Castle Island Ventures founding partner Nic Carter discussed artificial intelligence, quantum computing risks to cryptography, and Bitcoin's future during an appearance on Galaxy Brains, a program hosted by Galaxy Digital research director Alex Thorn.

The discussion came as the U.S. government and major global technology companies have accelerated timelines for moving toward post-quantum cryptography standards, a shift that has intensified security debates across the cryptocurrency industry. The U.S. National Institute of Standards and Technology (NIST) has been leading a multi-year process to evaluate and standardize post-quantum cryptographic algorithms, reflecting broader recognition that current public-key systems—including those underpinning internet security, banking infrastructure, and digital assets—could eventually be exposed.

Carter said quantum computers and artificial intelligence could pose risks to classical encryption methods, including ECDSA, and argued that organizations and blockchain networks should adopt a principle of "crypto resilience" that would allow encryption systems to be updated quickly when needed.

He also claimed that the U.S. government could seek to weaken or cripple the Bitcoin (BTC) network in the coming years by using quantum technology as a weapon. According to Carter, if Bitcoin were to grow uncontrollably and come to threaten the global financial system, governments would not hesitate to take radical measures.

Carter suggested that, in a scenario where the U.S. government achieves quantum supremacy, it could break the network's cryptographic protections, seize users' private keys, or make the blockchain network entirely inoperable. The theoretical basis for such a threat stems from Shor's algorithm, which a sufficiently powerful quantum computer could use to solve the mathematical problems that elliptic curve cryptography relies on—problems that remain intractable for classical machines.

Bitcoin's current encryption infrastructure, based on elliptic curve cryptography (ECC), is considered effectively unbreakable by today's computers. However, in theory, a sufficiently powerful quantum computer could overcome that protection within minutes. Experts remain divided on the timeline for when such machines might become operational, with estimates ranging from over a decade to several decades.

Carter said that if the Bitcoin community is slow to adopt quantum-protected, or post-quantum cryptography, upgrades, the delay could leave the network vulnerable to state-led intervention. Upgrading Bitcoin's cryptography would require broad consensus among developers, miners, node operators, and users—a coordination challenge the network has navigated before, though not without contention.

He also addressed the future of dormant coins associated with Satoshi Nakamoto, predicting that a rescue mechanism could eventually be created under the leadership of either the state or the private sector.

In the program's market segment, Bimnet Abate of Galaxy Trading discussed the Bitcoin price cycle and the broader macroeconomic outlook. Reviewing Bitcoin's movement between $58,000 and $65,000, Abate argued that cyclical bottoms were being approached closely and that the risk/reward balance had become attractive for medium- to long-term investors.

This is not investment advice.