Game theory it out. As a pure thought experiment let’s say today there exits a military lab somewhere in Asia that just successfully tested a machine running 2.5k logical qubits (superconducting), 1 billion gates, whatever, key point it's enough to crack a key every hour or so, maybe 30 mins. And possible to make more.
Their goal, as part of a wider strategem, is to end Bitcoin, collapse it, cause as much panic in the west as possible.
What's their plan? How do the execute it? What happens when they do? What triggers what, and what cascades into what?
When you game theory it out you quickly realise it’s not a case of some 20 % of outstanding coins returning to the supply, we all have coffee, tomorrow is another day.
No no, it’s very bad.
Here are some things to consider
- They will have built up a supply of pre-cracked private keys to use all at once, for wallets with exposed pubkeys and the biggest balances
- For anyone with funds in a wallet that does not have an exposed pubkey, as soon as they hit 'send' the pubkey is visible to the lab.
- If the network is busy (which it certainly will be during a great panic) transactions can sit in the mempool for hours, even days.
- The lab will announce (true or not) that they can actually crack wallet keys in 10 minutes, and will pay anyone [insert low about] for their bitcoin now, or steal it on first attempt to move, your choice.
-And on and on. Add your own.
Users are terrified to move their money. If you leave it, it might be stolen later. If you move it, it is stolen now. Desperate users try to outbid the hackers by setting $5k USD transaction fees to get their funds in a pubkey hidden wallet. The lab, with its infinite stolen coin, simply sets their theft-fee even higher. The mempool fills with millions of transactions that will never clear. People break their transactions into small bits hoping some will get through. This just increases the congestion.
As the price collapses (which obviously it will) miners see the possibility they'll be hit with electricity bills they can't pay. The hash rate starts to drop off. With the hash rate in trouble the block time stretches even longer. This makes the sniper attack even more effective, as the lab has lots of time to crack a single key while a transaction sits in the frozen mempool.
By the end of the first week, the lab don't just have some coins. They have effectively destroyed the consensus reality of the asset, a knockout blow from which Bitcoin cannot recover.
This is of course a fantasy today. But it might not be a fantasy in 5 years, or 10 years. We are at 100 logical qubits, we need 2,000. That's not a huge jump. Gate numbers will move. Last month was a massive error-correction breakthrough over at Harvard. Other breakthroughs will happen. If at the time that this thought experiment vector actually exists and everything on the bitcoin side is just as it is today, well then, lights out.
Even if such quantum tech has only a 20% chance of existing in the next 10 years, why tempt fate but delaying the migration? It'll take years anyway, why not make it the #1 priority from today?
