[Bitcoin $0 Controversy②] "$0 is an Exaggeration"... Reasons Wall Street Disagrees

[Block Media Reporter Myung Jeong-seon] Wall Street has countered the warning from Silicon Valley investor Chamath Palihapitiya, founder of Social Capital, that Bitcoin (BTC) will ultimately lose its value due to quantum computer attacks. While there is a possibility that quantum computers could threaten Bitcoin's security system, the argument is that there is still time to respond before actual attacks become feasible. The analysis suggests that as banks and institutional investors enter the Bitcoin market, the economic incentives to solve security issues have also increased.

According to the digital asset industry on the 26th, Wall Street investor Jordi Becerra strongly criticized Palihapitiya's forecast of Bitcoin's value extinction during a podcast released on the 24th by Anthony Pompliano. He described the claim that Bitcoin will eventually become $0 as "completely a joke."

Earlier, Palihapitiya had argued that Bitcoin could be hacked in the long term, leading to a loss of value. He expressed particular concern that while a new cryptographic system is needed to counter quantum computers, it would be difficult for the Bitcoin community to agree on technological changes.

"The Threat of Quantum Computers is Real... But There is Time to Respond"

The first counterargument presented by Becerra is the practical limitations of quantum computer development.

Quantum computers are devices that calculate in a different way than traditional computers. If sufficiently powerful quantum computers are developed, they could potentially undermine the security of some digital signature systems currently used in Bitcoin transactions. Digital signatures are technologies that mathematically prove that Bitcoin holders have the authority to send their assets to other addresses.

The issue is that there is a significant technical gap between theoretically possible attacks and those that can actually be executed.

Becerra explained that for quantum computers to advance, both software and physical hardware issues must be resolved. It is difficult to maintain the quantum states used for calculations reliably, and technology to reduce errors is also needed. This means that simply because artificial intelligence (AI) performance improves, it does not mean that a quantum computer capable of decrypting Bitcoin security will emerge immediately.

He noted that while some experts expect a practical threat within 5 to 7 years, Adam Back, CEO of Blockstream, believes it could take 20 to 40 years. Becerra argued that even if one conservatively assumes 7 years, there is still time to prepare a response.

However, the figures of 7 years or 20 to 40 years are not confirmed development timelines. Given the difficulty in accurately predicting the pace of quantum computer technology development, one cannot definitively conclude that the Bitcoin network has secured sufficient time.

"Banks Have a Reason to Protect Bitcoin Now"... The Interests of Institutional Investors

The second counterargument is the role of financial institutions participating in the Bitcoin market.

Jordi Becerra explained that as banks enter the digital asset business, they have developed a direct interest in strengthening Bitcoin's security. In the past, Bitcoin security issues were primarily concerns for developers and individual investors, but now they have become significant issues for financial institutions that store or provide trading services for related assets.

In fact, as of the 20th, the net assets of the Bitcoin spot exchange-traded fund (ETF) "iShares Bitcoin Trust (IBIT)" managed by the world's largest asset management firm, BlackRock, amounted to approximately $66.9 billion. BlackRock has also recently applied for a new ETF product that mitigates some of the risks of price declines while participating in the recent rise in Bitcoin prices.

Morgan Stanley has launched its own Bitcoin spot ETF in April and is promoting digital asset spot trading services through the eTrade platform for individual investors. This movement aims to expand Bitcoin investment accessibility not only for existing asset management clients but also for general individual investors.

Goldman Sachs and JP Morgan are also participating in the Bitcoin-related financial product market. According to the institutional investor holdings submitted to the U.S. Securities Authority at the end of the second quarter this year, Goldman Sachs reported holding approximately $574 million worth of BlackRock's Bitcoin ETF. Morgan Stanley disclosed holdings of about $549 million, while JP Morgan reported approximately $356 million in the same ETF.

From the perspective of financial institutions, if Bitcoin security issues materialize, both investment product management and customer service could be affected simultaneously. Becerra believes that these changes could accelerate the technological responses of Bitcoin. Contrary to Palihapitiya's doubts about the Bitcoin community's consensus ability, the increasing number of stakeholders could also heighten the pressure to resolve issues.

However, the mere fact that financial institutions have increased interests does not guarantee a technical solution. Bitcoin is not a system operated independently by a specific bank. Implementing new security technologies may require consensus among network participants and actual asset transfers by users.

Ultimately, Wall Street's counterargument is not that there is no threat from quantum computers. It emphasizes the possibility of developing technology and changing the network before the risks materialize.

So, what countermeasures are Bitcoin developers actually preparing? Specific improvements have already been proposed to counter quantum computer attacks, but there are still several challenges to applying them to the actual network.

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