Happy Tuesday!

In today's newsletter, we take a look at what Satoshi Nakamoto said to do if quantum computing ever cracks Bitcoin, the altcoin market witnesses its largest long liquidations since 2021, researcher Max Resnick moves from Ethereum to Solana and more.

Meanwhile, Donald Trump would reportedly "love" for bitcoin to hit $150,000 early in his presidency.

Let's get started.

What Satoshi said to do if quantum computing cracks Bitcoin

Amid reignited discussions on the threat to Bitcoin following Google's Willow quantum computing chip release, the community shared Satoshi's prior guidance in case the blockchain's encryption is ultimately broken.

• While Willow is a significant advancement in quantum technology, its 105 qubits are far fewer than required to break Bitcoin's encryption algorithms: the Elliptic Curve Digital Signature Algorithm (ECDSA) with secp256k1 and the secure hash algorithm SHA-256.
• ECDSA secures private keys and authenticates transactions in Bitcoin. SHA-256 ensures data integrity and is critical to the cryptocurrency's proof-of-work mechanism.
• Bitcoin entrepreneur Ben Sigman pointed out that ECDSA, which is vulnerable to Shor's algorithm, would require several million physical qubits to break.
• SHA-256 is even more demanding, needing hundreds of millions of qubits via Grover's algorithm to pose a significant threat. "Bitcoin's cryptography remains SAFU… for now," Sigman said.
• Another community member brought up a BitcoinTalk post from Satoshi in June 2010.
• Satoshi wrote, "If SHA-256 became completely broken, I think we could come to some agreement about what the honest blockchain was before the trouble started, lock that in and continue from there with a new hash function."
• Satoshi also added that if the hash breakdown came gradually, there would be an orderly transition to a new hash.
• Analysts at Bernstein said any practical threat to Bitcoin still seems "decades away" and urged clients to buy the current price dip amid strong ETF demand.
• Ultimately, quantum computing poses a potential threat to all systems that rely on cryptographic standards, including cryptocurrencies, bank accounts and secure file storage.

Largest altcoin liquidations since 2021

The cryptocurrency market witnessed a major deleveraging event over the past 24 hours, with $1.6 billion in liquidations led by altcoins like ETH, SOL and ADA, which saw price drops of 5%, 6% and 11%, respectively.

• Altcoin leverage unraveled sharply after a buildup that saw open interest relative to market cap and funding rates surge, resulting in the largest daily long liquidation event since May 2021, according to analysts at K33.
• Subsequently, some funding rates fell to multi-week lows, reflecting a significant removal of leverage that analysts believe could lead to healthier and more sustainable price action.
• Bitfinex analysts noted, "If funding rates begin to decline further, it would signal that excessive long leverage is starting to unwind, potentially leading to a more balanced market as price forms a base."

Researcher swaps Ethereum for Solana

Max Resnick, a former Ethereum researcher, has left MetaMask developer Consensys to join the Solana-focused development firm Anza.

• Previously critical of Ethereum's technical roadmap, Resnick spent two years at Consensys as Head of Research at a subsidiary called Special Mechanisms Group.
• Resnick plans to write a spec for the Solana protocol, prioritizing fee markets and consensus implementations.
• Solana has emerged as a serious challenger to Ethereum, surpassing it in monthly chain and protocol fees as well as on-chain DEX volume in November.

Bitcoin app Relai raises $12 million

Bitcoin self-custodial investment app Relai has raised $12 million in a Series A round led by Ego Death Capital, bringing its total funding to $20 million and boosting its post-money valuation to $72 million.

• The funding round was structured as "plain vanilla equity," consistent with Relai's previous fundraises.
• The app has facilitated $650 million in bitcoin investments since its launch in 2020, with $450 million occurring this year alone. It aims to reach $1 billion in 2025.
• Currently employing 40 people, Relai plans to double its headcount next year, hiring across product, development, marketing, growth, legal and compliance functions.

Magic Eden airdrops ME token to NFT users across Bitcoin, Ethereum, Solana and Polygon

Multi-chain NFT marketplace Magic Eden has launched its ecosystem token, allowing users to claim and stake ME to participate in cross-chain challenges and future airdrop opportunities.

• Users must claim their ME by Feb. 1, with any unclaimed tokens redistributed to stakers, the project stated.
• Tiff Huang, director of the ME Foundation, emphasized the importance of on-chain applications.
• Ethereum rollup Fuel also unveiled its native token on Tuesday.

In the next 24 hours

• The latest U.S. CPI inflation data will be released at 8:30 a.m. ET on Wednesday. Est. MoM 0.3%; Core 0.3%. Est. YoY 2.7%; Core 3.3%.
• Taipei Blockchain Week continues in Taiwan.

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