Muneeb Ali - The Frontier of Bitcoin - TOKEN2049 Singapore 2026 — Transcript

Full transcript

1. 0:07Hi everyone.
2. 0:09Muneeb Ali,
3. 0:10founder of Stacks.
4. 0:11Uh, I started in Bitcoin around 2013.
5. 0:15So, I've been building on the frontier
6. 0:17of Bitcoin for almost like 13 years at
7. 0:20this point. And today, I'm going to talk
8. 0:23about the frontier of Bitcoin.
9. 0:25What are the challenges that we as the
10. 0:27Bitcoin community needs to work on and
11. 0:30overcome in the coming years. But before
12. 0:33I start, I'm going to share a little
13. 0:35story, and this is the first time that
14. 0:38I'm publicly talking about it.
15. 0:42So, what is the story?
16. 0:43I live in New York. Um, I'm just walking
17. 0:46around one of the days on the streets of
18. 0:48New York, and I bump into an old friend.
19. 0:52This guy has been in crypto for a very
20. 0:54long time, but is not really in Bitcoin.
21. 0:56He focuses more on other chains.
22. 0:59Um, and he he's like, "Hey, I've I've
23. 1:01been I've been meaning to talk to you.
24. 1:03I'm very concerned about AI-assisted
25. 1:08security problems with blockchains."
26. 1:11And he wanted to learn from me that what
27. 1:12is Bitcoin doing about it, right?
28. 1:14And
29. 1:15I was like, "Dude, I'm actually
30. 1:17concerned about it as well, and I don't
31. 1:20think Bitcoin is doing anything about
32. 1:21it." And that was a scary thought. Like,
33. 1:24this is this is pre sort of like me
34. 1:26those like this sort of like, you know,
35. 1:286 months back. And the more we started
36. 1:31talking, we realized that if a frontier
37. 1:34model
38. 1:35actually finds a bug in Bitcoin core,
39. 1:40it's over for most of us,
40. 1:42right? It doesn't matter what blockchain
41. 1:44you work on, it doesn't matter what your
42. 1:45project is, whatever you're doing, if
43. 1:48Bitcoin nukes,
44. 1:50it's this industry would get a massive
45. 1:53massive hit. Like, much worse than what
46. 1:56happened on 10/10 last year.
47. 1:59So, I I start freaking out a little bit.
48. 2:01Uh I had to run. I'm now sitting in an
49. 2:03Uber. And I am
50. 2:05part of a bunch of these Bitcoin OG
51. 2:07groups. And I start sort of like texting
52. 2:10everybody. So, imagine these are people
53. 2:12from like who got into Bitcoin in like
54. 2:132011, 2012, 2013. Uh like they're
55. 2:17different classes. Some of the largest
56. 2:19companies, the CEOs, uh folks. And I'm
57. 2:22basically asking people, "Hey, do we
58. 2:23have contacts to Entropic? Can we get
59. 2:26access to Methuselahs to make sure that
60. 2:28there is no bug there?"
61. 2:30And
62. 2:31I'm realizing that actually no one not
63. 2:34only that nobody has done this,
64. 2:36no one had access to Entropic.
65. 2:40And I am sort of like one of those few
66. 2:42people who are losing sleep where most
67. 2:45of the Bitcoiners are not that worried
68. 2:46about it. Long story short, we got
69. 2:49access to Methuselahs when it was still
70. 2:51private. We actually ran the frontier
71. 2:54models on Bitcoin Core. And thankfully,
72. 2:57Bitcoin Core actually came out to be
73. 2:59clean.
74. 3:00If that didn't happen, like I remember
75. 3:02the Zcash bug that was discovered when
76. 3:05with with Opus. And Opus is actually not
77. 3:07even that advanced of a model. And and
78. 3:09Zcash dropped like 30% in one day and
79. 3:11and then recovered. Something like that
80. 3:13happening to Bitcoin is bad for
81. 3:15everybody.
82. 3:16The next thing that we had to do was
83. 3:19frontier models, they keep improving all
84. 3:21the time. So, it doesn't matter that you
85. 3:23ran the code base once on a on a
86. 3:25specific model. You have to do it all
87. 3:27the time. So, now we have we have got
88. 3:30our act together a little bit. I won't
89. 3:32name the companies, but there are
90. 3:33basically two, three companies that have
91. 3:36access to all of the frontier models.
92. 3:37And they're actively running Bitcoin
93. 3:39Core against those models when when that
94. 3:42comes up. So, with that background in
95. 3:44mind that how close we were in terms of
96. 3:47something happening to Bitcoin and us as
97. 3:50an industry actually taking a collective
98. 3:53hit on it, let's talk about the frontier
99. 3:56of Bitcoin, especially in the light of
100. 3:59AI.
101. 4:00Open AI just dropped a bunch of like
102. 4:02math problems literally yesterday. So,
103. 4:05the world has changed and we have to
104. 4:07evaluate what the frontier of Bitcoin
105. 4:09looks like and what are we going to do
106. 4:11about it. So, I'm going to I'm going to
107. 4:13basically talk about three things. One
108. 4:15is Bitcoin capital markets. Why are
109. 4:18on-chain Bitcoin capital markets
110. 4:20important? I'm going to talk about
111. 4:21privacy. Why privacy becomes more
112. 4:24important for Bitcoin and the biggest
113. 4:27elephant in the room, which is the
114. 4:29post-quantum threat that we have for
115. 4:31Bitcoin. So, let's start over. Here's
116. 4:34the situation with Bitcoin right now.
117. 4:37It is clearly a store of value.
118. 4:40A lot of institutions and large players
119. 4:43have sort of like accepted Bitcoin and
120. 4:45they're holding Bitcoin. But, look at
121. 4:47the small number over there.
122. 4:48Like less than 0.5%
123. 4:51of BTC is actually actively deployed
124. 4:56anywhere.
125. 4:57Right? It's not It's not earning any
126. 4:59yield. It's not doing anything. It's
127. 5:01basically just sitting there. And that's
128. 5:04actually an opportunity. If you're a
129. 5:05developer, if you're a builder and you
130. 5:07see an asset class which is around $1.5
131. 5:09trillion,
132. 5:11but the bulk of it is actually not doing
133. 5:13anything, that means there's a large
134. 5:15opportunity here. What's the
135. 5:16opportunity? It's to deploy Bitcoin
136. 5:18capital. A lot of people talk about
137. 5:20Bitcoin in comparison to gold, that is
138. 5:23digital gold. At some point, you know,
139. 5:25we're going to be 10% of gold market cap
140. 5:28or or 40%, 50%, whatever your Bitcoin
141. 5:31price target is.
142. 5:33What I think is if Bitcoin actually has
143. 5:37a yield and there are active capital
144. 5:39markets, Bitcoin can actually be bigger
145. 5:41than gold. Because gold doesn't have any
146. 5:44income. It doesn't have any yield. So,
147. 5:47the real opportunity for Bitcoin to
148. 5:49actually flipping gold and becoming a
149. 5:51much bigger asset is if we can figure
150. 5:54out how Bitcoin can be income
151. 5:57generating. Because a yield-bearing
152. 5:59asset actually becomes a foundation of
153. 6:03financial markets, and you can actually
154. 6:05build entire financial markets around
155. 6:07it.
156. 6:08So, how does that happen?
157. 6:10There are two things.
158. 6:11Most people who have used Ethereum,
159. 6:13Solana, or any other blockchain, they're
160. 6:16used to staking. They know that they can
161. 6:18lock their asset, and they can start
162. 6:20getting a yield on it. Even if you look
163. 6:22at the last cycle, what happened was a
164. 6:24lot of large institutions and public
165. 6:27treasury companies or large ETFs, they
166. 6:30came in and now they have Bitcoin. The
167. 6:32biggest difference between a large
168. 6:35player like Saylor with strategy or
169. 6:38BlackRock's Bitcoin ETF versus the
170. 6:41Ethereum ETFs or Solana ETFs is
171. 6:44Bitcoin people can't earn any income on
172. 6:48their BTC right now.
173. 6:50Right. So, whoever figures out any form,
174. 6:53any variation of staking like native
175. 6:56native yield for Bitcoin is going to be
176. 6:58a big big deal.
177. 7:00And the second thing is credit. People
178. 7:02don't want to sell their Bitcoin.
179. 7:04They want to hold it. They don't want to
180. 7:06get a tax hit. And and they're long-term
181. 7:08holders for Bitcoin generally across the
182. 7:10board.
183. 7:11And what they do want to do is use
184. 7:14Bitcoin as collateral and take loans
185. 7:16against it.
186. 7:17Those are the two big things that if we
187. 7:19get that right, we can actually start
188. 7:22Bitcoin capital markets. If you compare
189. 7:23that to normal markets, you have money,
190. 7:26you have the dollars, and and then you
191. 7:28have the rails and the and the capital
192. 7:30markets around it, which leads to a
193. 7:32productive asset. And we need the same
194. 7:34thing for Bitcoin, which is which is one
195. 7:36of the frontiers, and we are actually
196. 7:38doing a bunch of work on it.
197. 7:40The second frontier is privacy.
198. 7:44You guys might have seen Zcash, a lot of
199. 7:47people working on it. I'm I've I've
200. 7:49known Zuko for a while. I'm a supporter
201. 7:51of Zcash. But having Zcash doesn't mean
202. 7:54we don't need privacy or some form of
203. 7:57privacy on Bitcoin.
204. 8:00Especially now that we have AI, it is
205. 8:03extremely easy for anyone to just run
206. 8:08all the data that is public on the
207. 8:09Bitcoin blockchain and figure out who's
208. 8:12doing what. And I think this is
209. 8:14something that institutions are now
210. 8:16becoming more aware of. We're likely not
211. 8:18going to see privacy on the Bitcoin L1.
212. 8:21So, it's likely going to happen on an as
213. 8:23another layer on top of Bitcoin, which
214. 8:25is If this is a spectrum and Zcash is on
215. 8:28one end of the spectrum in terms of
216. 8:30strong privacy, I think what we can do
217. 8:33is we can offer some sort of practical
218. 8:35privacy
219. 8:37or institutional privacy with different
220. 8:40sort of like layers
221. 8:41for for BTC. And it's going to be a big
222. 8:44frontier for Bitcoin because Zcash is a
223. 8:47potential alternate store of value that
224. 8:50has certain properties that Bitcoin
225. 8:52currently doesn't have. And anyone who
226. 8:53does a bunch of work on Bitcoin actually
227. 8:56enables private BTC, I think it's going
228. 8:58to be going to be a very very valuable
229. 9:01thing to do.
230. 9:03The third frontier is actually
231. 9:05post-quantum.
232. 9:07Before I get into to post-quantum,
233. 9:10I would want to link this back to the
234. 9:12earlier mythos story that I was talking
235. 9:14about.
236. 9:16Basically, it doesn't matter, in my
237. 9:19view, if other blockchains figure out a
238. 9:22post-quantum upgrade.
239. 9:24Because if Bitcoin doesn't figure it out
240. 9:27and someone actually steals Satoshi's
241. 9:30coins or other large amounts of Bitcoin,
242. 9:33it hits all of us. It hits the entire
243. 9:36industry. So, Bitcoin's post-quantum
244. 9:39upgrade is not a Bitcoin problem. It is
245. 9:43our problem collectively as an industry,
246. 9:46and we'll need to figure out figure out
247. 9:48a solution for it.
248. 9:49Bitcoin's problem is
249. 9:51actually worse than other chains because
250. 9:54Bitcoin is very decentralized. There are
251. 9:57all sorts of politics around Bitcoin
252. 9:59development. It's hard to get community
253. 10:02consensus around what's the what the
254. 10:04upgrade should look like. And
255. 10:06what it makes especially challenging is
256. 10:08that Bitcoin takes a very, very long
257. 10:11time for doing any upgrade. If we think
258. 10:14quantum computers are going or we need
259. 10:15to be quantum ready by 2030, Bitcoin
260. 10:18takes on average 2 years plus to do even
261. 10:21a small upgrade. When they did the
262. 10:23SegWit upgrade or the Taproot upgrade,
263. 10:25takes like 2 years.
264. 10:27Then, Bitcoin's capacity is so limited.
265. 10:30It's going to take something like 2
266. 10:32years to even move the assets.
267. 10:35So, imagine 2 years for an upgrade, 2
268. 10:37years to move the assets, which means
269. 10:40that if you're not getting our act
270. 10:41together right now, we're already
271. 10:43entering a yellow/red zone for Bitcoin's
272. 10:47quantum upgrade
273. 10:48right now.
274. 10:50One thing that most people don't
275. 10:52realize, this is right right now we're
276. 10:54trying to get Bitcoin to upgrade. We're
277. 10:55we're trying to reach post-quantum. As
278. 10:57soon as we do the upgrade, Bitcoin's
279. 11:00capacity is going to get slashed by up
280. 11:03to 97%.
281. 11:05So, Bitcoin does because those
282. 11:06signatures are so big, right? So, if
283. 11:08signatures are really, really big, you
284. 11:09can't transact on Bitcoin anymore. So,
285. 11:11not only we need a quantum upgrade, we
286. 11:14also need another layer on which most of
287. 11:17the Bitcoin transactions would happen in
288. 11:19a post-quantum world.
289. 11:22And all of this should happen all these
290. 11:24solutions should be secured by Bitcoin
291. 11:27by Bitcoin's hash power. All the economy
292. 11:30of the Bitcoin capital markets should
293. 11:32run in BTC and it should be
294. 11:34decentralized. People should be
295. 11:37owners of their own keys and should be
296. 11:39able to use it on chain in a fully
297. 11:41decentralized ways. These are these are
298. 11:43some of the principles that we're
299. 11:44looking at.
300. 11:45Where is this already happening? Stacks
301. 11:48is the largest Bitcoin project out
302. 11:51there. Think of this as
303. 11:53Bitcoin is old and clunky. It's very
304. 11:57very hard to change it and Stacks is a
305. 12:00new rails for BTC where Bitcoin can be
306. 12:03cheaper, faster, programmable and we can
307. 12:06actually move much faster to do an
308. 12:09upgrade for stealth addresses, to do an
309. 12:11upgrade for post quantum and even try to
310. 12:14influence Bitcoin core development as
311. 12:16well
312. 12:17to make sure that whatever support we
313. 12:19need from Bitcoin core can actually be
314. 12:22there.
315. 12:22So for Bitcoin capital markets, one of
316. 12:25our focus has been enabling BTC yield.
317. 12:28So you can actually lock your Bitcoin in
318. 12:31a self-custodial way
319. 12:33and earn a 3% yield on BTC. And this
320. 12:36product is very recent. It actually just
321. 12:38came out in the last couple of weeks and
322. 12:41we've been been seeing an insane
323. 12:43interest on it because remember all of
324. 12:45these large treasury companies, ETFs,
325. 12:49they're sitting on billions and billions
326. 12:50and billions of Bitcoin and no real way
327. 12:53of earning any income. And that's a
328. 12:55healthy thing for Bitcoin because it's
329. 12:57the first signs of people actually
330. 12:59deploying their capital on chain and
331. 13:02once capital starts flowing, you start
332. 13:04seeing second order effects of it
333. 13:06because now people might want to do
334. 13:08looping around this and and boost their
335. 13:10yield. They might want to use the same
336. 13:12collateral and take stablecoin loans.
337. 13:14The kind of on chain activity that
338. 13:17you've been seeing on Ethereum and
339. 13:18Solana, it's finally coming to Bitcoin
340. 13:22and we are we're we're super excited
341. 13:23about that.
342. 13:25So to recap
343. 13:27the frontier of Bitcoin in my view is
344. 13:30on-chain capital markets,
345. 13:33it's privacy,
346. 13:34and it's post-quantum.
347. 13:36And Stacks is doing a work on all of
348. 13:38these. Right now, we are focused on
349. 13:40on-chain capital markets, and in our
350. 13:42road map, we're doing a ton of work on
351. 13:44on privacy and post-quantum as well. And
352. 13:48with AI models, all of this actually
353. 13:51accelerates very, very quickly. This is
354. 13:54not something that we can just sit on,
355. 13:56that yes, let's wait for the next 2 3
356. 13:58years and figure out what is going to be
357. 14:00Bitcoin's post-quantum solution, or what
358. 14:02is going to be Bitcoin's privacy
359. 14:04solution. This is a today and a now
360. 14:06problem, and we are at the frontier of
361. 14:08it. Thank you.
362. 14:10Thank you very much.