¶ Intro / Opening
Matt Walsh and Nick Carter are partners at Castle Island Ventures. All views expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures.
Positions and the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only.
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Different kind of market and the Fed is asleep. The federal government is stepping in to stabilize Fannie Mae and Freddie Mack, the two mortgage giants that have been threatened by the housing crisis.
with a new round of quantitative
¶ Bitcoin's Origin and Quantum Threat
You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin.
Welcome to On the Brink. I'm Matt Wall.
And I'm Nick Carter.
How many times have you talked about quantum?
Pretty much constantly. All week. Nonstop. I do you think I'm the main character or not quite?'Cause you'd never want to be the main character.
You don't wanna ever be the main character. I don't think you're the main character. I think the main character is actually Some of these guys that wrote the paper. Like the Google
Yeah.'Cause you want to be close to main. You want to be co main, but you never want to be the number one guy.
Never want to be the number one guy. I'd say the main character right now is probably Mike
So insane week. I feel somewhat vindicated. I mean, was it earlier this week, Monday or Tuesday, these two quantum papers came out on the same day? vastly lowered the resource requirements to break elliptic curve cryptography.
Yeah, I guess let's just hop into it right now before we talk about the deals and talk about the Castle Island content. Um I guess the Castle Island content was just you talking about. uh quantum on um the observation podcast with Alex Prudent from Project Eleven. But why don't you just tee up the two papers that came out and what they said?
Yeah, so you know how we've been saying that like We're in the equivalent of nineteen forty in terms of like nuclear physics advancement equivalent for quantum, right? So like theoretically proven but not practically built yet. I think was basically Monday of this week, the day when i it really kicked off the race. So two papers came out on the same day. That wasn't a coincidence, that was coordinated.
The first one is by Google Quantum AI, plus Dan Bennet, the most uh really the most influential cryptographer on the planet, plus Justin Drake of Ethereum. Uh Google Quantum AI, by the way, the best quantum lab on the planet. So this is elite tier best of the best guys in every class. This paper What they're not doing is they're not saying we've, you know, broken elliptic curve cryptography. They're not saying we have a machine. They're saying
If you had a machine, this is the algorithm you would run on the machine, and these are the resource requirements. So that's what they're saying. It's a resource estimate. they've posited that you if you had a superconducting qubit logical um quantum computer you could break elliptic curve cryptography with twelve hundred logical qubits and s you know, ninety seventy to ninety million tefoligates, uh, which you could run in
c in terms of clock time you could run that into ten to twenty minutes. So This is a massive reduction both on the logical qubit side, but much more importantly on the T gate side as in the runtime. So their big contribution was to Realizing If you had a quantum computer this size, you could actually crack elliptic curves
in around ten minutes, which is how long it takes for a transaction to be included in the blockchain. So this opens up Bitcoin to this new style of attack, what they call on spend, what I call short range attack. Um and so it it changes the threat model.
Uh for the word.
So that was a a huge contribution and they actually were so worried about this that they didn't publish the circuit directly. They published a ZK proof showing that they knew what the circuit was, but they actually didn't want to reveal it to the world. So that was an insane paper and I I highly recommend you read it.
Pretty crazy they didn't publish the all the details, right? Like that sorta shows you how serious this could be.
Yeah, and you remember how we were talking about nuclear physics, that's exactly what happened in the early nineteen forties. People stopped publishing their research. Then there's another paper from a bunch of academics uh at Caltech, um, including this guy John Preskill, who's highly reputed, they actually spun out and started this startup called Oratomic that was announced.
This paper uses a different modality. It used a neutral atom modality. Neutral atoms are known for being more stable Uh higher fidelity, so lower error rates. but also they take longer. The com computation takes longer. So what they found was they think you can run a successful break of ECC two five six on as few as ten thousand physical qubits.
Um or um but it would take longer, right? So the other trade off they explore is twenty six thousand physical qubits in a ten day runtime to break one key. So a totally different trade off there in terms of the number of qubits, the types of qubits, and the runtime. But this paper actually scared me more'cause this looks to be more immediately practical in terms of where we are in t at the hardware level. So Both papers were very impressive, very scary, and both advanced the state of the art.
¶ Bitcoin Core Devs' Quantum Response
So the logical next step was Bitcoin core developers read these papers and said, Okay, we need to actually get on this and you know, we there's an upgrade path here, we're just gonna start now and put out our roadmap. That's what happened, right?
Yeah, so it's funny you say that because that's absolutely not the reaction. Uh instead you had the most of the Bitcoin core developers that I saw comment on this accused me of having a conflict of interest for drawing attention to the papers. Ignoring the fact that I was not involved in these papers. This is a Google paper and it's a Caltech and a Stanford paper. I was actually cited in the Google paper though. That was cool. That was cool. Um so no. Most Bitcoiners
I mean, to give credit to quite a few Bitcoiners actually did perk up their ears and and uh revised their their assessment of the risk here. But um no, unfortunately there was a big stir about this and A lot of developers and Bitcoin nerds. continued to kind of deny, dismiss, deflect Some of the Bitcoin core devs did reach out to me actually. And they said, You know, you're wrong actually. Um, we are concerned about this and efforts are underway.
But the thing is is th this is information that it seems like only they are privy to, right? And so if you look at the bailing Bitcoin mailing list, there's no real evidence. that there's any kind of posture that Bitcoin is is gonna upgrade. We have to somehow eavesdrop on their private conversations to get this information, which is not very helpful. Everybody that holds Bitcoin wants to know if this is a priority or not.
And it's not clear from public data whether it is. So that's the predicament we find ourselves in.
What's your take on BIP three sixty that's being proposed here? Um obviously this is not a quantum play, but it's, you know, fixing some of the taproot issues, I guess.
Yeah, I I so I like the team there. I've met with them. I uh I'm supportive of them, Hunter and Isabel and Ethan. A hundred percent a supporter of what they're trying to do. BIP360 has changed a lot in its current form. It doesn't have any post-quantum cryptography in it. So it's very incremental. The current proposal fixes an issue with Taproot. That said, I still want it to get included into Bitcoin because it would show the developments have the developers have this.
pro mitigation posture because then there would be a phased approach and and maybe we would include um, you know, a new address type that's post quantum. But it as it stands, BIP360 on its own, as written, is not a solution, unfortunately, though I do support it.
Crazy times. We'll keep an eye on this. Um so as I mentioned, you appeared with uh Alex Pruden. I guess people are saying you're conflicted, um,'cause you're going on podcasts with a portfolio company that is in the quantum resistance or quantum migration space. I don't know how you'd characterize that.
Yeah, I mean if if you don't like conflicts then then you hate this podcast too because we routinely interview our founders. There's like this kind of like East Coast mentality that you know, all uh economic incentives are evil and perverse. And then there's sort of the West Coast mentality that like, of course you want to invest in what you believe in, right? So we as venture capitalists invest in what we believe in. So I don't really see an issue there.
Well, I think we so we made this investment in Project Eleven over a year ago and it was with the idea that we just believed that quantum computing was going to impact public blockchains and eventually we'd have to have some sort of a migration to post quantum. Thus we put our capital on the line. Beneath that thesis. So it's funny that people would consider that a a conflict, that you're like rooting for the demise of crypto.
Yeah, I mean t to be clear, we're so long crypto with our careers and our capital and our fund. I mean, unimaginably long. As long as anyone could be. So we want crypto to survive. And from my perspective, we've put more capital to work to save crypto than literally anyone else on planet Earth.
¶ This Week's Crypto Venture Deals
All right, so we'll talk a little bit more about quantum maybe later on the pod, but um why don't we hop into the deals of the week?
Yeah first up uh you know two Castle Island deals here to start. First up Valinor, that's a credit institution designed for on-chain finance. They raised$25 million in a round led by us. Uh also including Neoclassic Capital, Susquehanna, Paxos, the Venture Department, and Maven Eleven.
Yeah, very excited about Valinor. So huge congrats to Connor and Lily. Uh really excited. uh about what they're building. Then we have OpenFX, which is a stablecoin FX wholesale liquidity company. They've raised ninety four million dollars in a Series A led by Excel with Atomico M thirteen and Pantera. Big congrats to Prob and the team. Uh
FX market is just being completely upended by stable coins right now. And the big wholesale banks are nowhere. So you're seeing these companies like OpenFX just get to tremendous scale.
Yeah, one of the fastest growing companies in our portfolio. Uh next up you have the Better Money Company, that's a stablecoin clearinghouse platform. They raised ten million from A six and Z, Box Group, Sunflower Capital. Big congrats to Sam Bronner and the team there.
Then it's polymarket. They've raised another six hundred million dollars from the Intercontinental Exchange. I guess this is potentially part of that original investment that was agreed upon back in October. uh where they pledged to invest up to two billion dollars. So maybe there's a tranched out deal there. But um it's a lot of capital and they might need it, you know. There's some regulators coming after them. That's right.
Next up you have Midas, a tokenization platform. They raised$50 million from R R E, Creandum, Coinbase Ventures, and Franklin Templeton.
Then it's Megapot, which is an on-chain lottery platform, a global lottery. How many times have we talked about that? I uh I have always thought that so.
Yeah.
Um so they raised five million dollars. It was led by Dragonfly with participation from Coinbase Ventures and Bankless. Global lottery system, I mean You know, this is a actually a pretty good use case for a blockchain.
Congrats to them. Uh next up you have Key Rock, that's a digital asset market maker. They raise a series C from Standard Chart Adventures, Ripple, and others.
Then it's Latitude, which is a stablecoin payments company. They raised$8 million from NEA, Lightspeed Faction, and Coinbase.
Next up you have Kulipa. That's a stablecoin card issuer. There is six million from Flourish Ventures, 1KX, and White Star Capital.
And lastly, it's Uniblock, a blockchain infrastructure company that raised$5 million from SBI, Alliance DAO, and blockchain founders.
¶ Quantum's Broader Blockchain Impact
Busy deal week.
So we've covered the uh big news of the week, uh, you know, two pieces of quantum research. Strongly suggest you read those. I thought the um Google paper was just really comprehensive, not just in terms of the threat, but also the specific implications for blockchains, Ethereum and Bitcoin. I think that's why they brought in Justin Drake.
he provided the most sophisticated brak breakdown of the issues that Ethereum faces with quantum. So people say, Well, you know, this is some kind of conspiracy by the the Ethereum Foundation to undermine Bitcoin. To be clear, the paper also goes through all of the many risks that Ethereum faces. It's just that Ethereum is much more proactive and has determined that they'll upgrade by twenty twenty nine.
Yeah, it was interesting they I think the fact that they brought Justin Drake into this, um, was controversial for some of the Bitcoiners, that they thought that, hey, here's an Ethereum guy that's just pointing out all the flaws in Bitcoin but Look, it's going to impact every single blockchain. I guess with the exception of like three blockchains, two of which I'd never seen.
Yeah, I un as my understanding that Algrand is already post quantum, is that right?
I think Algorand is and then there's a couple of others um that are just very small blockchains.
Yeah. So I'll tell you what's gonna happen here. Uh I mean basically every blockchain, Ethereum, Solana, just go down the list. re engineer themselves to strip out elliptic curve cryptography and other dependencies. It's not just ECC, it's BLS signatures. By the way, the B in BLS is Dan Bennet, who was on the paper. it's uh starks or no it's snarks that are exposed. I mean it's all genres of cryptography.
All these blockchains see the threat they will upgrade. I think in time. Google has set the deadline of twenty twenty nine. The US government has set a window of twenty thirty to twenty thirty five. I think Bitcoin will have to be dragged kicking and screaming. But I think they'll do it too. I just what I worry about is being caught a little bit too late where we realise, okay, this thing is coming in a year. We have one year to upgrade Bitcoin. That's a situation we don't want to be in.
I mean you're talking about some pretty white knuckle experiences if you're self custodying and then you're also talking about some just i I wouldn't say Herculean'cause i it's not rocket science to move assets from one address to another, but these custodians It's gonna be a lift here, right? I mean, they're just gonna have to move all the assets, you're gonna have mempools backed up. It's gonna be really hard to use these blockchains during that.
¶ Institutional Power & Satoshi's Coins
Yeah, I will. And it would be something like forty consecutive days of full blocks to get their uh best case. So and one thing I think ordinary Bitcoiners don't understand and I actually think the Bitcoin developers don't understand this either. We are not in the same situation as we were in 2017 when we had the block size wars. It's wildly different. The Bitcoin blockchain is intermediated and
institutionalized. So there are now huge multi billion, hundred billion dollar institutions that are fiduciaries. They have client capital in Bitcoin that they manage for them. They have legal obligations, they're clients. When faced with a r existential risk like this, they cannot accept that the Bitcoin could go to zero overnight. That's a huge liability on those institutions. They have two choices. One, they can delist Bitcoin, just eliminate that uh product line entirely.
They probably don't want to do that. The other thing they can do is push for a change. And I don't think Bitcoiners would like what that would look like. You know, to have fifty top institutions tell the developers Do you guys need to do this or elevate a new group of developers, right? That's not gonna be a pleasant experience, but it's necessary. So it's either delist or force through a change. There's no passive option there.
Yeah. Yeah, I I think you're gonna find that the asset managers and the custodians and the exchanges end up having a a lot of power here. I think Sailor to some degree will have quite a bit of power as well, just based on how much of the circulating supply he owns.
Yeah, and Sailor has already said that it you know If Bitcoin needs to upgrade, it should. He's also given his view on what should happen at the Satoshi coins. I think that's actually gonna be the most controversial thing in the end is what happens to the Sosho Satoshi coins. That's why I want us to start the discussion now. Cause that's a gonna be a very fraught debate.
What do you th where do you think the community is on Satoshi's coins? And maybe I'll just bring this back a level. So Bitcoin, once people get their act together, will upgrade the protocol to post quantum cryptography. Life goes on. But the old addresses that don't do that migration are are screwed, right? So th those coins will be quantum vulnerable. And our assumption is that Satoshi is dead and so you're gonna have a million Bitcoins or so that are kind of left in the old version of Bitcoin.
And so what do you do with them?
Among institutions it's obvious it's the Satoshi coins should be zeroed out, or you can actually do it less. Uh specifically you can do it more indiscriminately. You can just let people upgrade and then after a certain point disallow all legacy signatures, which would effectively zero out the Satoshi coins. So that is what basically every institution wants to do. Now, the Bitcoin holders, the Bitcoiners, they're more mixed. I guess you many of them are on the side of
Well, let the chips fall and whoever gets the quantum computer, they get the coins, finders keepers. There's actually a lot of people with that view. And they're more driven by the ideology and Bitcoin property rights should be never compromised. We should never intervene in the protocol. So you actually gotta fight around that.
I don't think it's gonna be much of a fight. I think ultimately most Bitcoiners want the price of Bitcoin to go up and the easiest way to think about that is just killing these coins. And so you're gonna have a protocol with So my guess is the protocol ends up having below nineteen million coins at the end of the day.
¶ Satoshi's Coins: Maritime Law Precedents
Yeah, there is another possible way for this to go, which I've been doing a lot of research into maritime law and uh case law around shipwreck recovery. So it's pr pretty fascinating, actually. I I strongly recommend you look into it. I think it's possible that we end up with um the application of basically salvage law, whereby identity with the court or government's approval
salvages the coins, so recovers them quantumly, but holds them in trust. So they don't uh take ownership of the coins. So this is actually how it works with a shipwreck for the most part. you can identify and salvage valuables from a shipwreck, but they don't become yours. They actually belong to whoever the freight uh uh belonged to. You know, so there was uh a very famous case with this.
Spanish uh ship uh the Nuestra Signora. It was sunk in eighteen oh four, five hundred million dollars was recovered from it. What do you think happened to the five hundred million dollar cargo?
Uh I it was taken by the people that recovered.
No. Spain claimed it. All of it. Even though the coins were on a ship that belonged to the Spanish Empire, which is an empire that no longer exists. The courts found that there was an unbroken ownership claim over two hundred years. Wow. Which is incredible.
That's incredible.
Yeah. So abandonment is very hard to prove over even over two hundred years. So Um but more likely I think what would happen would be the salvor, the entity that recovers the coins, gets a salvage award. And sometimes these awards are, you know, ten percent of the value of the cargo. There's a famous case in the eighties, um, the SS Central America. This guy Tommy Thompson, he dug it up in nineteen eighty eight. He got ninety percent
So he was awarded ninety percent of the value of the cargo. Uh he the uh insurers that insured the ship in the nineteenth century sued him. So the descendants of those insurers.'Cause they pet out the insurance claim when it sank in eighteen fifty seven and they sued him and they said, Well, actually we we deserve the coins'cause we paid out the claims, so it's technically our property. Uh but it this guy Tommy Thompson actually kinda won the case. So the Salvor in that case got the coin.
That's interesting. I mean I think about it a little bit differently. I think you know, Satoshi owned real estate on a network called Bitcoin and the post quantum Bitcoin will be a new network. it will look very different. And so he will not own real estate on that new network.
Yeah, it's a tough one. I mean it's gonna be one for the Supreme Court probably if it happens that way. My suspicion is eventually the US government would authorize a salvage mission. So they legally authorize an entity to do this. And then that um Salvor would get some award and the rest of those coins would be held in trust for Satoshi if they were to return. Ah.
¶ Drift Protocol Hack & Regulatory Scrutiny
I I'm still in the camp. It's I don't think we're All right, let's talk about uh drift protocol. So this is one of the largest perpetual futures exchanges in the Solana ecosystem. This is a tough story. So they were hacked this week for about$280 million. This happened on Wednesday afternoon. Uh in a Twitter post, uh Ledger CTO Charles Guimet speculated that the attack method looked very similar to the Bybit hack.
Uh that was a one point five billion dollar loss. It was widely speculated to be North Korea. This is just a this is a tough one here.
Yeah, this one is super problematic. I I mean, to me, I don't know if you noticed, but there are a lot of uh conventional hacks in the last week. Uh data breaches. I think AI is getting good enough to do exploitation. I don't know if AI had anything to do to with this one. It looks like North Korea. The tragedy is that a lot of these coins went through USDC and Circle did not freeze them.
Well, they went through USDC like um immediately. I don't I don't think they were alerted in time. I think they would have frozen them if they saw it, but this happened in the blink of an eye.
Yeah, that is um a really tricky one. Well quite a bunch of other uh pieces of news. The CFTC and the DOJ filed a lawsuit in three states. arguing that those states officials are going beyond their jurisdiction in attempting to regulate prediction markets.
So I did something this week. I listened to a podcast with Gary Gensler. I I must confess. Wow. It's called Power and Consequences.
What did what did old Gary have to say?
You know, turns out Gary is not a big fan of the prediction. And
Shocked to hear that.
He thinks we're gonna head for a Supreme Court case around sports gambling, um with the states and He didn't really come out and say he thinks the states are gonna win, but that's clearly what he thinks. He doesn't think that the CFTC is going to have oversight of sports games.
It it does make me think that if someone like Gensler, I I don't think he would come back as the head of the SEC or the CFTC, but he could certainly come back as a member a senior member of an administration here, uh having some oversight of financial services. Probably not a Senate confirmed role, i is my guess. But it does make me think that the prediction market players are going to be i in some hot water here if the administration flips Democrat.
¶ Mainstream Adoption and Policy Shifts
Yeah, it's gonna be a knife fight. Coinbase received conditional approval for their national charts trust charter from the OCC. They joined a growing cohort of crypto companies including Circle, Ripple, Fidelity, Paxos, and BitGo.
Yeah, and also EDX Markets, which is a digital asset trading venue. It's backed by Citadel. They filed an O C C application. They want to have a trust bank charter to do custody and settlement on their platform as well. So This O C C path is uh more and more popular.
And it makes sense, right? Uh you don't wanna have these state by state money transmission uh licenses. You wanna be able to just go to one regulator. These things ought to have been federally regulated from the outset. So good to see that that door open. Um did you see Morgan Stanley's Bitcoin ETF?
Yeah, the m Morgan Stanley has done so much, uh maybe the most of any uh legacy or conventional asset manager in terms of Bitcoin recently. They've announced their Bitcoin ETF with a expense ratio of fourteen basis points. This is I think this would be the cheapest one on the market.
Yeah, it's it's definitely below uh Black Rock's IBIT, which I think was the cheapest one before that. So Kind of makes sense for Morgan Stanley, right? They have that huge private wealth platform and they can just push their own product through that channel. Um, makes a good deal of sense.
Yeah, I've been incredibly uh impressed by what they've done, uh especially since Amy uh took over there. Uh in dat news this week, David Bailey's Nakamoto Holdings The embattled Nakamoto holdings, they have sold twenty million in Bitcoin this week. That's five percent of their treasury, and that's at a forty percent loss uh relative to their entry price.
Why would you do that?
I'm guessing to pay down some debt.
These debts were gonna buy Bitcoin and not sell it at forty percent losses. That just seems like a It's not why you buy a dad.
Yeah, I mean you get these headlines every week now. I think last week it was Marathon. This is the problem with the dots is it's not just one directional. So people think it's they can only eat the coins and never spit them out, but they just get in over their skis. And we talked about this when they started buying the bitcoins. So this was a hundred percent predictable. And some of the more levered dats are now having a D lever.
These are some of the times where you don't want to be on a public board because you're gonna have a lot of upset shareholders in a situation like this. Um in other news, uh Senators Cynthia Lumis and Bill Cassidy introduced a new bill. It's called the Mind in America Act. It has the goal of onshoring Bitcoin mining. Um It's pretty interesting. I d I didn't really realize that that was a national priority, but all right, why not?
Yeah, the bill also attempts to codify Trump's strategic Bitcoin reserve from his executive order. I don't know if there's enough political capital in Washington right now to do Bitcoin stuff, but we'll keep an eye on this one.
But wasn't the strategic reserve is just an EO. So uh do you need congressional approval to do anything? If if the whole goal of the EO was, hey, with all the criminally seized Bitcoin, we're just not gonna sell it, uh that's fine, right?
Yeah, I'm a little muddy on the details. I think anything concerning the purse strings requires Congress. And you know what, we never got the audit of all the Bitcoin holdings. And I think that's because they lost some of the Bitcoin. Like uh
There's Bitcoin ever.
The Bitcoin has been lost. Like there was that kid of the guy who was custodying some of the Marshall's Bitcoin and he just absconded with the coins.
He took forty million bits. Forty million dollars for the year.
Yeah, I think their vendor selection process is lacking here.
¶ Agentic Payments & Prediction Market Future
Yeah, we ha we have custodians. Maybe for holding Bitcoin, just use a custodian and not some like government contractor out of like Alexander.
Yeah, there's established companies that do this professionally. Uh next up in news, the Linux Foundation allowed announced the launch of the X four oh two Foundation. So that's governing body for the X four oh two protocol. That's an agentic payment protocol. developed by Coinbase. Uh this is supported by Coinbase, Cloud, Flare, and Stripe. Pretty exciting actually. Uh there have been some meaningful flows uh in these types of payments already actually.
Did you see that um some of the source code for one of the Cloud models was released this week, accidentally? D did you see it had um stablecoin payments baked into it?
Had like a jet technique.
Yeah. Yeah, so this is not like a public thing yet, but it looks like some of these L L L's are gonna start to do payment.
Yeah, I mean I think this is the biggest race in all of payments right now is trying to be the protocol or the standard for genetic payments and I don't know, I think maybe Stripe is in the lead.
Stripe s seems like they'd be in the best position, maybe outside of the model providers. I mean, do you think that the model providers ever try to get into financial services?
It seems like the kind of thing OpenAI would want to do.
Well, OpenAI just bought a media brand.
They did, they bought T V P on what a ride those guys have been on.
You know, we're we're not for sale yet, but you know T BPN that's a pretty good combo.
Yeah, I mean uh I assume that's a nine figure exit, so we would definitely consider selling on the brink.
We'd we'd consider it but I don't know. We're trying to take this take this to the next level.
We have bigger ambitions. Uh Square has enabled Bitcoin payments for millions of US merchants with 0% processing fees.
Yeah, that's pretty interesting. Other news story here, Paradigm, the Crypto Venture Fund and Hedge Fund, they're the backer one of the backers of CalShi. They're building their own prediction market aggregation trading trend. That was kind of interesting. I wonder if that will discriminate on order flow or if it'll, you know, see every venue or or just the ones that they're backers of.
Yeah, this is becoming a pattern for paradigm and uh our good friend Arjun uh Balogy is actually running that product.
I saw that. Yeah, congrats to uh art. A lot of these um kind of aggregators, it'll be interesting to see what the retail experience looks like. Obviously now you can trade prediction market stuff on Coinbase and uh I think crack it now too, right? Uh of course you can do it on Robinhood.
Yeah, I'm a little puzzled as to how the aggregators will work because the markets are codified differently on each platform. So there's no consistency, you know, across how a market will be defined. And parametri paramet parameterized. Um you know, between Calci and Polymarket and so on. So I don't know how the aggregators are gonna deal with that.
Yeah, I think you know, in traditional finance you'd have this like security master file and you'd know the attributes of a stock and you know how many units there are, what the various share classes are. Uh nothing like that exists in prediction markets because you could say all right, will the price of Bitcoin be a hundred thousand on June fifth?
Or will it be a hundred thousand on June fifth on another platform, but it's actually marked as Eastern Time versus Pacific time or something, right? So there's there's these minor discrepancies.
Yeah, and it you know, I think about options markets, you know, so there's m more variables, right? Obviously with option markets that are discrete and you have different strike prices and you have different expers. And those are the very simple when you you you think about a prediction market. It's like will the US invade
Iran by X state, what does invasion mean? Uh, now there's a different market, which is will the US bomb Iran? Different XPR, so The option markets are already very fragmented and that's the biggest issue with them is they're low liquid, so it's just this on steroids when it comes to prediction markets.
Yeah. It the other problem, not to kind of point out all the problems here,'cause I think these are obviously very popular, but the clearing of these contracts is a huge issue. And so you don't have big DCOs um that are clearing these trades. And so that that leads me to believe that market makers are going to only co collaborate with like one or two venues.
Where they can have that experience. Otherwise it's just way too complicated. So I the market structure doesn't really lend itself to their being ten of.
Yeah, so we'll keep watching that one for you.
All right, so I think that's it for the week. Uh a lot of quantum talk this week. I'm sure there'll be a lot of quantum talk uh next week. Good luck in the trenches there with all those big
Yeah, you know, I've grown to love it, actually.
Alright, we'll keep up the good fight. All right, everyone, have a safe and healthy weekend and we will see you on
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