Google suggests quantum computing may compromise Bitcoin’s security sooner than anticipated.

Also: OpenAI secures $122 billion, cryptocurrency ecosystems diverge on post-quantum strategies, and Base’s roadmap for 2026.

What to know:

Welcome to The Protocol, CoinDesk’s weekly summary of the most significant developments in cryptocurrency technology. I’m Margaux Nijkerk, a reporter for CoinDesk.

In this edition:

• Google suggests breaking Bitcoin with quantum technology may be less challenging than previously believed, attributing part of the issue to Taproot
• OpenAI secures an unprecedented $122 billion as its revenue surpasses $2 billion per month
• Insights into how Bitcoin, Ethereum, and other networks are gearing up for the impending quantum threat
• Coinbase’s Base plans to concentrate on tokenized markets, stablecoins, and developers this year

Network News

GOOGLE INDICATES BREAKING BITCOIN IS LESS CHALLENGING THAN ONCE BELIEVED: According to Google’s Quantum AI team, breaking the Bitcoin blockchain using quantum computers could be easier than previously thought, with Bitcoin’s Taproot technology, which facilitates more efficient and private transactions, potentially contributing to this perception. The team noted that the computational power needed to compromise Bitcoin’s security may be considerably lower than earlier estimates, prompting new concerns about the timeline for quantum threats. A recent whitepaper revealed that breaching the cryptography utilized by Bitcoin and Ethereum might necessitate fewer than 500,000 physical quantum bits, or qubits, significantly less than the “millions” often referenced in recent discussions. Google has previously identified 2029 as a possible target for functional quantum systems, emphasizing the importance of migration before that time, which makes the paper’s conclusions regarding the reduced computing power required for attacks particularly relevant. Quantum computers operate with qubits instead of conventional bits and can tackle specific problems at a much faster rate than current machines. One such problem involves dismantling the encryption that secures cryptocurrency wallets. Google outlined two potential attack strategies, each demanding approximately 1,200 to 1,450 high-quality qubits. This is a small fraction of earlier projections, implying that the disparity between existing technology and a feasible attack may be narrower than investors anticipate. The findings also describe how such an attack could be executed in practice. Instead of targeting older wallets, a quantum adversary could focus on real-time transactions. When a bitcoin transfer occurs, a data element known as a public key is temporarily exposed. A sufficiently rapid quantum computer could leverage this information to derive the private key and reroute the funds. — Sam Reynolds Read more.

OPENAI SECURES RECORD $122 BILLION: OpenAI, a leader in artificial intelligence, has successfully raised $122 billion in committed capital at an $852 billion post-money valuation, a funding round that far exceeds any previously raised in private markets, establishing the company as the most valuable startup in history by a significant margin. The investment was primarily supported by Amazon, Nvidia, and SoftBank, along with ongoing contributions from Microsoft. SoftBank co-led the round together with a16z, D.E. Shaw Ventures, MGX, TPG, and accounts managed by T. Rowe Price. The list of investors includes major global players such as BlackRock, Blackstone, Fidelity, Sequoia, Temasek, Coatue, and ARK Invest. For the first time, OpenAI allowed individual investors to participate through banking channels, raising over $3 billion from this segment alone. OpenAI reported generating $2 billion in monthly revenue, an increase from $1 billion per quarter by the end of 2024. ChatGPT boasts over 900 million weekly active users and more than 50 million subscribers. The company claims six times the monthly web visits and mobile sessions compared to the next largest AI application, and four times the total time spent across all other AI applications combined. — Shaurya Malwa Read more.

HOW BITCOIN, ETHEREUM, AND SOLANA ARE PREPARING FOR Q-DAY: As quantum computing approaches practical application, the cryptocurrency sector is starting to address a long-avoided question: what occurs if the cryptography supporting trillions of dollars in digital assets becomes ineffective? The responses so far are quite varied. Within well-known ecosystems like Bitcoin, Ethereum, and Solana, approaches are diverging based on common themes: strategies for social consensus and technical advancements, with community members divided between caution and urgency. Quantum computing represents a fundamentally distinct method of computation that leverages the principles of quantum mechanics rather than classical physics. Unlike conventional bits that represent either 0 or 1, quantum computers utilize “qubits,” which can exist in multiple states simultaneously, a characteristic referred to as superposition, allowing them to evaluate numerous possibilities at once. When combined with another feature known as entanglement, this empowers quantum machines to solve certain complex problems far more efficiently than classical computers, particularly tasks such as factoring large numbers that form the basis of modern encryption. How significant is the threat posed by quantum computing? Consider this: Quantum computers can resolve extremely intricate issues in mere seconds, while the most powerful traditional computing machines, known as ‘Supercomputers,’ would require thousands of years for the same challenges, according to IBM. This highlights the potential dangers to cryptographic networks arising from quantum computing. Google, the developer of Willow, a quantum supercomputer, has set a 2029 deadline to transition its authentication services to post-quantum cryptography, citing advancements in the field. — Margaux Nijkerk Read more.

BASE TEAM ANNOUNCES 2026 ROADMAP: Base, the layer-2 network from Coinbase (COIN), is intensifying its efforts to create what it describes as a “global onchain economy,” detailing a strategy for 2026 focused on markets, payments, and developers. Base is among the most utilized layer-2 networks within the Ethereum ecosystem, having been made available for public use in August 2023. It was initially developed using Optimism’s OP Stack as part of the broader “Superchain” ecosystem, though the project has indicated intentions to distinguish its infrastructure as it expands. In February, the Coinbase team announced that the chain will increasingly depend on its proprietary code. Layer-2 blockchains are constructed atop Ethereum and aim to enhance speed and reduce costs by processing transactions independently while still relying on Ethereum for security. This model has become a vital component of Ethereum’s scaling strategy, facilitating less expensive and quicker transactions without completely shifting activity off the network. However, some Ethereum leaders, including co-founder Vitalik Buterin, have recently hinted at a shift in focus toward enhancing the base layer itself, leaving unresolved questions about how layer-2 networks will integrate into Ethereum’s evolving roadmap. For 2026, Base stated it will concentrate on three primary areas: expanding onchain markets, scaling stablecoin-based payments, and fostering its developer ecosystem—an initiative coinciding with the increasing adoption of onchain trading venues and stablecoins among institutional participants. — Margaux Nijkerk Read more.

In Other News

• Bitcoin has historically been characterized by extreme boom-and-bust cycles, with declines of up to 90% following peak values. However, in this cycle, the drop has been closer to 50%, a change that analysts attribute to the maturation of BTC as an asset class. “The compression of Bitcoin’s drawdowns to about 50% indicates a maturing market structure,” stated Jason Fernandes, co-founder of AdLunam and market analyst, to CoinDesk. “As liquidity deepens and institutional involvement grows, volatility naturally lessens on both the upside and downside,” he added, emphasizing that “at this stage, the narrative shifts from questioning its legitimacy to optimizing allocation.” Fernandes’ remarks respond to Fidelity Digital Assets analyst Zack Wainwright’s post on X Tuesday, where he noted that growth is becoming “less impulsive,” with a diminished likelihood of extreme downside events as Bitcoin matures. — Olivier Acuna Read more.
• In Jack Dorsey’s perspective, the role most vulnerable to the AI revolution is that of the middle manager. In a recent essay titled “From Hierarchy to Intelligence,” co-authored with Roelof Botha, managing partner at Sequoia Capital and an investor in Block, Dorsey argues that the decision to reduce approximately 4,000 of its over 10,000 employees was not merely a cost-cutting measure but a fundamental restructuring aimed at replacing middle managers with AI. The essay contends that corporate hierarchy has always existed to address one issue: managing information flow through organizations too large for any individual to oversee. Managers consolidate context from lower levels, act as liaisons from above, and ensure alignment across teams. The authors argue that AI can now perform these functions continuously and at scale, making traditional management roles obsolete. In lieu of management tiers, Dorsey and Botha propose two AI-driven “world models.” One aggregates internal data from code, decisions, workflows, and performance metrics to create a constantly updated view of company operations, supplanting the context that managers have traditionally provided. The other analyzes customer and merchant behavior using transaction data from Cash App and Square. — Sam Reynolds Read more.

Regulatory and Policy

• Australia has enacted legislation establishing its first comprehensive regulatory framework for digital assets, mandating that cryptocurrency exchanges and custody providers obtain financial services licenses. The Corporations Amendment (Digital Assets Framework) Bill 2025 was approved by both legislative houses on April 1, incorporating firms that manage digital assets on behalf of clients into the existing Australian Financial Services License regime. The legislation introduces two new regulated categories under the Corporations Act: digital asset platforms, which hold cryptocurrency on behalf of users, and tokenized custody platforms, which manage real-world assets and issue corresponding digital tokens. Operators of both categories must secure an Australian Financial Services License from ASIC, aligning them with the same core regulations as brokers or fund managers, which include obligations to protect client assets, provide standardized disclosures, avoid misleading practices, and maintain systems for dispute resolution and compensation. Instead of regulating the cryptocurrency itself, the law focuses on the companies that manage customer funds, aiming to mitigate risks such as commingling, insolvency, and asset misuse that have led to losses in previous crypto failures. — Sam Reynolds Read more.
• Hong Kong has failed to meet its own March deadline for HKD stablecoin licensing, as the Hong Kong Monetary Authority (HKMA) has yet to approve any issuers despite prior indications that the rollout would commence last month. During the Consensus Hong Kong event in February, Financial Secretary Paul Chan Mo-po stated that licenses would begin to be granted in March as part of the city’s initiative to become a regulated hub for stablecoins and tokenized finance. The absence of approvals thus far pushes that timeline into April and raises concerns about the speed at which the framework will transition from policy to actual implementation. “In granting our licenses, we ensure that licensees possess novel use cases, a credible and sustainable business model, and robust regulatory compliance capabilities,” he mentioned at CoinDesk’s Hong Kong conference.— Sam Reynolds Read more.

Calendar

• Mar. 30-Apr. 2, 2026: EthCC, Cannes
• Apr.15-16, 2026: Paris Blockchain Week, Paris
• May 5-7, 2026: Consensus, Miami
• Sept. 29-Oct.1, 2026: Korea Blockchain Week, Seoul
• Oct. 7-8, 2026: Token2049, Singapore
• Nov. 3-6, 2026: Devcon, Mumbai
• Nov. 15-17, 2026: Solana Breakpoint, London