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Why the mind-bending physics of quantum computing is terrifying for bitcoin and crypto

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(CoinDesk)

This week, Google published a paper describing how a quantum computer could theoretically derive a bitcoin private key in 9 minutes, with ramifications that stretch to Ethereum, other tokens, private banking, and potentially everything in the world.

Quantum computing is easy to mistake for a faster version of a regular computer. But it is not a more powerful chip or a bigger server farm. It is a fundamentally different kind of machine, different at the level of the atom itself.

A quantum computer starts with a very cold, very small loop of metal where particles begin to behave in ways they do not behave under normal conditions on Earth, ways that alter what we think of as the basic rules of physics.

Understanding what that means, physically, is the difference between reading about the quantum threat and actually grasping it.

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How computers and quantum computers actually work

Regular computers store information as bits — each is either a 0 or a 1. A bit is a tiny switch. Physically, it’s a transistor on a “chip” — a microscopic gate that either lets electricity through (1) or doesn’t (0).

Every photo, every bitcoin transaction, every word you’ve ever typed is stored as patterns of these switches being on or off. There is nothing mysterious about a bit; it is a physical object in one of the two definite states.

Every calculation is just shuffling these 0s and 1s around really fast. A modern chip can do billions of these per second, but it still does them one at a time, in sequence.

Quantum computers use something known as qubits instead of bits. A qubit can be 0, 1, or — and this is the weird part — both at the same time!

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This is possible as a qubit is a completely different kind of physical object. The most common version, and the one Google uses, is a tiny loop of superconducting metal cooled to about 0.015 degrees above absolute zero, colder than outer space but here on Earth.

At that temperature, electricity flows through the loop without any resistance, and the current is said to exist in a quantum state.

In the superconducting loop, current can flow clockwise (call that 0) or counterclockwise (call that 1). But at quantum scales, the current does not have to pick one direction and actually flows in both directions simultaneously.

Don’t mistake it for switching between the two really fast. The current is measurably, experimentally and verifiably in both states simultaneously.

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(CoinDesk)

Mind-bending physics

With us so far? Great, because here’s where it gets genuinely strange, because the physics behind how it works isn’t immediately intuitive, and it is not supposed to be.

Everything someone interacts with in daily life obeys classical physics, which assumes that things are in one place at one time. But particles do not behave this way at the subatomic scale.

An electron does not have a definite position until you look at it. A photon does not have a definite polarization until you measure it. A current in a superconducting loop does not flow in a definite direction until you force it to pick.

The reason we don’t experience this in everyday life is decoherence. When a quantum system interacts with its environment, air molecules, heat, vibrations and light, the superposition collapses almost instantly.

A football cannot be in two places at once because it is interacting with trillions of air molecules, dust, sound, heat, gravity, etc., every nanosecond. But isolate a tiny current in a near-absolute-zero vacuum, shield it from every possible disturbance, and the quantum behavior survives long enough to compute with.

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That’s why quantum computers are so hard to build. People are engineering physical environments where the laws of physics that normally prevent this stuff from happening are held at bay for just long enough to run a calculation.

Google’s machines operate in dilution refrigerators the size of huge rooms, colder than anything in the natural universe, surrounded by layers of shielding against electromagnetic noise, vibration, and thermal radiation.

And the qubits are fragile even then. They lose their quantum state constantly, which is why “error correction” dominates every conversation about scaling up.

So quantum computing is not a faster version of classical computing. It is exploiting a different set of physical laws that only apply at extremely small scales, extremely low temperatures, and extremely short timeframes.

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(CoinDesk)

Now stack that up.

Two regular bits can be in one of four states (00, 01, 10, 11), but only one at a time (since current flows in only one direction). Two qubits can represent all four states at once, as the current is flowing in all directions at the same time.

Three qubits represent eight states. Ten qubits represent 1,024. Fifty qubits represent over a quadrillion. The number doubles with every qubit that is added, which is why the scaling is so exponential.

The second trick is something called entanglement. When two qubits are entangled, measuring one instantly tells an observer something about the other, no matter how far apart they are. This lets a quantum computer coordinate across all those simultaneous states in a way that regular parallel computing cannot.

And these quantum computers are set up so that wrong answers cancel each other out (like overlapping waves that flatten) and right answers reinforce each other (like waves that stack higher). By the end of the computation, the correct answer has the highest probability of being measured.

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So it’s not brute-force speed. It’s a fundamentally different approach to calculation — one that lets nature explore an exponentially large space of possibilities and then collapses to the right answer through physics rather than logic.

A monumental threat to cryptography

This mind-bending physics is why it is terrifying for encryption.

The math protecting bitcoin relies on the assumption that checking every possible key would take longer than the age of the universe.

But a quantum computer doesn’t check every key. It explores all of them simultaneously and uses interference to surface the right one.

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That is where it ties into Bitcoin. Going one direction, from private key to public key, takes milliseconds. Going the other direction, from public key back to private key, would take a classical computer a million years, or even longer than the age of the universe. That asymmetry is the only thing proving that a person is holding their coins.

(CoinDesk)

A quantum computer running an algorithm called Shor’s can go through that trapdoor in reverse. Google’s paper this week showed it could do so with far fewer resources than anyone previously estimated, and within a timeframe that races against bitcoin’s own block confirmations.

This is why the threat of quantum computers breaking blockchain encryption is genuinely making everyone very worried.

How that attack works step by step, what Google’s paper specifically changed, and what it means for the 6.9 million bitcoin already exposed, is the subject of the next piece in this series.

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Crypto World

Invisible Commerce: Why AI Agents Are Killing the Traditional Checkout for Good

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Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR:

  • Walmart recorded a 66% conversion drop when embedding agentic checkout directly inside ChatGPT’s interface.
  • OpenAI phased out Instant Checkout after merchants reported poor results with chatbot-based purchase experiences.
  • The Machine Payments Protocol lets AI agents pay via HTTP requests, using cards, wallets, or stablecoins natively.
  • Know Your Agent frameworks are now being developed to secure invisible payments before autonomous spending scales further.

Invisible commerce is emerging as the next frontier in AI-driven payments, replacing the checkout model. Walmart recently recorded a 66% drop in conversion rates when embedding agentic checkout inside ChatGPT.

OpenAI subsequently phased out its Instant Checkout feature. These developments signal a major shift. The payments industry built agentic commerce on the wrong foundation.

Agents do not need better checkouts — they need payments that happen automatically, without human intervention.

Walmart’s Checkout Experiment Exposed a Fundamental Flaw

Walmart’s conversion rate collapse was a clear indicator that something was broken. Embedding a human-optimized checkout inside a chatbot created friction rather than reducing it. The process was designed for human eyes, not machine logic.

OpenAI responded by pulling Instant Checkout entirely. Merchants now handle purchases through their own app-based systems instead.

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This retreat confirmed what many in the payments space suspected — agentic commerce built on traditional checkout rails does not work.

Fintech analyst Simon Taylor captured this tension clearly. He noted that agentic commerce protocols now outnumber actual agentic transactions.

The infrastructure is ahead of the real-world use case, and the use case itself may have been wrong from the start.

Stripe previously outlined five levels of agentic commerce, borrowing from autonomous driving. Each level still assumed a visible purchase event. Even at the highest level, an agent reacts to human intent. That model is now being questioned.

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The Parking Agent Demonstrates a New Payment Paradigm

A hackathon project changed how some in the industry are thinking about this problem. A developer built a parking AI agent that detects a user’s location and pays the local parking authority automatically. No checkout appeared. No purchase intent was required.

The payment happened because an event occurred in the physical world. The agent inferred what was needed and completed the transaction. This is the model that Taylor refers to as invisible commerce.

This approach mirrors how Uber handles payments. A rider exits a vehicle and money moves — no cart, no confirmation screen, no “pay now” button. Uber achieved this by owning both sides of the marketplace. The challenge now is replicating that experience across open agent ecosystems.

Developer Steve Krouse shared a related observation on X, noting that giving agents a USDC wallet produced a genuinely magical product experience. That sentiment reflects growing interest in agent-native payment infrastructure.

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Machine Payments Protocol Points Toward Agent-Native Commerce

The Machine Payments Protocol (MPP) launched recently as one attempt to solve this infrastructure gap. It allows agents to initiate payments through a simple HTTP request. The protocol supports credit cards, digital wallets, and stablecoins.

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Early use cases include agents purchasing API access, compute resources, stock footage, and real-time data feeds. However, the first viral use case was far simpler. Users had their agents buy them sandwiches, as shared by developer Josh on X, citing MPP and related tools.

Google is also releasing new agentic protocols regularly. X402 is another protocol operating in this space. The competition signals that the market sees real demand for machine-native payment rails.

Security remains an open question. When agents spend autonomously, audit trails become harder to track. Liability for compromised agents is still unresolved. Researchers are now working on Know Your Agent (KYA) frameworks to close that gap before the technology scales further.

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Crypto World

Crypto Market Loses $1.5 Trillion in Two Quarters: Is the Worst Still Ahead for Bitcoin?

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Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR:

  • Crypto markets shed over $1.5 trillion across Q4 2025 and Q1 2026, with Bitcoin driving nearly 60% of total losses.
  • Gold outperformed Bitcoin by nearly 40% in recent months, a strong signal that large capital favors safety over risk assets.
  • Bitcoin has traded flat between $65K and $69K for weeks despite rising oil prices and growing geopolitical tensions globally.
  • BTC dominance and the gold-to-Bitcoin ratio remain the two most critical metrics to watch for early signs of market recovery.

The crypto market sits at a crossroads as Bitcoin consolidates within a narrow range. Over the past two quarters, digital assets lost over $1.5 trillion in total market value.

Institutional capital has pulled back, and macro forces are weighing on risk appetite. Traders are watching carefully as the market weighs potential recovery against further downside, with conditions outside crypto likely determining the next major move.

Bitcoin’s Recent Losses Point to Broader Institutional Retreat

Bitcoin led the market lower across Q4 2025 and Q1 2026. Combined, those two quarters wiped out roughly 45% in value from the broader market. BTC accounted for nearly 60% of total losses recorded during that period.

That detail changes how analysts read the sell-off. When Bitcoin drives the drawdown, it is not retail traders dumping speculative tokens. It reflects real capital reducing exposure across the entire asset class.

As MR Black noted on X, “When BTC is leading the drawdown, it isn’t a sector rotation. It isn’t retail panic selling memecoins.” That observation carries weight, especially for investors trying to time a re-entry into the market.

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Gold’s Outperformance Sends a Clear Risk-Off Signal

The XAU/BTC ratio has shifted nearly 40% in gold’s favor over recent months. Gold offers no yield and carries no technological narrative. Its strength signals that large capital holders are choosing preservation over growth.

That ratio matters because it reflects institutional psychology, not retail sentiment. When the biggest players move into gold, it means confidence in risk assets remains low. Crypto has not yet shown the kind of recovery that would pull that capital back.

However, analysts note that this ratio could become one of the first signs of a turnaround. When it begins reversing, it may indicate that risk appetite is returning and that institutional money is ready to rotate back into Bitcoin.

Sideways Price Action Raises Questions About What Comes Next

Bitcoin has traded between roughly $65,000 and $69,000 for several weeks. That range has held despite rising geopolitical tension, higher oil prices, and growing inflation concerns. Normally, any of those factors would trigger sharp movement in crypto markets.

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The muted reaction suggests one of two things. Either the market has already absorbed much of the uncertainty, or it remains so undecided that it needs a strong external trigger to break either way. That ambiguity makes directional calls difficult right now.

BTC dominance remains a key metric to track through this period. When dominance rises, capital clusters in Bitcoin and altcoins suffer.

When it falls, capital rotates into higher-risk assets, and historically that rotation has preceded some of the strongest alt-season runs in a given cycle.

The path forward for crypto depends heavily on macro developments in the coming weeks. If oil cools and geopolitical risks ease, the current consolidation could prove to be a base for recovery.

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If conditions worsen, further downside remains possible, with altcoins likely absorbing the most pressure. Traders watching signals beyond the price chart may be better positioned for whatever move comes next.

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Attorney Says Drift Protocol May Be Liable for Damages After Attack

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Cybercrime, North Korea, Cybersecurity, Hacks, Lazarus Group

The hack of the Solana-based decentralized finance (DeFi) platform Drift Protocol could have been prevented if standard operational security procedures were followed by the Drift team, and may constitute “civil negligence,” according to attorney Ariel Givner.

“In plain terms, civil negligence means they failed their basic duty to protect the money they were managing,” Givner said in response to the post-mortem update provided by the Drift team and how it handled Wednesday’s $280 million exploit.

The Drift team failed to follow “basic” security procedures, including keeping signing keys on separate, “air-gapped” systems that are never used for developer work, and conducting due diligence on blockchain developers met through industry conferences.

Cybercrime, North Korea, Cybersecurity, Hacks, Lazarus Group
Source: Ariel Givner

“Every serious project knows this. Drift didn’t follow it,” she said, adding, “They knew crypto is full of hackers, especially North Korean state teams.” Givner continued: 

“Yet their team spent months chatting on Telegram, meeting strangers at conferences, opening sketchy code repos, and downloading fake apps on devices tied to multisignature controls.”

Advertisements for class action lawsuits against Drift Protocol are already circulating, she said. Cointelegraph reached out to the Drift Team but did not receive a response by the time of publication.

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Cybercrime, North Korea, Cybersecurity, Hacks, Lazarus Group
Source: Ariel Givner

The incident is a reminder that social engineering and project infiltration by malicious actors are major attack vectors for cryptocurrency developers that could drain user funds and permanently erode customer trust in compromised platforms.

Related: Drift explains $280M exploit as critics question Circle over USDC freeze

Drift Protocol says attack took “months” of planning

The Drift Protocol team published an update on Saturday outlining how the exploit occurred and claimed that the attackers planned the attack for six months before execution.

Threat actors first approached the Drift team at a “major” crypto industry conference in October 2025, expressing interest in protocol integrations and collaboration.

The malicious actors continued to build rapport with the Drift development team in the ensuing six months, and once enough trust was built, they began sending the Drift team malicious links and embedding malware that compromised developer machines.

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These individuals, who are suspected of working for North Korea state-affiliated hackers and physically approached the Drift developers, were not North Korean nationals, according to the Drift team.

Drift said, with “medium-high confidence,” that the exploit was carried out by the same actors behind the October 2024 Radiant Capital hack.

In December 2024, Radiant Capital said the exploit was carried out through malware sent via Telegram from a North Korea-aligned hacker posing as an ex-contractor. 

Magazine: Meet the hackers who can help get your crypto life savings back

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