped a lot of people get into Bitcoin,

Starting point is 00:17:35 helped a lot of people figure out self-custody, et cetera. So it's like truly heartbreaking. Now, was Cold Card ever used really as a tool for institutions like Swan and others? No, it wasn't because it's not just kind of the evaluation of the device. It's also like, you know, if you go through proper screening to figure out what you're going to use as an institution, it also has to be like size of team and, you know, how deep is there security architecture, you know, is it certified this way, that way, et cetera. And so it just doesn't pass on those. So for instance, with Swan Vault, when we went through that, you know, we couldn't use Cold Card

Starting point is 00:18:15 because it doesn't pass those. You know, it's a team of five or six people or something like that, right? So you just, as an institution, you can't really partner with the company. And so you don't even really evaluate the device in that way. So it really just hurt so much the people that just wanted to be self-sovereign and were doing what a lot of the podcasters said and, you know, like people, it was popular. So in that respect, it's heartbreaking. I don't think it does anything to the long-term value prop of self-custody and holding Bitcoin in a self-sovereign way outside of the financial system. It's kind of the, it's not the main thing in the West, but it's still a multiplier outside of the West. And, I mean, really, the West is fracturing anyway and becoming more socialist and grabby.

Starting point is 00:19:08 So in adding more taxes and kind of everywhere you look outside of the West, you know, it might, Bitcoin might be worth, you know, 5x or 10x more than any other asset that you have inside your local financial system. I talk often about, I call it the sovereignty multiple, but it's basically how much more valuable is Bitcoin and self-custody than the same nominal value of assets that you have inside the system, whether it's banking system or at your stockbroker or whatever. And that multiplier for somebody in the West may only be like, if you don't understand Bitcoin, you don't get it at all,

Starting point is 00:19:42 you just hold an ETF. But even for people like me, I can see it empirically in my financial decisions. I value it at something like 1.5x. anything else. So, you know, if you told me that I could, you know, sell a stock and my only option was like to sell, you know, $150 worth of stock, but I could get $100 worth of Bitcoin, that's about my breaking point. Like friends in Lebanon, it might be 20x instead of 1.5x. It's like the one thing that they really want, you know, outside of the system. So I do think that, you know, ETFs are kind of having their day, but I do think it's actually just the top of funnel for real on-chain Bitcoin, and people come to understand Bitcoin and desire the real thing over time. And it's important that they'd be able to get real Bitcoin. It's the reason that we built RBX, the real Bitcoin Exchange, which is, you know, we launched two or three months ago with quite a bit of fanfare. And, you know, we've been slowly and hopefully more quickly recently emptying GBTC, because that's the one that has one point of

Starting point is 00:20:46 5% per year and everybody's kind of in the gray scale gulag because they don't want to sell and get cap gains tax and we can turn that that the GVTC shares into real Bitcoin in a tax advantage way. Check with your financial advisor, blah, blah, blah, all the disclosures on swan.com slash RVX. But I think it's important that people be able to go the other way as well. Ivitz making a bunch of noise about trying to get people to turn Bitcoin into paper Bitcoin. Swan is the only place that you can turn paper Bitcoin into the real thing. And how do you do that without incurring a lot of tax? Well, the ETFs were structured as grant or trusts, which means that the client actually owns

Starting point is 00:21:26 the underlying. So you have to do it in a particular way. It involves a few different counterparties and, you know, kind of instant liquidity swap, et cetera, and you can never go to cash. But there's a way to do it. It's complicated. We started doing it manually at the beginning of the year with like a 53-step process that probably took a week and a half.

Starting point is 00:21:45 it's down to two or three days in a 24-step process now, but we have lots of happy clients and people owning real Bitcoin and not being stuck in the gulag. Wow. Yeah, that's, I mean, I'm sure it's helpful. There's so many people. Yeah, because that obviously was an albatross for a lot of people, I think, for a long while. It remains. There's 8.5 billion still in there.

Starting point is 00:22:11 And it's like they have another product at 0.15. It's literally one-tenth the fee and they won't let people move over into it. And they can, by the way. It's just a, you know, it's a very sort of calculated. Anyway, I'll watch what I say. I mean, there's good people everywhere, so I don't want to hurt them too much. But, you know, for people out there that are stuck paying six times more than you do at Ibit, 10 times more than you do at Morgan Stanley, even if you just want to go to another ETF, you know,

Starting point is 00:22:39 we can do that too. So, you know, it's just, yeah, I would just say, like, Like, if that's of interest to you, get in touch. Corey at Swan.com. Sorry for the show. But I probably, if we're flush again someday, I probably owe you a sponsorship deal, Laura. Thanks for that one. I mean, it's clearly something I'm sure a lot of OG people are interested in.

Starting point is 00:23:04 So I love this discussion because I think like it shows there, I mean, there's so many options now in terms of like how you can own Bitcoin. And each of those options has its own tradeoff. And so I actually took your comments about like the multiple you would put on Bitcoin to mean like that you would apply that to self-custodied Bitcoin. I think it's real on-chain Bitcoin. I think there's probably like a slight lift to having it fully under your own control. But as long as you can withdraw it in unlimited amounts. So like that would be Coinbase, Swan, River, unchained, all the places without uncapped.

Starting point is 00:23:48 I would say that your Bitcoin is trapped at Fidelity. If it's $25,000 of Bitcoin per day is your max withdrawal, I would say that you're trapped by the financial system if you have a lot of Bitcoin. So I would just say make sure that if you sniff out that weird things might be coming at some point in the USA for some reason. And they may 6102, the Bitcoin, like you want to be able to get at it right. away whenever you want. I don't know what that means.

Starting point is 00:24:13 60102. The 6102 attack is 1933 when they said you can't own gold anymore in the USA. So 6102 is one of those numbers that's just kind of bandied about in the Bitcoin space like 1971 or something like that. I mean, I don't think they would do that. Like, I don't even know how it would happen to gold either. Wow. Yeah.

Starting point is 00:24:39 I also don't think that they would do it. Like the world that we live. than right now in 2026 isn't the one in which I think that is likely to happen. But 1933 looked a lot different than 1928. And things can change very quickly. And so what I would just say is like there is a lot of value in owning real on-chain Bitcoin that you can take self-custy of or that you can move into a multi-sig where you have two keys, even if you have a company like Swan with Swan Vault as the backup or

Starting point is 00:25:11 something like that, there is tremendous value in actually being able to take full custody of your wealth if you choose to. Yeah. Yeah. So let's parse this out because I would love to hear you. You probably have probably like some kind of decision tree about how somebody should think about how to custody their Bitcoin. And I would love to like hear you talk through like, you know, who does it make sense, you know, for them to like just do the Bitcoin ETF or some other kind of, you know, similar type of solution. And then who, like, walk us through kind of like how you think about like which type of option fits which type of scenario or set of circumstances or person. Yeah, I think that's true. So I would say it's, it is a tree with two branches and I don't care about this one, the paper Bitcoin one.

Starting point is 00:26:05 And then I have a lot of thoughts on like the real thing. And I would basically say, Like, if you just want some price exposure and you don't understand Bitcoin or care about it, then paper Bitcoin is fine. And that could be, that could be ETF. That could be, you know, one of the strategy or strive products, whether they're kind of levered equity or one of their prefs or something like that. If you do find yourself understanding a little bit about Bitcoin or caring about owning a little bit of real on-chain Bitcoin and not the paper IOU version,

Starting point is 00:26:36 then you have to think about how to custody it. because it is a bearer asset. And I think about that as a spectrum where just for visualization purposes, let's say on the left is fully on your own self-custody and you have no help. And then as you move toward the right, the next step I would say would be supported self-custody

Starting point is 00:26:57 where you have an advisor, somebody that's actually helping you and there's a bunch of Bitcoin consultants out there. We have Swan Sovereign that we launched. Actually, we launched it interestingly in May And then this cold card thing happened. And then we put out, we officially launched it right after that because we realized so many people wanted it.

Starting point is 00:27:16 So it's got, I think we're at 13 or 1,400 clients already in Swan Sovereign where you actually have a Swan Private Exec that you can talk to about your setup and, you know, do key rotation ceremonies and kind of get our view on different hardware wallets and all kinds of extra information and webinars and this, that, and the other. As you've moved further to the right, I would then put collaborative self-custody, which is multi-sig. So that's like Swan Vault, that's like CASA, that's like Unchanged. So you have two out of three in a multi-sig where you have two keys as the user and a company

Starting point is 00:27:55 keeps the third one as a backup. The reason I like that a lot is because the user can keep one key in their office on their desk like wherever. it can't be accessed. And then you can move your Bitcoin or do transactions with that key and the Swan key or whatever the company is that has the backup key. And that second key of yours can be off in a bank, you know, safety deposit box, you know, states away or in a different country or something. And then if you lose your key, you go take the trip or have your, you know, brother-in-law send it to you or whatever it is and you can still get the coins. Or if the company

Starting point is 00:28:33 goes away for some reason, you still have two keys. So it's really robust and it's probably the right move, especially in a post-cold card world. We've just seen a massive rush of people into that. As you move further to the right, I'd say the fourth stop is just delegated custody. So that's just having an account with a company. Think of it like a bank. So this is swan safe for us, where your coins are stored with backed or Bicko. This is just Coinbase and trusting Coinbase to not lose your coins and not do something funky with it. That's the one that generally got people wrecked because they trusted Celsius and San Bacon-Fried and Quadriga and Mount Gox with their coins. So that's, you know, it is a much better, much more regulated world now. They have good

Starting point is 00:29:19 accountants. They have good audits. They have, you know, OCC chartered in many cases, on and on and on with these custodians. So it is much better than it used to be. And they are leaving the coins at rest and not trying to do all kinds of funky things with your coins, if they are holding themselves out to be real companies. And they're all public, too, right? So you're peering into the financials and really, like, a lot of people are hammering at BACT and BICCO and Coinbase, which are kind of the big three.

Starting point is 00:29:47 Plus, there's others. You know, there's Fidelity. There's, you know, B&Y Mellon for institutions. I think State Street is in the game now, too. So there's more and more of these Wall Street firms that are getting into custody as well. And then finally, I would say the fifth stop on the far right would be multi-institutional where you don't have any keys, but your multi-sig, your three keys are split across three

Starting point is 00:30:10 institutions. So I think that's an interesting model. There's one or two really tiny companies that have started doing that. I like it. We thought about it. I think Mike Belchia had bit go pitched me on it like four years ago. We're doing it now, so we will actually have that out, hopefully by Q4. It's called Swan Trinity, and we'll have a key.

Starting point is 00:30:30 BitGo will have a key, and we're evaluating the third partner. It'll probably be a well-known UK company that has the third key. And that's nice because you're not going to get two institutions colluding to steal your coins. And if one institution gets hacked or something, nothing happened to your Bitcoin. Like nobody actually owns your Bitcoin. I thought it was brilliant when I heard it from Mike. I don't know if he came up with it originally or maybe it was Jameson Lopp when he works there I reared in when he worked there or who, but I just think it's a great model. And I'm glad we're

Starting point is 00:30:59 going to be able to offer it later this year. Wow. Yeah, I hadn't heard of that. That's really interesting. Okay. Well, I love that you broke that down because I think like in the wake of cold card and especially now, you know, like, you know, I just found about this new option that you just talked about. Like I think a lot of people are kind of wondering what exactly to do. And I think that it is such a different world even than before, like when we got into Bitcoin. So I think, yeah, I think people have options and they should think about, you know, what is kind of most appropriate for them. All right. So before we hopped on here, we had a discussion about what to discuss. And you actually told me you didn't want to talk about this. But I need to know why.

Starting point is 00:31:52 So I'm going to ask you about it, which is the quantum threat to Bitcoin. You must be aware a lot of people not only are talking about it, but they're actively working on anything. This is important. There's some portion of the Bitcoin community that is not interested. I personally don't think it's a good idea to poo this threat. But you don't think it's really worth discussing. Tell me why. I didn't say I don't think it's worth discussing.

Starting point is 00:32:23 I don't think it's worth freaking out about. Okay. And the specific time when it came to the fore was manufactured bullshit. We're nowhere near any kind of quantum threat coming. There's nobody serious in the quantum space that actually thinks there's any kind of threat to Bitcoin anytime soon. And basically what happened is there were a bunch of kind of interesting developments in quantum tech kind of late 24 and into early 2025. And there was a huge flurry of pump and dump

Starting point is 00:32:56 penny stock schemes on the stock market in the first half of 2025. And the crypto blockchain people saw that and said, oh, let's launch a bunch of quantum coins and a bunch of bullshit startups, you know, quantum proofing shitty blockchains. And so that's basically where it came into the zeitgeist in late 25 was some funds trying to raise money for their, crappy quantum blockchain startups. So, wait, wait. So one thing that I have to ask is like you started by saying we're nowhere near to when that threat would materialize.

Starting point is 00:33:31 But I think the argument was that if we wait until it's soon to happen, then it's too late. And that because Bitcoin is decentralized, it's much harder for the community to first of all, come to a decision and second than mobilize to execute it. So there's multiple things to unpack there. So first is it's false that nobody was working on it. People have been writing about the future quantum threat to Bitcoin for at least 10 years, and people have been working on it here and there for at least 10 years.

Starting point is 00:34:05 Second is the idea that research needs to be decentralized somehow. Obviously, any individual person or any individual lab can do all kinds of research, and you don't have to mobilize Bitcoin somehow to get people to do that research. It's an interesting problem and people care. And a lot of people that have quantum knowledge also overlap with people who care about Bitcoin. And so there's plenty of horse power to go at this thing. And then the last one that I think is a false assumption that was promulgated by the sub-tweeted blockchain VC that shall not be named is the idea that you wouldn't easily be able to marshal the resources of the community and do something fast.

Starting point is 00:34:51 It's not easy to get the Bitcoin community and the various parts of the ecosystem to band together and do something controversial or stupid. We've seen that time and time again that it's very difficult to make stupid changes to Bitcoin. It should be, from a game theoretical or just a logical perspective, extremely easy to coordinate miners and node runners and economic participants. and, you know, core developers or whatever, to make a change very quickly if there were some kind of existential threat to the network. But like to decide on what that action should be, that might also be harder. Like this question of what to do with Satoshi's coins is probably a good example. That's that, I don't think that's a question at all. I think that's,

Starting point is 00:35:38 and that's just a bunch of alt-coin types lining up wishing they could steal the coins. I don't think there's anybody that I respect in the Bitcoin space that wants to steal Satoshi's coins. Well, okay. So what do you think should happen to as coins, though? Because like, since they're more susceptible to a quantum attack, somebody could presumably steal them and then, you know, dump them on the market. Like, like, that would cause a big problem for Bitcoin, right? Why would they dump them? I mean, because then they could make money. They could turn those. Like, let's say, it's not a Bitcoin or there is somebody who believes in dollars over Bitcoin or whatever the currency is. I mean, how many coins have been, how many coins have traded hands since October? Like 10 million?

Starting point is 00:36:29 I don't know that number. I think it's about it's almost top of my head. I don't know. It's like 8 to 10 million coins of traded hands since, since October. Now, so let's say that you dump the million coins. First of all, remember that they're split over like 22,000. addresses or something, right? Because it's 50 coins for address and he didn't do address or use when he was mining these coins. So you've got to hack all those addresses. You're probably not going to crack them all at the same time. So you're going to see that this is happening. That's that they could crack them silently and keep them until they want to start moving them all at the same time, I guess. Yeah. Again, so like let's say that then a million coins come to

Starting point is 00:37:14 market. I mean, fire sale, back up the truck, great. Now, and let's say that causes a crash into Bitcoin price, fine, we'll suck up the supply. That's like one month of supply on the schedule that we've been on since the all-time high in October.

Starting point is 00:37:32 That was brought to market. And the alternative would be to change the rules of Bitcoin like your fucking Ethereum or something. That would be the most stupid own goal in the history of Bitcoin to just steal the coins and break the rules of Bitcoin. So dumb. Okay. Okay. So you're your anti-freezing Satoshi's point. Yeah. And what about there was

Starting point is 00:38:03 another proposal? Shoot, it's embarrassing because this happened just last week and I can't even remember who said this. But yeah, we, oh, I know, it was Charles Guillaume of, of Ledger. I had him and Ily on the show talking about the quantum threat, and he proposed that they actually seize Satoshi's coins and then tail-emit them to also resolve the security problem at the same time, which I actually thought was a good proposal. But what are your thoughts? The security problem. There is no security problem. Oh, wow. So you feel like the block reward? Why it's such a Fiat mindset and such an alt-coiner mindset to think that you need to change things because something might happen 30 years from now?

Starting point is 00:38:53 I mean, isn't it like mining equipment priced in dollars? Isn't it electricity priced in fiat? Like these are actual real calculations that are happening based on like real prices in the world. And so what what happens if the what happens if the hash price stays stable for? a long time and a bunch of miners end up unprofitable. They go out of business. They turn off the rigs, right? And then in two weeks, the difficulty adjustment happens and it's easier to mine again. And the people that are stored in the game make money. And then potentially it's still have a million times more hash rate than any other proof of proof of work network.

Starting point is 00:39:40 Well, I mean, yeah, of course, because the only, like, what's the next biggest one? Because proof of steak is fiat. So, look, it just doesn't matter. You can't do money without proof of work. You can't have decentralized money without proof of work. So it just isn't an issue. This is made up by, you know, people with alt coins on the brain that think that you need to have inflation. You don't need inflation.

Starting point is 00:40:08 Okay, okay. I'm just, yeah, I'm, I feel like there is going to come a time when potentially if the block reward is small enough and fees are not high enough, then it might not be enough to secure the chain. And I do think that could be a problem. What was the price? What was the price of Bitcoin eight years ago? Like 2018, it was like it started at roughly 20K. We were like 6K, 8 years ago, and then went down to 3K, and it finally crashed through. We thought we had a floor, so it hit 3K. What's the price today is like 79 or something like that?

Starting point is 00:40:50 So even give it 4K, like we're up 20x. And to maintain the same minor revenue in those eight years, you needed to go up 4x. So let me know when the price of Bitcoin starts going up by like dramatically less. than 2x every four years. And we'll worry about it then. And in the meantime, I have a very strong feeling if Bitcoin does what I think it's going to do, we're going to end up with the fee market, a very robust fee market, because I think lots more than tens of millions maybe that use on-chain Bitcoin today.

Starting point is 00:41:29 If that expands to a much larger number, like block space will be limited, and it will have a very active and robust fee market. So again, I don't think there's any point in trying to fix something that isn't broken and that we don't even know if it is going to be broken. And I don't think that we're going to be able to know whether it's broken for at least another 20, probably 30 years. So it's acute mental exercise, but it's really fiat thinking and all corner thinking. Okay.

Starting point is 00:41:58 All right. Well, Corey, it's unfortunate because we kind of got a late start and I had a few other questions for you, but we'll just have to have you back to discuss these other topics. But otherwise, it has been such a pleasure having you on Unchain. Thanks so much for joining. So much fun, Laura. Always enjoy speaking with you. Have a great day. Nothing you hear on Unchained is investment advice. This show is for informational and entertainment purposes only. And my guest and I may hold assets discussed on the show. For more disclosures, visit UnchainedCripto.com.

Unchained - How Cory Klippsten Would Decide How to Secure Bitcoin Post-Coldcard

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