Blockchain & Web3 Weekly Bytes Edition #43

Quantum Computing’s Impact on Bitcoin, Ray Dalio Backs BTC & BlackRock’s 2% Strategy 🎯

December 14, 2024

Hello Fellow Enthusiast,

Welcome to Edition #43 of Blockchain & Web3 Weekly Bytes! BlackRock recommends a 2% Bitcoin allocation in multi-asset portfolios this week, highlighting its growing role in traditional finance. Vancouver’s city council explores incorporating Bitcoin into municipal finance, and billionaire Ray Dalio calls Bitcoin “hard money” amidst rising global debt.

Tech Spotlight: Breaking Bitcoin? Unpacking the quantum computing debate and its implications for blockchain security.
Weekly Highlights: Predictions of Bitcoin soaring to $200K, Hong Kong accelerating crypto licensing, and MicroStrategy’s ETF debut sparking excitement.
Affiliate Spotlight: Secure your digital assets with Trezor’s reliable hardware wallets—your ultimate protection against online threats.
Chart of the Week: Nation-state Bitcoin adoption—47 countries are advancing access to Bitcoin since 2020, proving its growing significance worldwide.

🧠 Weekly Trivia

Which Web3 protocol was the first to enable decentralized file storage?

A) IPFS (InterPlanetary File System)
B) Arweave
C) Filecoin
D) Storj

*Find the answer at the end of this newsletter.

🌟 Tech Spotlight – Breaking Bitcoin? The Quantum Computing Debate Explained

Quantum computing has ushered in a new wave of innovation—and concern. With advancements like Google’s Willow quantum chip, capable of tackling problems far beyond classical computers, questions about Bitcoin’s long-term security are becoming increasingly relevant.

How Bitcoin Stays Secure

Bitcoin’s security framework relies on two key systems:

ECDSA (Elliptic Curve Digital Signature Algorithm): This ensures that only the rightful owner of a wallet can authorize transactions.
Proof-of-Work (PoW): This mechanism keeps the blockchain robust by requiring miners to solve complex problems.

These mechanisms have made Bitcoin virtually unbreakable using classical computing. However, quantum computing introduces a different paradigm.

The Quantum Question

Quantum computers use qubits to perform calculations at speeds far beyond classical machines. This could potentially:

Target Wallets: Extract private keys from public keys, giving access to funds.
Disrupt Mining: Solve PoW puzzles faster, impacting blockchain integrity.

For now, the threat remains theoretical. Quantum systems capable of such feats would need millions of qubits, while current models like IBM’s 127-qubit processor are far from this threshold.

Proactive Defenses

The blockchain community is already considering defenses:

Post-Quantum Algorithms: Cryptographic methods resistant to quantum attacks are being developed and standardized.
Key Adjustments: Expanding key sizes could provide additional security while transitioning to new systems.
Quantum-Resistant Blockchains: Designing systems built specifically to withstand quantum capabilities.

Final Take

While quantum computing holds potential risks, current advancements aren’t dangerous to Bitcoin. Efforts are underway to ensure that blockchain technologies remain resilient, adapting to the innovations of tomorrow. The steps being taken today will define the stability of digital assets in the years ahead.

📰 This Week’s Blockchain and Web3 Highlights

BlackRock Recommends Bitcoin for Multi-Asset Portfolios: Investors are being advised to allocate up to 2% of their portfolios to Bitcoin. BlackRock's Bitcoin fund has now surpassed its gold fund in assets under management.

Bitwise Predicts Bitcoin at $200K by 2025: Bitwise's 10 predictions for 2025 include Bitcoin reaching $200K and Coinbase joining the S&P 500.

Ray Dalio Endorses Bitcoin as "Hard Money": Billionaire Ray Dalio suggests Bitcoin and gold as alternatives to debt-based assets amid rising national debt concerns.

U.S. Lawmakers Push for Digital Asset Legislation: Incoming financial committee chair Rep. French Hill prioritizes regulatory frameworks for digital assets and stablecoins in the upcoming year.

Hong Kong Expedites Crypto Licensing: Regulators in Hong Kong plan a faster approval process for crypto trading platforms to stay competitive globally.

MicroStrategy's Nasdaq Debut Sparks ETF Speculations: MicroStrategy's expected Nasdaq announcement could trigger a $2.1 billion ETF buying spree.

Vancouver Explores Bitcoin for Municipal Finance: The city council in Vancouver has approved a motion to assess the integration of Bitcoin into its financial operations.

🔗 Affiliate Spotlight: Trezor Wallet

When it comes to safeguarding your crypto, simplicity, and reliability, go hand in hand with Trezor. Designed for beginners and seasoned users, it offers a seamless way to manage and protect your assets.

Why Trezor Stands Out:

Offline Security: Your keys stay offline, minimizing exposure to digital threats.
Comprehensive Support: Compatible with a wide range of coins and wallets.
Stress-Free Recovery: Easily back up and restore your wallet with clear instructions.
User-Friendly Design: Manage your holdings with an interface that's straightforward and intuitive.

Trezor offers more than a wallet—it's a secure space for your peace of mind. Ready to give your crypto the protection it deserves? Start with Trezor Today

😂 A Little Blockchain Humor Break 🤣

Source: Naiive

📊 Chart of the Week: Nation-State Bitcoin Adoption in Full Swing

Bitcoin is making strides in nation-state adoption, but not always in obvious ways. Since 2020, 47 countries have made strides in improving access to Bitcoin, integrating it into their economies rather than outright buying it with public funds.

🔑 Key Takeaways:

47 Countries: Improved Bitcoin access since 2020, with only 4 imposing restrictions.
Indirect Ownership: Nations like Switzerland and Norway use sovereign wealth funds and central banks for Bitcoin exposure rather than direct purchases.
Mining Operations: Bhutan, Argentina, UAE, and Ethiopia are leveraging state-backed mining as a strategic move.
US Leads in Holdings: The US remains the largest holder, leveraging its economic influence.

As countries navigate the political and economic risks of public Bitcoin ownership, their quiet strategies signal a gradual shift toward broader adoption. El Salvador remains the only country with direct Bitcoin purchases, but many are watching and learning.

Source: River

That's it for Edition #43! This week, we explored how quantum computing could shape Bitcoin's future, highlighted the latest in nation-state Bitcoin adoption, and shared predictions for Bitcoin hitting $200K.

Trivia Answer: A) IPFS (InterPlanetary File System)

IPFS was the first Web3 protocol to offer decentralized file storage, paving the way for innovative blockchain-powered applications.

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Best regards,
Ajay Tomar

Disclaimer:

Content in this newsletter is for educational and informational purposes only and is not intended as financial, tax, or legal advice. Always do your research and consult with a professional before making financial decisions. As a solopreneur, I may earn commissions from affiliate links in this newsletter at no extra cost to you. This support helps me bring you valuable content. I only endorse products I trust and believe could benefit you.