Bitcoin’s new quantum defenses, 18.9M SOL cancelled: Hodler’s Digest

Bitcoin moves toward a post quantum future, Solana validators agree to curb rampant inflation and the bull case from Bernstein is for Bitcoin to peak at $500K this cycle.

Despite considerable skepticism among Bitcoiners about how close the quantum threat to Bitcoin actually is, two stories this week highlighted the progress being made toward upgrading the blockchain and protecting outputs from attack.

StarkWare researcher Avihu Levy tested an experimental quantum-resistant transaction on the Bitcoin mainnet that protects it during the brief period when public keys are exposed in the mempool.

Onchain data shows that StarkWSare spent a 10,000-satoshi output protected by Levy’s Quantum Safe Bitcoin (QSB) scheme. It combines hash-based one-time signatures with computational searches that bind an authorization to a specific transaction. While it works, it’s more of a last resort than a practical measure, as each transaction takes hours and costs between $150 to $200.

There’s also been progress on long term upgrades to protect every transaction. On August 27, Blockstream researchers published a Bitcoin Improvement Proposal to upgrade Bitcoin with the SHRINCS signature scheme. The researchers slimmed down a huge, hash based post quantum signature by about 13.23 times — an impressive effort, but the SHRINCS signature is still at least nine times larger than Bitcoin’s existing signatures and comes with a bunch of trade offs.

Blockstream Research’s Jonas Nick called it “the first concrete proposal for a post-quantum signature scheme designed specifically for Bitcoin.” He conceeded it was “not optimal along every axis” but added:”I do think it is a very good trade-off among the options we have now,” he said.

Solana validators have approved a proposal to double the network’s annual disinflation rate. This will reduce issuance by 18.9 million SOL over the next six years.

Overall participation reached 60.7% of eligible stake and the proposal received 67% support, with 25.16% voting against and 7.84% abstaining. Known as SGP-0002 or Double Disinflation, the measure will increase Solana’s annual disinflation rate from 15% to 30%.

Under the new schedule, Solana is expected to reach its 1.5% terminal inflation rate in about 2.8 years, compared with roughly 5.7 years under the previous schedule.

Onchain data presented by The Kobeissi Letter showed that Solana processed a record 4.2 billion transactions during July, up 13.5% from the month before. Transaction counts have risen by roughly 2 billion since December, representing a 91% increase.

Nonprofit consumer advocacy organization Public Citizen claims that US President Donald Trump “left investors at least an estimated $4.7 billion underwater” since 2022 through his and his family’s digital asset ventures.

A new report states that investors lost $3.2 billion via his Official Trump (TRUMP) memecoin, at least $1 billion on the World Liberty Financial governance token, $450 million on Trump Media’s digital asset treasury, and at least $9.3 million on the president’s nonfungible token (NFT) trading cards launched in 2022.