Quantama Papers - An immutable quantum future, 3rd party doctrine, and the breaking of blockchain.

Tulip Mania was a period in the 17th century of speculative frenzy where prices for tulip bulbs were driven to incredibly high levels before collapsing. One of the first known financial bubbles in history has been the touchstone for every possible bubble since. Unlike tulips blockchains/cryptocurrencies can have intrinsic value based on factors like scarcity, utility, and network effects that should cushion such a bubble. I believe legal precedent and quantum advancements will turn the utility(privacy) and network effects(distribution) against the technology. Transforming the core technology value into liabilities and entice a mania of its own.

AI was used for the image of the Tulip, but the rest of the article is created by a real fallible human, please message any spelling, grammar, etc happy to fix. 

Quantum is coming for the utility "value" of crypto, the immutable encrypted chain of transactions. The legal principle of third-party doctrine(That privacy is not to be expected on 3rd party systems.) will be the Achilles heel to the network effect of blockchain. I challenge that an unstoppable fuse has already been lit and a series of events are to happen that are not being appreciated, discussed, and prepared for by the appropriate authorities.

The basic idea of quantum breaking encryption has been floated for years,  published in 2019 "Cryptography Apocalypse: Preparing for the Day When Quantum Computing Breaks Today's Crypto -  Roger A. Grimes" goes into great detail on the technology and the why of how quantum will break encryption. But as encryption "breaks" what will it look like to the outside world?

Furthermore, research shared by Chinese researchers has proven beyond just theory that the math translates to the real world when they broke a 22-bit RSA encryption with a small Qubit setup (https://www.earth.com/news/china-breaks-rsa-encryption-with-a-quantum-computer-threatening-global-data-security/)

A huge and growing corpus of research, policy, and FUD is built around how many Qubits it takes to "break" encryption and how far we are from a crypt-analytically relevant quantum computer (CRQC). You can see mentions across banking, cybersecurity, government, and technology news.

Splunk has a great article (https://www.splunk.com/en_us/blog/learn/crqcs-cryptographically-relevant-quantum-computers.html) on one definition of a CRQC focused on breaking RSA-2028 in 24 hours or less. This article also references the attack “harvest now, decrypt later”, which is important for my argument: https://en.wikipedia.org/wiki/Harvest_now,_decrypt_later

This begs the question, how will quantum breaking encryption land for the public?

I propose the first encryption of interest that will be broken will not be VPN, corporate/state secrets, or even current crypto but instead yesterday's crypto chains with poor encryption implementations. Blockchains represent the most interesting(legally) and public that is widely available for different groups to experiment with and decrypt.

Blockchain is essentially a distributed, immutable ledger, meaning it's a record of transactions that can't be altered once added. While the ledgers are not expected to be built with privacy in mind the pseudo-naming has provided a degree of ambiguity as to who exactly the transactions are being made by, where they are located, and what they are buying/trading. Currently, the 4th amendment matched with this built in privacy provides a shield that has been enough to keep legal and tax authorities from doing broad discoveries without a clear warrant and goal. This legal shield is the Achilles heel of the current architecture of blockchain.

Today blockchain and crypto can be deciphered but requires sophisticated coloration, investigation, and tooling is required to “connect the dots” across a blockchain. Detailed investigations to understand illegal transactions are extremely difficult and costly to undertake. (See the recent news on the $250 million in crypto that was stolen and tracked). Once quantum unlocks key pieces of the systems security it will become elementary to organize, identify, and prosecute at great scale.

Along with the technical sophistication the legal hurdles to get permission to investigate a specific instance are huge, but blockchains are by design distributed across systems. Due to this once quantum lands, legal and tax entities will be able to unravel and understand every transaction that occurs for the respective blockchain with a freedom not available today. Today a legal entity needs cause, warrants, etc to investigate a crime. Distribution of the ledger therefore will be the legal finger hold used to bypass cause, a judge's approval, hearings, and warrants. Most international law authorities will not require a warrant or justification to unlock data held by a 3rd party for example in the United States:

• The third-party doctrine defined - A constitutional rule that permits the state to access business records and transactional data about a company’s consumers without constituting a Fourth Amendment “search.” If information is possessed or known by third parties, then for the purposes of the Fourth Amendment, an individual lacks a reasonable expectation of privacy in the information.

If we agree in principle that a core allure of blockchain for some parties is the ability to hide transactions from legal and tax authorities. I believe, once block chains start to be publicly decrypted, bedlam will ensue. A Panama Papers type event will occur, but at a far larger scale.

For scale purposes:

• The Panama papers involved ~220k shell companies and so far the resulting litigation, fines and back taxes exceeds $1.2 billion.
• Crypto/Bitcoin in contrast consists of over 46 million wallets with $1 or more in assets...or about 200x more entities with a potential for $240 billion in possible  litigation, fines and back taxes.
• That would be the low water mark, if all wallets are included in this math 460 million wallets the high water mark is likely $2.4 trillion.

The Quantama Papers will start once legal and tax authorities get quantum enabled tools that will allow them to unlock and investigate a blockchain without warrant or probable cause.

Horrible crimes will be layed bare much like with the Panama Papers, more importantly and as we saw with the Panama Papers tax dodging across multiple countries will be exposed.

The tax crimes will cause a rolling exposure of crime and tax avoidance that wont be isolated to individual countries or crypto. I predict it will be quite a show that will dominate the news and social media cycles for months or years as each new “breaking” of a different blockchain will expose more crime and tax evasion.

When? There truly is no telling. Timing is an incredibly tough problem and I don’t have an answer other than it is getting CLOSER. This is the $280 billion to $2 trillion dollar question… Chinese researchers broke 22-bit last year with 83 qubits, proving the math is sound. 

The largest known Quantum computers are about ~5000 qubits. IBM, Microsoft, Google, DWave, and many others are making huge investments in this space.

Also researchers have wildly ranged from 1 million qubits to 20 million(5-10 year difference) to break RSA-2028. 

• Google through direct experimentation research revealed they suspect 1 million qubits might be enough to break RSA-2028 easily(easy=1 week). 
• Microsoft is targeting 1 million qubit CPUs.
• Rumors have Google is going to open 200 Qubit research environments for design testing this year.

This all points that we are closer to Q-Day(When quantum breaks all old encryption), which I propose should be named Quantama Paper Day.

What to watch for?

• A steady march of news of Quantum breaking harder encryption faster
• As Quantuma Paper type event approaches there will be calls to change disclosure and privacy laws
• As Quantuma Paper type event approaches there will be calls to change tax laws around money hiding, evasion, and fraud
• Smaller lesser used blockchains being deeply investigated and tax crimes filed(probably in the EU first)

The chaos of the Tulip mania will be tiny in comparison; In a series of paintings Jan the Younger Brueghel titled "Allegory of Tulipmania" the insanity and impact of the tulip bubble bursting is laid out as a circus of monkeys. If the value of blockchain spawns from the perceived utility and network effect what happens if those core components become technologically and legally irrelevant? Bedlam for sure!

References:

https://tulipfestivalamsterdam.com/painting-allegory-on-tulipmania-by-jan-brueghel-the-younger-1640/

https://www.meisterdrucke.us/fine-art-prints/Jan-the-Younger-Brueghel/1452683/Allegory-of-Tulip-Mania.html

https://thequantuminsider.com/2025/05/24/google-researcher-lowers-quantum-bar-to-crack-rsa-encryption/

https://blog.google/technology/research/google-willow-quantum-chip/

https://news.microsoft.com/source/features/innovation/microsofts-majorana-1-chip-carves-new-path-for-quantum-computing/

Gothic Melting Tulip(AI Generated) - https://stockcake.com/i/bleeding-gothic-tulip_1759443_1243573

Panama Papers involved ~220k accounts - https://en.wikipedia.org/wiki/Panama_Papers

Crypto defined - https://www.rba.gov.au/education/resources/explainers/cryptocurrencies.html 

Numbers of bitcoin wallets 46 million with at least $1- https://explodingtopics.com/blog/blockchain-stats