Project 11 founder: Google's quantum paper is a watershed moment — Bitcoin devs can't wait any longer

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I'm doing great. It's great to be here, guys.

Is it over or are we back? What's going on? How bad is it? Tell it to me. Give it to me straight. How long do I have? Uh well, according to Google, you have until 2029.

That's like forever.

That's forever in my mind.

Yeah. Uh although maybe not forever if you think about blockchains that take a long time to change. Bitcoin's last uh upgrade took four years and that's 2029 is less than four years away. So

yeah, that seems really risky. uh take us through like what actually changed because I

well before we get into that a little context would love would love some background on on you and project 11 and then we'll get into all the papers.

Yeah. All good. Uh yeah so me I'm a former army green beret uh got out or I got really interested in Bitcoin working in the Middle East. Uh got out went to Thanks nice sound effect. uh got out uh went to Stanford then got a job working in venture first then uh entered the blockchain space at a company called Alo where I was at for five years before getting really excited about solving this quantum problem that blockchains face and so that's what led me to found project 11 so project 11 I kind of gave it away it's all about securing digital assets on blockchains into the postquantum future right so uh the way I like to to frame it is the what quantum computers threaten is the underlying foundation of cryptography that all blockchains are built on right so it's that level that we have to fix and then ultimately everything on top of that as you guys know from tech like there's all kinds of dependencies at each layer of the stack and we have to rebuild the whole stack and that's what project 11's all about.

Uh just to put it into perspective when did you found project 11? You said it was five years you spent five years at the last company. When did when did you actually get started on this?

Uh October 2024. So just over I guess almost a year and a half ago. And what was what was the general dialogue around quantum and the risk to crypto at that time

that it wasn't real that quantum computers were always going to be 20 years away

that uh you know that no one had to pay attention there were bigger things to worry about uh honestly I feel like that's slowly changed and I think today's not just so there's a paper from Google there's another paper out of Caltech both dropped on the same day both effectively lowered the bar massively that a quantum computer had to clear to he considered crypto cryptographically relevant to threaten Bitcoin. Right? So that was the breakthrough and I think this is a watershed moment where really at this point when Google the head of the Ethereum Foundation and a Stanford cryptography professor all pound the table and say we cannot wait to migrate anymore then people are going to start paying attention.

Okay. What actually changed? because it doesn't seem like the like the number of logical cubits or physical cubits like that seems to be growing exponentially. But even when you trace out the curve, you're 5 10 years away from what we thought we needed. Uh so is this a new algorithm, a new stack of code, or is it new math? Like what changed that we got this 20x increase in efficiency in terms of cryptography breaking via quantum computers? Yeah, a couple things. So, first off, these two papers are not necessarily about a quantum computer that's bigger or more capable, right? So, this they're about what is what it takes to break cryptography, right? And so, what changed? So, one of the things that changed was that interestingly physicists and you know, kind of quantum cryptographers that looked at this problem for a long time studied an algorithm called RSA.

It's not worth defining, but it's kind of an older cryptographic algorithm, but that's not what really any blockchains use, right? because you know RSA keys are very large right so it turns out and this was kind of the key one of the key upshots of the Google paper it turns out that if you actually focus on the cryptography used by Bitcoin Ethereum and other networks it's actually way easier to break than they thought it was compared to RSA and so that is that is one of the major things the other big breakthrough and this is from the other paper from Caltech is that you know quantum computers as as you guys may or may not be aware as your audience may not be aware are kind of you know they're very fragile generally so to be useful They need to have what's called error correction applied and that error correction can kind of result in a lot of overhead. You need to have tons of physical cubits to get to you mentioned logical cubit to get one logical cubit. Well, this Caltech paper basically showed hey we have some new ideas to do error correction. And it turns out if we apply those we don't need hundreds or thousands of physical cubits. Maybe we just need a handful to make one logical cubit. So that the title of their paper actually the headline is you may only need 10,000

physical cubits

to break short to run shores algorithm and by the way they demonstrated last year 6,000 cubits.

Okay, so we're close. Yeah,

that's you know no one's can put a timeline on it but how how fast do you think you can close that gap is the question.

Okay. Uh, is it possible Jordy was uh throwing out the idea of someone having a secret quantum computer going around the blockchain uh siphoning Bitcoin from, you know, cold wallets that haven't

I'm not wasn't implying that it exists yet. Just implying the incentive of if somebody were to create

one of these, but but but yeah, the way you're reacting, I'm imagining it's like if if somebody does it, it'll be

Google first, which is maybe a good thing. I don't know. It's like look, it's really hard to know how it's going to play out. I I wrote a whole blog post on our on our blog on project 111.com people can check out called quantum war games and it was really fun because it's exactly it's like the whatif scenarios, right?

Um you know because why do people want quantum computers generally? Uh well, they're great for science. Two, like you can imagine governments that want to do espionage might want the ability to break cryptography, too. They probably don't want to reveal what they have. Certainly not if it's China or Russia. Yeah.

Right. and um you know but and private companies maybe not Google maybe some of these pure play quantum companies like how are they going to make money well one way would be to recover Satoshi's Bitcoin as if it were buried treasure right like oh buried treasure Satoshi's not here it's mine now

right so I mean that could be another scenario

um so look I think the there is just a whole bunch of uncertainty about how this is going to play out about who's going to execute the attack about how long a quantum computer will take and again because blockchains like Bitcoin fundamentally rely on this cryptography like it's existential for them. That's one of the reasons like I founded project 11 we and we pursue this you know solving this problem very vigorously is because everything's on the line here

and we have to solve it for these chains like Bitcoin to have a future.

Yeah. Uh is there generally low optimism right now that Bitcoin developers will be able to react quickly

enough? Uh what what's the statement about like I think Churchill said about democracies or the Americans maybe where was like they'll do the right thing when every option is exhausted. Um I think this is look I think this is true of decentralized networks like Bitcoin. I mean their greatest strength is the fact that there's no single party that says how it works or how it should work right and this is this is encoded into how it was built by Satoshi as a as a reaction to the great financial crisis right um so that's a great philosophical strength in the face of a crisis like this that demands a massive technical effort to overhaul um it's a daunting challenge because unlike say Google which you know Google has said they're going to upgrade all their systems by 2029 that's just you know someone at Google can make that decision snap right in bitcoin because it's distributed community everyone's kind of first has to agree there's even a problem then everyone has to agree on the solution but I think there's examples of of uh places where blockchains like you know I'll take ethereum uh have done amazing things right so one is they they transition from an old system of consensus called proof of work to a new system called proof of stake it took four years to be sure but it involved thousands of people all over the world and they did it they did it the blockchain's been running Ethereum is the second largest blockchain by market cap so I don't think it's impossible right but I do think especially in light of these two papers, these two breakthroughs, you just can't stop or you just can't wait anymore before starting that process.

Uh what about the rest of the digital world? Because if if uh if if Bitcoin is having problems then so many other kind of core institutions and companies organizations I imagine would uh have issues as well. Maybe maybe uh because they are centralized there's you know easier to react easier to kind of lock things down but still need to upgrade overall encryption.

Yeah, there's no doubt that other institutions need to upgrade but in my mind there's also no doubt that you know blockchains and digital assets are just the most vulnerable. I mean one of one reason is obvious. I mean, Satoshi, uh, Satoshi's Bitcoin, so the founder of Bitcoin, who we think has gone away or died or something, you know, they have a bunch of their early Bitcoin that hasn't moved. There's a bunch of lost coins, you know, all in all, you know, that's about to maybe 15% of all of Bitcoin supplies estimated to be lost. I mean, that's

hundreds of billions of dollars

uh potentially in in, you know, in market terms. So that's just a huge incentive that like let's take let's take the counter example of you know if someone wanted to hack into a bank or something you know as you pointed out banks are centralized they can kind of react also the cryptography the way that banks implement this cryptography is just kind of one of many layers of security right so it's kind of this breaks like theoretically someone tried to wire all the money out of my account my bank call me

yeah no they literally have tape drives where you know they they have cold storage they print things out and they have the ledger and they can potentially roll back which is crazy to think about but like they could if there was like a catastrophic hack they could be like look everyone's just going back to yesterday's accounts and you know that's better than the chaos that we were in

that's it and that's not true for Bitcoin right all I need is one signature and all of Satoshi's or Coinbases or Binance's Bitcoin is mine there's no fallback there's no anything that's how it was designed right that's the point that was the point permissionless

finance that was so

that's the challenge

so what is the state of the more faster moving coins, faster moving moving chains. Are you consulting or do you think you'll plan on launching something yourself that is uh uh quantum secure, quantum proof? Um how do you think this plays out? Because it does feel like uh you know, I'm optimistic that I'm rooting for Bitcoin. I hope the devs figure it out quickly. Uh you know, hopefully that happens. But it does just feel in terms of like the marketing of a new project, there is a bit of a white space to say we're the ones that are taking this particular feature most uh most uh most seriously.

Yeah. Look, I mean it's kind of hard to know how things are going to play out, but the white space that we're occupying is we want to be the bridge, okay,

for digital assets to the postquantum future. right now. That doesn't necessarily rule out potentially having a platform to issue on top of at some point, but I think for now our priority is more or less, you know, people have already decided that things like Bitcoin and Ethereum and Salana and stable coins have value. Yeah.

And I think overwhelmingly they would like to keep the things that they already value and just make them secure. So that's what we focus on, right? And there's no shortage of things for us to do because uh the protocols all have to get fixed, all the smart contracts have to get fixed, all the apps have to get fixed, and then all of the user wallets have to get fixed. And so again, going back to the fact that this is a stack, and you're breaking the bottom part of it. So I mean, we really focus all the way across. So we've done work with Salana, the Salana Foundation, we did the first postquantum test net for them. We've worked with a few other protocols as well. We designed actually a new novel postquantum algorithm designed for blockchains with the founder of Zcash. We've done that, too. We collaborate with EDF and we're doing we're getting ready to launch our own postquantum wallet as well.

Yeah. Uh talk about the information flow. How much of the work that you do the work that will be done by the Bitcoin Foundation, Ethereum Foundation, all the different developers. How much of that is open source by default or licensable or just can be understood by other parties and implemented very quickly? How should we expect diffusion once this problem is solved to actually roll out? Will it just be like, oh yeah, like we're just following the Salana standard and so we're just going to mirror that over onto, you know, whatever chain we're working on.

Yeah, I think there will be diffusion. I think there will be uh you know uh sort of sort of consensus if you will around a certain subset of postquantum algorithms but I don't think it's just you know one and done because Salana is a very different system than Bitcoin right Bitcoin's digital gold it's sort of meant to be slow you know there's no apps on it Salana is meant to be fast right y

and so the cryptography that works for Bitcoin might not be this cryptography that works for Salana and this is actually was kind of the results of of some of the experiments we ran with Salana and uh and Look, this is one of the challenges, right? And this is again by why why we keep saying this is like time to start is now because we don't know how long it's going to take to migrate because

you know these new algorithms, there's trade-offs that come with them. And by the way, even if you choose to implement one, you need to test it and you make sure it's secure, all this stuff. So, um,

have you tried to have you tried to quantify or guess estimate what the quantum discount rate is on Bitcoin right now? Because it's an interesting thing where like if you own a lot of Bitcoin, there's a bunch of people on the timeline today talking about this. They don't have an incentive to like really freak out and spread the narrative, but they have some incentive to say like, "Hey, we need to have a conversation. We need to make progress on this." But, uh, do you think that's that's factoring into price at all?

Totally. I mean, the way I would put it is uh I think if this risk didn't exist, Bitcoin would be priced significantly higher. So, I think exactly what you said is right. you like, "Oh, I'm not going to sell my Bitcoin because, you know, it's maybe not right around the corner and I'm hoping people fix it, but I also think there's people that would maybe enter uh and they're like, you know, Chimath has said this exact thing. He's like, "Hey, is this really digital gold uh without with this quantum threat hanging over everyone's head?" So, I think if that threat was removed, then you know, you remove this cloud over that ecosystem and potentially, you know, you'd have a lot more people coming in and therefore price would be up.

Yeah. the the it's easy to imagine as you approach that 2029 mark more selling pressure, more concerns if meaningful progress isn't made in the next two years. Um uh what what what countries uh have the most kind of advanced quantum projects outside of the US? I can guess, you know, China's, you know, investing heavily here. Uh do they have their own retail quantum companies that are trading like crazy? Yeah. Uh first off, I I think it definitively the leaders uh both companies and research is American. So I think we should, you know, proud to be an American here. Uh but look, I think one interesting thing about the way China has chosen to attack this is uh they've made quantum computing a priority. And what that means in China is, you know, it's like there used to be a lab at Tencent and at BU and a few other places. And at some point a Chinese Communist Party official came in and said, "Guess what? You guys all work for us now." And guess what? You're all working together now. And guess what? You're not allowed to talk about it anymore. Uh, and that's the state of things. It's it's kind of a I don't want to say Manhattan project, but it's like that level of secrecy in China. Uh, and there's a legitimate question around how far back they are. So, the best estimates that we have from quantum like we have a quantum physicist who's an adviser to project 11 that, you know, tracks generally resource estimates across the world and and their view is that China may be six to 12 months behind at most.

And so, this is Yeah, exactly. That's not that far.

Yeah, that's really quick,

you know. And so, can we expect, you know, a quantum computer in the hands of the Chinese Communist Party that maybe is more willing to crush descent in places like Hong Kong to uh care as much about the philosophical principles of Bitcoin and decentralization uh if it serves their purposes to do otherwise. I don't think we can. And so, I think again back to the fundamental problem, uncertainty, right? And it's better to be safe than sorry. So, we need to basically prepare today to prevent the crisis tomorrow to keep the trust in these systems. Well, thank you for everything that you're doing. Thank you for your service both here and before. Uh project 111.com is the website, correct?

Y all spelled out. Yep.

Fantastic. Thank you so much for taking the time to come chat with us. We'll talk to you soon.

The breakdown.

Have a good one.

Great to be here, guys. Thanks. Cheers.

Goodbye. Let me tell you about Vanta. Automate compliance and security. Vanta is the leading AI trust management platform. And without further ado, we have Quaser Ununas in the Reream waiting room from Applied Intuition. He's the founder and CEO of the company. And we'll bring him in in just a second. Uh we are running.

We need a little bit of time.

A little bit ahead of schedule. A little bit ahead of schedule.

We need a little bit of time.

And it's hard because there's not all that much short-term news. There is one news item that we can go through quickly. All birds just sold for $39 million. The company was once worth over $4 billion with DTOC Darling. Followed this company closely. Uh because I was building a DTOC company at the same time. I was like, "Wow, they are really getting big." Um but it seemed like it did not particularly scale. It was more of a niche product potentially. Uh and of course, you know, margins and cost of sales creep in and uh then everything collapses to private equity multiples. Did you ever wear a pair of allirds? Would they ever pull you away from Bayga, get you in some Allirds? You know, it's uh Australian wool,

you know. It's kind of like Italian leather Australian wool. Yeah, there's something like that.

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Not even if you're visiting San Francisco. It's a great It's a great sign of respect.

Sign of respect.

Did you ever Did you ever have a pair? I probably did.

I think I had one pair at some point. Um they were okay. They didn't I don't know. They they they sort of like look okay and were comfortable on day one, but then they sort of deteriorate a little quickly.

This would be

probably2 to3 trillion dollar company

if the shoes had aura.

Yeah.

But they they had

they should have released a lot.

It seems like they potentially had negative

Aura. Yeah.

Yeah.

And they got and the I mean the the stock suffered. They they had to pay the Aura tax,

the Oura discount. massive or loss. Yeah, I mean still a very interesting uh launch, very interesting uh go to market telling the story of where the materials