{ "episodeId": "SLP759", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "mike_schmidt": { "name": "Mike Schmidt", "role": "guest", "tag": "MIKE" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.0, "text": "Hi everyone, welcome back to Stefan Lovera podcast. Joining me on the show today is Mike Schmidt. We are going to be discussing a topic of the day, which is the Bitcoin Security Consortium. Now, as many of you may know, Mike is the executive director of Brink, which is a well-known Bitcoin development organization. now Mike today is joining, let's say, in the capacity as the volunteer coordinator for the Bitcoin Security Consortium, but obviously it's gonna be relevant. and of course, we're gonna try to address some of the various issues of the day or- Concerns that people are sharing, is it \"quote unquote\" big Bitcoin? Are there parallels to, you know, the New York Agreement or the Bitcoin Foundation and various things like this? Of course, we'll try to address those questions for listeners and people in the broader Bitcoin community, if you're a hodler, developer, et cetera. So, Mike, welcome to the show, and, let's just start with, you know, what, what is the Bitcoin Security Consortium in your own words?" }, { "speaker": "mike_schmidt", "time": "00:55", "start": 55.0, "text": "Yeah, I, I think folks have probably been paying attention to the quantum discussions that have been happening increasingly the last year or two. You know, particularly hitting, a high point a few months ago, and I think that's when you saw Michael Saylor and strategy saying, \"Hey, you know, we're, we're gonna do something about this or, or we're gonna put some resources towards this, right?\" And then you, you know, since then Coinbase has sort of come out with a quantum initiative and, and some other folks have been exploring this on, on the corporate side. And meanwhile, the engineers have increasingly on the mailing list on delving, we've covered it in Bitcoin Optech, been Executing a bunch of research and, and development work towards quantum potential mitigations and sort of discussions around that. And so I think what the security consortium is, is sort of the Recognizing that this is a potential problem, this quantum thing, and businesses wanting to support that research and development that is going on, and I guess there's, there's two pieces to that. One is You know, actually funding in, in continuing this research and saying, \"Hey, whoever's doing this research, just here's dollars to keep doing that research that you guys are doing.\" and then the other piece would be maybe more for the consortium to help inform the broader Bitcoin ecosystem, and I, and I sort of mean, you know, maybe the public, investors, you know, the people who aren't on Bitcoin Twitter day, day to day, because a lot of the work that is being done It hasn't really left our little bubble, and so I think they want to make sure that investors, the public, the media, you know, hodlers, investors are all aware of this work that is going on and, and being able to di-digest some of the technical stuff and then get that to, to a broader audience as well, 'cause right now the quantum fud kind of has dominated. So there's those two pieces to, to the consortium." }, { "speaker": "stephan", "time": "03:00", "start": 180.0, "text": "And so let's just start with, who is part of the so- consortium? Can we just list out the nine members and, you know, what is the, what's the main thing they're known for?" }, { "speaker": "mike_schmidt", "time": "03:10", "start": 190.0, "text": "Yeah, sure. I, I wanna make sure I bring it up so I don't forget anybody. so in alphabetical order, no particular order other than that, there's Anchorage Digital, Ark Invest, BlackRock, Block, Blockstream, Coinbase, Fidelity, Digital Assets specifically, Galaxy, and Strategy. So you can see You know, there's, there's a bunch of Bitcoin constituents in there, you know, including holders, financial institutions, custodians, and payment processors, et cetera." }, { "speaker": "stephan", "time": "03:42", "start": 222.0, "text": "Yeah. And now the other big item there I see in the release is the fifteen million dollars member pledge over the next three years. So can-- what can you tell us about that?" }, { "speaker": "mike_schmidt", "time": "03:55", "start": 235.0, "text": "Yeah. So this, you know, a few of these organizations had been, you know, speaking with each other about this quantum issue, and, you know, that sort of was the genesis of the consortium, and they wanted somebody to help run the day-to-day activities, and they reached out to me to see if I would be interested in, in doing that. And, you know, I, I spoke with- Representatives from each of the, the member companies to s- see if I thought that there could be good outcomes for Bitcoin that would come of this, and part of You know, then launching this thing was me heavily pushing for some version of proof of work with the announcement, right? So I think for Bitcoiners, they wanna see some activity, you know, an announcement of an announcement, for example, you know, falls on deaf ears to, you know, Bitcoiners. And so I really pushed, what is something that, that this group can show as part of the announcement? You know, maybe it's, maybe it's not some deliverable per se, but what we- We decided on was getting the different member companies to pledge some amount over the next period of time. We, we decided on, you know, three years, which, you know, gives some runway to this long-term, you know, quantum issue. And so that's really where the fifteen came from, that includes all of the, the nine members, that includes, you know, Spiral and, and Blockstream or, you know, I, I say Spiral, but Block is Technically, the, the member, but Spiral has been putting money towards security initiatives for many years, as part of their, their spend, and similarly to Blockstream, they've already been doing a lot of this cryptographic research. So that is, you know, the, the portions that are applicable to the consortium are in that number as well, as well as new monies from some of the other member companies." }, { "speaker": "stephan", "time": "05:53", "start": 353.0, "text": "And who determines where that money goes? Is that you or is it each, of, each of the nine entities?" }, { "speaker": "mike_schmidt", "time": "06:00", "start": 360.0, "text": "Yeah, there was There's a few things that I was fairly strong on if I was gonna, you know, take this volunteer position, and one was I didn't think it was a good idea to pool the funds into one organization and that organization then has a bank account or a Bitcoin, you know, balance or something, and then that- consortium would then dole out the funds based on voting or however it might work if you pooled the funds. I think that's bad for Bitcoin, and you don't really get much by pooling those funds. And so one of the stipulations that I had was The members should re-retain their autonomy if Fidelity Digital Assets wants to fund local host research or some university or some other researcher They should be able to do that, right? They shouldn't have the red tape of, of, you know, nine organizations saying that they can or can't do that. And so it's really up to the member companies to You know, part of this will be getting them aware of the different research that is being done, and, you know, maybe making introductions to universities or, or dev-funding organizations or individuals doing this work, and then it's up to the member company to evaluate if they think that that is worth their resources towards." }, { "speaker": "stephan", "time": "07:24", "start": 444.0, "text": "And now, will the funding decisions be made public? Like, will they say, \"Okay, we're doing a va-- a funding grant for this much money to this person or this organization\"? Because we want to fund whatever quantum opcodes or whatever." }, { "speaker": "mike_schmidt", "time": "07:40", "start": 460.0, "text": "Yeah, I mean, part of the, I guess, downside of the autonomy is like they have the autonomy to announce that or not announce that, or say that they're funding somebody but not say how much. That's really up to them. I am very much of the opinion that, you know, given the elevated status that this group or that these companies may have by being big participants in Bitcoin, that I would very much encourage them to be transparent with who they're funding and why and what amounts, and I think most probably will, but ultimately that is up to them. I know Some of the member companies are, are quite, you know, private about, you know, all sorts of things that they're, they're, you know, they're marketing materials around, you know, maybe Bitcoin work or, or even, even, even other work, and then other organizations are happy to, to shout it from the rooftops. But I would very much encourage the transparency" }, { "speaker": "stephan", "time": "08:37", "start": 517.0, "text": "there. And another obvious elephant in the room question, Mike, you're obviously the executive director of BRIC, which is a well-known Bitcoin development organization. Is there a, a separation? Is there a conflict of interest procedure you're following here? Like, how does it work when you are, let's say, you're wearing two hats? You've got the hat of executive director of Brink, and then the other hat is volunteer coordinator of this Bitcoin security consortium. So how's that gonna work?" }, { "speaker": "mike_schmidt", "time": "09:03", "start": 543.0, "text": "Yeah, I, I-- This was put, well, maybe I posted this in my sort of ex-post about this. Yeah, we'll put that in the show notes as well. Yeah, but I was- I'm considering this role, the, the, the, the volunteer role that I'm, that I'm taking, as a sort of rolling position. You know, I, I've committed to a year of this, assuming all goes well. Maybe there'll be two years for me out of this, but I, I do think that even though the member companies, it's-- they retain the autonomy to fund and, and opine on protocol proposals, there is still some uneasiness that I have about You know, being in, quote unquote, in the, in the middle of this. I think it's particularly an advantaged position for me as running BRINK, to be the one who now, you know, has You know, the contact information of these people that, you know, I didn't have contact information before, and s-- and some of the other dev funding organizations or academic institutions doing quantum research don't have that contact information and that Facetime with these people. so I think there is that inherent advantage to me tak- be-me being the first one to take this role. And so My plan, now that we've ann-announced this thing, is to sort of introduce whoever's working on these quantum proposals and quantum research and quantum development, all this, trying to get them a venue at the table to these member companies so that that privileged position that I have in this very short time since we've announced can hopefully, you know, be washed out by them having their own relationship, the member companies having whatever relationship they- They choose to have with other dev funding organizations, so we don't know exactly what that looks like, but, you know, it could be, you know, a video chat meeting, you know, with each of the organizations where they can show what, what their plans are for quantum and, and why that is important and why these member companies should fund it, it could be, you know- Just merely introductions and these member companies chat one-on-one with these organizations and these academic institutions. It's really TBD. It's, it's, it's on my list to do 'cause then I feel like I'm not the bottleneck for communication between this consortium and the broader, you know, Bitcoin development R&D areas." }, { "speaker": "stephan", "time": "11:35", "start": 695.0, "text": "I see. And then, when it comes to, I guess, are you also going to act as some sort of a, a gatekeeper role? Because, let's say, there are all kinds of people making all kinds of claims about quantum stuff, they could come to you and say, \"Hey, like...\" You know, I need money to do X, Y, and Z. Who-- Is there some kind of quality filter that's gonna be applied here, or can any Joe off the street just kind of say, \"Hey, I need this thing 'cause I'm doing X, Y, and Z,\" like who determines if it's legit, if it's worthwhile?" }, { "speaker": "mike_schmidt", "time": "12:06", "start": 726.0, "text": "Yeah, I, I suppose it's not entirely surprising that in the days, since the announcement, that I've gotten, you know, several emails. From individuals, and also, companies doing something, something quantum, and, you know, would love to have the consortium take a look at it. And what, what I've encouraged those groups and individuals to do is to make sure that they get their research or their project or whatever it is that they're working on in the public as soon as possible, in front of as many people as possible, you know, especially on the, the tech side of things. Things, right? So, hey, if you have a great idea, post it to the Bitcoin dev mailing list, you know, post it to Delving Bitcoin, you know, do a write-up somewhere so that it can garner, you know, broad feedback and broad awareness. I don't- This is another thing where I, I don't wanna be the middleman to, from these ideas to people who may fund them, right? and also the ideas that will get out and get traction will be, will probably be better ideas, so it doesn't make sense to email me directly with, with your idea, because you'll get more exposure and, you know, more of a battle-tested idea if you post these things in public. So I, I, I don't have an interest in, in fielding, you know, applications or- Something like that. I think that should be done by the, the community, including, you know, then these participants, of the consortium as well." }, { "speaker": "stephan", "time": "13:39", "start": 819.0, "text": "Now, com-coming back to, again, the, the conflict of interest side of it on the, the BRINC side and the consortium side, will there be a perception then that consortium money goes to BRINC and BRINC is, you know, the, a funding, source for Bitcoin development, and I guess that will-- there will also be the questions raised about, is it a concentration of- You know, the funding, like these large, big nine entities, are they gonna put money into-- now maybe Block is a separate category 'cause they've already got Spiral, but maybe the others, they might well end up funneling money to Brink so I guess how do you, how, how do, how do you deal with that?" }, { "speaker": "mike_schmidt", "time": "14:17", "start": 857.0, "text": "Yeah, so Frank, we've, we've, we announced Conduition, you know, a month or two ago at this point, who's doing quantum R&D, and, you know, I think if, a member company wants to support that work, It would be weird to say that, you know, you can't support Brink because I'm, I'm in this role, but obviously, yes, it would also be weird If all fifteen million dollars went to Brink, so I think, you know, there's probably some reasonable middle ground, and I think it'll be clear to the member organizations once they get to meet Other organizations, and not just other funding organizations, but, you know, academic researchers or whoever else is, is doing a lot of this good work It, you know, they'll, they'll see that, hey, Brink is an option, but, you know, there's also a dozen or two, or two dozen other groups that are doing valuable quantum work and, I, I'm, that's my, that's my hope, and I would hope that, you know, folks who are doing this work who, have ideas that are already public and are getting some traction, you know, can, can feel like that, you know, if they don't get face time with these organizations in some way or, or get a chance to, speak with them, that, that they would speak up and, and essentially call me out for being, you know, for, for guarding, you know, communication with these folks, 'cause I- I think the idea is here, you know, the, the reason that these organization, that these member companies wanna contribute is 'cause they wanna find the best ideas and, and, and move them along. And so if I'm not doing that, I'm not doing my job, and, and both the member companies and the potential academic and funding institutions that are on either side of that should, should definitely call me out for that." }, { "speaker": "stephan", "time": "16:05", "start": 965.0, "text": "Now, earlier you mentioned this idea that your role as the volunteer coordinator is going to rotate, so maybe it's one or two years in this role and then it rotates to somebody what does success look like here?" }, { "speaker": "mike_schmidt", "time": "16:20", "start": 980.0, "text": "Yeah, I guess success for this consortium, I think, is gonna be potentially different in early years versus middle years versus later years. I think the success in the early years You know, now that we have this public accountability, this, this sort of pledge, you know, what I, what I called earlier proof of work, but really what it, what it serves as is like accountability for these member companies to themselves now that they've pledged You know, this money over these years, and, you know, I guess part of the success would be fulfilling on those pledges, assuming that they find worthy causes that they wanna put the money toward. I, I guess, you know, the success in, in this next year or two, really the three years, would be Does that money get allocated? How does it get allocated? And then, you know, ultimately, what does, you know, what do the member companies think about that allocation when it starts to, you know, actually- produce fruit from the different researchers, you know, but also what does the Bitcoin community think about the allocation of that fifteen million dollars? So I think on the funding side You know, allocating that fifteen million over these three years, to, you know, what Bitcoiners think are worthy causes would be how I would evaluate the consortium, on the funding side. There's also the informing side, which I think is a little bit more external to, like, Bitcoiners, but, you know, is this consortium surfacing important work to a broader audience, such that the headlines aren't just dominating, you know, \"Quantum destroys Bitcoin, you know, next year,\" these kind of things, \"Bitcoin developers haven't done anything for quantum resistance, right?\" Or, i-is the informing side also, doing its job? And I think that one, you know, there's- There's no pledge in that regard, and, you know, since we just launched the consortium, I, I don't have, you know, exactly a, a blueprint of what that's gonna look like just yet. We need to figure out how we're gonna, you know, help inform the broader discussion on quantum still. But that would be the second, second thing. If I'm reading" }, { "speaker": "stephan", "time": "18:34", "start": 1114.0, "text": "you there, it's like, let's say you wanna put out a joint statement as the consortium from, you know, all these people, Strategy and BlackRock and Fidelity, Digital Assets and Galaxy and Block and everyone, to say, these are the things that Either we or Bitcoin developers or Bitcoin fund, you know, development organizations are doing on the question of quantum, let's say to answer, let's say investor questions about Bitcoin and quantum, this kind of thing. Yeah. And" }, { "speaker": "mike_schmidt", "time": "19:00", "start": 1140.0, "text": "I don't even think it's exclusive to things that the consortium is funding through their members. I think it could be just, you know, I could see something in the coming months that is sort of a, you know, TLDR on the last, you know, two years of, you know, Bitcoin quantum research and development Development, like get the broader public up to speed on what has been done, regardless of if the consortium funded it or was had any say in it, but like what are the discussions going on? Why are those discussions important? What are the important considerations around quantum? And then, you know, maybe even some analysis about, you know, quantum computing claims, right? We've seen some very Inflated claims about what quantum can and will do in short term, and I think having, having voices to be able to moderate that, you know, those, those maybe overstatements on the quantum side is also important, and then, you know, maybe once the, the broader public is more up to speed on the work that has been done, then maybe it's a little bit more steady state, you know, here's the last six months or so of, you know, research and development work, oh, coincidentally also- Maybe Coinbase funded, you know, this organization and this is why they funded it, and then obviously in, you know, as we progress in later years, there, there will be accountability to where the money went and what the Deliverables that came out of that, right? Like, you know, s-member organization funded X Y Z research team to do A B C, we're a y- we're a year in, what, you know, what actually came of that, and, and having accountability, you know, towards the a-actual, developers and, and academics working on these problems." }, { "speaker": "stephan", "time": "20:44", "start": 1244.0, "text": "So the other big elephant in the room nowadays is people, it's almost a meme, this idea of, quote unquote, big Bitcoin. Is big Bitcoin taking over can a large group of holders and companies? Push or advocate protocol changes, and of course, the obvious parallel for a lot of people will be the twenty seventeen Infamous New York Agreement, which, you know, there are a lot of parallels that people may draw to that. So how do you answer that around the so-called big Bitcoin or, taking positions on where the protocol should go?" }, { "speaker": "mike_schmidt", "time": "21:17", "start": 1277.0, "text": "Yeah. I mean, these institutions, regardless of the consortium, already have, you know, some- Some seat at the table as Bitcoin businesses, holders, participants, right? And so I, I don't think that any of the challenges, but, you know, are, are really changed by having this consortium, right? Like really the advantages of the consortium You know, in, in the gathering of this group voluntarily together, you know, the, the togetherness is really more a united front to the media and, you know, towards the public on the state of quantum and Bitcoin. Internally, all of those members can fund and do whatever they could have done before the consortium, you know, was announced, right? and in fact, if there was some- Master plan by financial institutions to, you know, to, to have a preconceived notion about what the quantum solution is and, and to, to fund it and to force it, is would probably have been better done quietly as opposed to, you know, announcing that they want to, you know, work on this issue and, and fund, you know, people working on this issue. So I think that's one point. You know, another point is, and I think this was in the press release and, and some of the materials Around the announcement, but, you know, this group has expressed that they want to fund the people who are already doing this research. Now, I'm sure there'll be new people that will be doing, you know, jumping into this research as well. but this isn't- A group getting together to form their own, you know, development team. there's no, as far as I have discerned so far, there's no particular preference for one solution over another. They wanna fund the, the orgs already doing this and the academic institutions already doing this, and, I'm sure All of the quantum landmines that were present previously before the consortium will still be there. It'll still be a fight about whether or not, you know, if there is some hash-based signature scheme, for example, there'll be a fight about, you know, whether it should be deployed or not, whether it's ready or not, whether, you know, that Should, should we wait for Asagi? Should we, should-- what about Lattice? All those fights are, are still gonna, you know, be present. You know, obviously there's the Satoshi, you know, down the road, there's the Satoshi coins or Satoshi era coins question as well, and all those questions still remain. and so I don't see that the consortium, you know, changes What we as Bitcoiners are probably gonna fight about in this quantum debate and how the participants, including the large financial institutions, can take action or not." }, { "speaker": "stephan", "time": "24:03", "start": 1443.0, "text": "Now, on the quantum thing, I, I guess Sort of, again, fingering here what I'm kind of reading when I'm looking at some of the conversations, it seems like as I look at developer conversations, they seem a little more towards the side of things like disabling ECC spend because they see that as like, that's a security problem, and you, you know, maybe they, they may, they may make an argument about, you know, making sure that the protocol stays secure in that sense. And then as I kind of look at, let's say, everyday hodlers, they tend to be really focused on, oh, the private property rights question, don't freeze coins. of course, i-it can get a bit, you know, the way you particularly frame that issue, because people might say, \"Well, okay, is it freezing Satoshi and the other early era holders have time to move or do these various things. So I guess as you, as you see it, like, how are you seeing that particular quantum? kind of question, at least what kind of positions are you seeing people take?" }, { "speaker": "mike_schmidt", "time": "25:07", "start": 1507.0, "text": "I guess in, in my mind and also with regards to the consortium, I, I think Punting on that for now is the best. I think what, what it, what is valuable for Bitcoin now, and I think a lot of people would agree, would be research and development on a quantum-resistant signature scheme, right? And I think we can all, including Big Bitcoin, including the Bitcoin Security Consortium, can all take a step forward together saying that this, it's reasonable to have this research done and have something available As like a community next step, right? All participants in the community can, you know, fight about this, and but I think we all agree that like that kind of work seems like it should be done for a variety of reasons. And I think that, you know, the, the last domino in this is, you know, the, the, the freeze, you know, or, you know, freeze versus steel question. Now, Unfortunately, even some of the discussions around what can we do on the R&D front early on, there are dotted lines, you know, of certain solutions towards, you know, freeze versus steel, right? And so it's not easy to, you know, it's, it's not as easy as I'm saying to like, \"Hey, let's just do research and development, we'll punt on the, the freeze versus steel question.\" I, I, I think that's true to a degree, but we have to make sure that the solutions that are coming- forth early on aren't inherently tied to one of those, and, and if they are, then the community should agree, you know, then agree that, that, you know, freeze or, or steal, which I think it's gonna be hard to get consensus around that. So I think any potential mitigation that, that's gonna inherently tie itself to one of those is You know, is gonna get some resistance." }, { "speaker": "stephan", "time": "27:04", "start": 1624.0, "text": "And of course, there's a variation, a large variation in views even amongst developers and even amongst everyday hold-holders, and amongst the consortium, I'm sure there'll be a variety of views on that question too, because there may be people inside the consortium who are more quantum skeptic, let's say, maybe they think it's, it's a longer term thing, or maybe it's, you know, not so near, and then maybe others have been more, let's say, think it's coming sooner. So how, how's it gonna work if there" }, { "speaker": "mike_schmidt", "time": "27:31", "start": 1651.0, "text": "Yeah, I mean, I guess the good news is, is that the, the two sort of guardrails in terms of funding and speaking on, you know, protocol proposals specifically are that the members retain autonomy and that the consortium itself isn't personified to have a, a voice, right? And so, I guess the consorti- if, if member companies were in complete alignment about X, Y, Z proposal, then the consortium, I guess, could say all members hold the opinion That X Y Z is, is the best route forward, but really it's the members retain autonomy on their comments on that, now That's great, you know, but that doesn't obviate that there would maybe be fighting between the member companies, you know, about which route is best, but That the consortium, you know, doesn't add or, or change the calculus on that versus if there was no consortium, if BlackRock thinks something and Strategy thinks something else, then, then they can, you know, fight about it With consortium or without the consortium, right? So I don't think it changes the calculus there. Obviously there will be, you know, tensions if that were the case, but those tensions I think would be present, you know, whether the consortium is there or not. So" }, { "speaker": "stephan", "time": "28:53", "start": 1733.0, "text": "When it comes to the level of interest and technical capability, I'm sure there's a, there's a variation there too, because obviously yourself, Steve Lee, Adam Back, right, would be among the most informed and interested on these Bitcoin technical questions because, you know, it's-- you live and breathe it. But maybe there are other people inside the consortium or, let's say, underlying staff in those nine- Companies, maybe they're not as into it, maybe not as informed. Can you comment a little bit on that part?" }, { "speaker": "mike_schmidt", "time": "29:25", "start": 1765.0, "text": "Yeah, I think the good news is now that the, the consortium is announced You know, what I mentioned as a step that I would like to take is to de-bottleneck myself as, you know, the person communicating on behalf of the development side of, of this, and immediately bring in other organizations, have them talk about what they're working on, bring in other, groups in academia that are potentially working on this and have them talk to the group for the, you know, for the communication on the funding side of things. That will inherently have an edge- educational aspect to member companies and representatives from those member companies that aren't familiar with, you know, what hash-based signatures are and what the downsides are or what this far-out isogenies thing might be, right? So there'll be some educational component there just to get the member companies introduced to the different groups working on this. And then also the, the second, you know, sort of activity that the consortium wants to take on is what I've been calling the inform side of things, which is digest this technical information For a broader audience, and given that the consortium will also be involved with putting out that content, or at least reviewing it for publishing, they will have that education as well. If they don't, if they're not familiar with particular things, the whole point of what the consortium's gonna put out to the public would be, you know, educational content that would potentially benefit consortium members or representatives, within those organizations as well. So, the good news is, is that, you know, the, the logical next step in, in a- A variety of ways leads to, being more, you know, member companies being more familiar with the technology and the, the groups working on it. So I, I hope that, that that can help" }, { "speaker": "stephan", "time": "31:10", "start": 1870.0, "text": "I guess I'm also trying to get to the idea of, in each of the nine member entities or companies, is there a person who is, let's say, you know, technically savvy enough to really judge different contributions, or how much are they going to have to lean on, let's say, yourself or others who really are closer to the detail?" }, { "speaker": "mike_schmidt", "time": "31:32", "start": 1892.0, "text": "Okay, good. Yeah, good question. I think some member companies have representatives That are more technical, you know, you mentioned Adam Back and Steve Levy would be, I guess, you know, canonical examples of, of more technical, but some organizations have representatives at the consortium that are less technical but in, in many cases, those folks have in-- have folks internally that, you know, they can lean on as well, and I mean, internal to their own company, not internal to the consortium. you know, you can imagine, you know, Coinbase has You know, n-probably employed, but also in contact with cryptographers, you know, mathematicians, researchers, folks who work on post-quantum stuff for their other internal operations, regardless of the Bitcoin protocol's quantum resistance, right? And so I think those folks You know, can lean on their own teams in many cases in addition to other members of the consortium, and, you know, where necessary, we-- you know, the consortium itself can bring in, you know- If there's like a quantum researcher that, you know, wants, you know, to maybe opine, it, it could be valuable to have them opine on the latest development in, you know, Google's, you know, quantum computing that they put out. It'd be nice to have a academic come in and explain some of that to the consortium more broadly, but also those member companies have their own internal tech teams that they can lean on for that sort of thing." }, { "speaker": "stephan", "time": "33:08", "start": 1988.0, "text": "Scope-wise, now we've obviously spoken about quantum, are there other topics that you would look at other than quantum?" }, { "speaker": "mike_schmidt", "time": "33:14", "start": 1994.0, "text": "Yeah, good question. And, and why isn't it called the Bitcoin Quantum, you know, consortium? I guess is like a version of this question. And, you know, at, in my role at Brink, obviously we focus a lot on, you know, Bitcoin security and that's, you know, protocol side, but also a lot on the, on the software side. So I'm very much in the camp that there's a lot of security work to be done, right? Better testing, right? different kinds of testing, audits, you know, using enterprise software to testing, code review, these sorts of things. And You know, so I'm very sympathetic to wanting to broaden the, you know, the amount of funding that goes towards security. I do think that this group Has made it pretty clear that that stuff is important, but what, what the group really wants to get together to do is this big, massive quantum thing and putting resources towards the, the R&D there. And so- It's entirely possible, and part of my, you know, discussing with representatives from these organizations, you know, early on before taking the role was like, you know, would you, you know, do you consider Other things, you know, within the purview of what you think that the consortium could work on someday. And I think there's various members that are, you know, amenable to, you know, if there is some, you know, I think the, the, the threshold is probably pretty high for this group to say, hey, there, there's an issue. I mean, obviously If there's some classical cryptographic break that isn't related to quantum, I would think that this group would be very- That" }, { "speaker": "stephan", "time": "35:01", "start": 2101.0, "text": "would probably be in scope, you know? Yeah," }, { "speaker": "mike_schmidt", "time": "35:02", "start": 2102.0, "text": "I would think that something like that would be in scope if there's some, you know, I, I think the bar is high, though, I guess is what I'd say. I think that the, that this group appreciates the security, but" }, { "speaker": "stephan", "time": "35:12", "start": 2112.0, "text": "not necessarily. So starting with quantum, it's possible that it expands out further, that if it's a classical crypto break or, I don't know I think, I think that's fair." }, { "speaker": "mike_schmidt", "time": "35:31", "start": 2131.0, "text": "Yeah. But I, I, I think they all sort of like nod their head like, \"Yes, there could be something else, but like, clearly quantum is this thing.\" which, which, you know, maybe brings up, you know, You know, maybe back to your topic about big Bitcoin and taking over Bitcoin, and I found that these companies, if, you know, if there weren't a quantum issue, I think that these companies would largely be happy with just staying away from the development and letting it be. Maybe they make some contributions to organizations like Brink or some of the others that are, you know, doing some of the maintenance and security work, and, and, you know, they're happy to, you know- To, I think they would be happy to just, you know, not be a part of it at all, but I think that this quantum threat rises to that level and that they, they feel like they have to be involved in some way. And again, the, the way that they've chosen to be involved is to support existing R&D work that's being done. They're, you know, they're not You know, trying to come up with their own implementation or specific proposal at this point. So" }, { "speaker": "stephan", "time": "36:35", "start": 2195.0, "text": "I guess here's the other thing. So for years, as obviously you well, you well know, and maybe a lot of the listeners know In earlier years, there was maybe a cris- a concern that there wasn't enough funding for Bitcoin development relative to the size of Bitcoin as a trillion-dollar, you know, ecosystem and growing, obviously. And, and so I do wanna be fair to you guys also, because there's a bit of a damned if you do, damned if you don't here. Because for years, people used to criticize crypto exchanges and companies for not sponsoring Bitcoin development, and there are other times where, you know, let's say, you know, Matt Ardell and Michael Saylor have gone back and forth for not funding Bitcoin, about funding Bitcoin development, this kind of thing. And then on the other hand, there is an element of, now, now that the big guys, the big nine entities, let's Of, oh, are they, is it big Bitcoin? Is it the New York Agreement all over again? So how do you best thread this needle of damned if you do, damned if you don't?" }, { "speaker": "mike_schmidt", "time": "37:33", "start": 2253.0, "text": "I, I guess Personally, I've come to the conclusion, and I think anybody who's been around Bitcoin for any amount of time, is that we're gonna fight about everything, you know? If there's not funding, then we're gonna fight about it. If there is funding, then we're gonna fight about it. We're gonna fight about where the funding goes, we're gonna fight about, you know, potential in-incentives and, and governance issues. There, there's always gonna be a fight, right? And so this is just another example, and, and this is, this is Bitcoin. This is money for enemies, and so there's gonna be fighting, right? I, I think that the way that these member companies have choo-chosen to sort of come to the table, in my opinion, reluctantly, only because it's, you know, potentially catastrophic issue for Bitcoin in their mind, well, maybe in everybody's mind, but m- they maybe they think that it's actually gonna be here, whereas others don't think it's gonna be here. I think they've come to the table in a way that is, you know, respectful To, you know, the, the centralized, you know, ethos of, of Bitcoin. And so, you know, hopefully people who are skeptical of them, I-- that, that's the proper reaction to the announcement of, of this consortium is, is skepticism. But, you know, don't trust Verify, you know, be skeptical, but also, you know, let's verify, let's see what these groups do and, and what the tangible outcome is." }, { "speaker": "stephan", "time": "39:02", "start": 2342.0, "text": "We touched on it before, but I guess it would be good to have a concrete answer Because the parallel is going to be there. What is the difference between the New York Agreement of 2017 and the Bitcoin Security Consortium, now in 2026?" }, { "speaker": "mike_schmidt", "time": "39:15", "start": 2355.0, "text": "Yeah, I think the New York Agreement was Had, had a, a protocol roadmap that was essentially agreed upon by, you know, some members of the community as this is what Bitcoin will be, you know, next year, you know, or whatever the, in particular time, time frame was. We got in a room, we decided that this is what, you know, Bitcoin is gonna be. That, that's sort of the, you know, New York Agreement, right, in a nutshell." }, { "speaker": "stephan", "time": "39:45", "start": 2385.0, "text": "Right. And I guess just for listeners, I'll give a very quick kind of- Very high level, it was a compromise saying, the small blockers in the core side wanted SegWit, and then some of the other, entities wanted bigger blocks. So the argu-- so the loose kind of very high level compromise was, \"Oh, we will give you SegWit,\" and SegWit locked in in August of twenty seventeen, and then, then we'll get the block size increase up to two megabytes, that would have been like, was planned to be, I think, like December or so of twenty seventeen. That didn't actually occur. So An additional block size increase, there was a big fight about that, that was known as the No 2x campaign at the, at that time. So I guess Mike, you can spell out the difference then between what the NYA, the New York Agreement was, and what this is." }, { "speaker": "mike_schmidt", "time": "40:30", "start": 2430.0, "text": "Yeah, I think there's, there's no protocol roadmap. there is no agreement on, you know, anything other than exploration and R&D of a potential solution. There's not even any, you know, promise by any party that there will be a solution. I don't remember exactly the parties involved with the New York Agreement, but, you know, obviously there, there were groups at that time from, you know, mining constituencies that, you know, wanted to be involved. There were Exchanges, you know, hodlers involved, and there's, you know, developers sitting at a table, you know, saying that this is what Bitcoin's gonna be, and right now, really only one Group is sort of represented with the consortium that would be sort of like businesses slash hodlers or hodler businesses, and they're not saying that this is what the protocol change is going to be. They're specifically saying, \"We aren't saying, we, we don't wanna dictate what the protocol is going to be. We want, we see that, you know, the way that Bitcoin does things, you know, is not, you know, New York agreement.\" So They didn't even try to do such a thing. They, they said, \"This is how Bitcoin development and consensus works. We wanna participate, and by participating thoughtfully, that means not saying what the protocol change is going to be, not, not, not getting in a room with the developers and then announcing a roadmap.\" and so I think they're, they're doing this in a respectful manner, and, you know, in my discussions with them, I don't think that- That I had to even bring up the New York agreement, right? They, they sort of like, they, they sort of understand that that was a lesson learned of not- You know, they, they didn't even bring it up to me as a, as a route to go, right? So it wasn't like I had to educate them on this, their Bitcoin participants, and, and aware that that's an, you know, inappropriate way to participate. So" }, { "speaker": "stephan", "time": "42:31", "start": 2551.0, "text": "I think that's good news. So closing thought, I guess, or closing question, what does success look like for the consortium after these three years, as you mentioned, the fifteen million is over three years? So what does success look like in three years' time?" }, { "speaker": "mike_schmidt", "time": "42:43", "start": 2563.0, "text": "Yeah, I think You know, I, I can give sort of a top of mind what, what I think could be successful, at, at least in my eyes. I think You know, maybe tactically it would be nice to roll my position to another participant in, you know, the Bitcoin ecosystem, you know, whether that's one year or two years out. I think spending toward the level of that fifteen million would be successful, in one regard, but the question then is spent on what and what was the outcome. And so I think seeing more mature proposals as the direct result of funding that comes from the consortium, you know, that could be, you know, there's a lot of discussion about shrinks right now and some of the R&D that went into that, you know, I think, you know, one version of success would be that, you know, maybe that has some version of, more rigorous implementation and testing and, you know, maybe there's some formal verification that can be done around that that the consortium can contribute to. I think that, you know, I think it's Dan Bonet at Stanford has spoken recently that maybe- Lattices should be something that, you know, Bitcoin should look at. So I think a group maybe coming out with some version of a deliverable on the lattice front could be interesting from the consortium. And then, you know, Conduit and who we fund at Brink has, you know, sort of thought long term, hey, maybe short term is hash based and shanks, but maybe long term something like isogenies could be explored. And I think there's been very little work done there. And so I think if the consortium can say that we took the This work that these people were already doing and we, provided resourcing for it and that all of the proposal options from those various types are now more rigorous and, and better off because of the funding that happened, I think that would be A success on the funding side, and then on the informing side, I would hope that when the next wave of, you know, quantum innovation and, you know, press releases come out, that the consortium can have, you know, A thoughtful response such that the headlines aren't entirely dominated by the demise of Bitcoin as of the result of some incremental quantum research, and so I think, you know, maybe a combination of those two, w- you know, maybe after three years would be, you know, a, a win for the consortium, but really in my mind A win for the consortium is, is a win for Bitcoin, so I think those would be wins for Bitcoin" }, { "speaker": "stephan", "time": "45:32", "start": 2732.0, "text": "as well. Excellent. Well, let's leave it there. So listeners, you can follow Mike over at BitSchmitty on X and the BTC Consortium X account. I will put the links in the show notes, as always. and, thanks for joining me, Mike. Yeah, thanks for having me," }, { "speaker": "mike_schmidt", "time": "45:47", "start": 2747.0, "text": "Stefan. Cheers." } ] }