04-02-2026Price:

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Square hides Bitcoin custody from merchants

Thursday, April 2, 2026 · from 3 podcasts, 4 episodes
Bitcoin And | Bitcoin & E…Ungovernable MisfitsBitcoin And | Bitcoin & E…BTC Sessions
  • Square now accepts Bitcoin by default, shielding merchants from volatility and tax reporting.
  • Multi-signature wallets defend against theft, but legal ownership requires formal documentation.
  • Quantum attack warnings are dismissed by developers as Ethereum-funded FUD.

Square’s automatic Bitcoin payment setting flips the script on merchant custody. David Bennett explained on Bitcoin And that millions of merchants now default to accepting Bitcoin without ever touching the asset or a private key. The system settles in dollars, meaning Square, not the merchant, officially accepts the crypto - a crucial distinction for IRS reporting. This positions Bitcoin purely as a payment rail, abstracting away its financial sovereignty.

The convenience comes with a custody trade-off. Joe Kelly of Unchained argues that while technical control resides with the key holder, legal ownership in probate or tax court often requires formal documentation only institutions provide. Multi-signature setups, where moving funds requires multiple keys, offer a middle ground by protecting against a single lost key while allowing for recovery assistance.

Meanwhile, a new quantum computing paper from Google and the Ethereum Foundation claims Bitcoin’s cryptography is vulnerable. Developers dismiss it as incentivized FUD, noting conflict of interest from co-author Justin Drake of the Ethereum Foundation, which is designing its own post-quantum roadmap. Bitcoin contributor Giacomo Zucco states the required logical qubit has “no credible engineering roadmap to exist.”

This tension between seamless abstraction and personal sovereignty defines the current phase. For merchants, Square’s model eliminates complexity. For holders, the choice is between the legal protections of institutional custody and the cryptographic finality of self-custody - a spectrum where control and convenience pull in opposite directions.

David Bennett, Bitcoin And:

- I can walk up to a square merchant today and unless that square merchant has purposely gone through the settings and turned off all Bitcoin functionality, then I will have the option to pay that invoice in Bitcoin or lightning.

- Square accepted the Bitcoin, not the merchant, which is an important distinction for the Internal Revenue Service.

Giacomo Zucco, Bitcoin And:

- A single logical qubit with a sufficiently low error rate to pose a practical problem has no credible engineering roadmap to exist.

- Quantum FUD is at best useless and at worst, actively harmful.

PaymentsCustodyAdoption

By the Numbers

  • $100,000,000New Hampshire Bitcoin municipal bond sizemetric
  • BA2Moody's bond ratingmetric
  • $122,000,000,000OpenAI capital raisemetric
  • $852,000,000,000OpenAI post-money valuationmetric
  • $2,000,000,000OpenAI monthly revenuemetric
  • 40%Enterprise share of OpenAI revenuemetric

Entities Mentioned

BitmainCompany
BLOCKSPACESCompany
ChainalysisCompany
Ethereum FoundationCompany
Google AntigravityProduct
Mercado LibreCompany
NubankCompany
OpenAItrending
ripioCompany
SparkProtocol
SquareCompany
UnchainedCompany

Source Intelligence

What each podcast actually said

Bitcoin And | Bitcoin & Economic News
Bitcoin And | Bitcoin & Economic News

Texas Hold 'Em | Bitcoin News • Apr 1

  • Latin American e-commerce giant Mercado Libre is shutting down its ERC-20 loyalty token, Mercado Coin, on April 17.
  • Mercado Libre replaced its failed ERC-20 token with a dollar-pegged stablecoin, Meli Dollar, backed by U.S. Treasury securities.
  • Brazilian neobank Nubank's similar loyalty token, Nucoin, collapsed 97% in value before the bank suspended it and offered conversion to Bitcoin or USDC.

Also from this episode:

Politics (2)
  • David Bennett believes there is a serious internal power struggle occurring within Iranian leadership between the president and other factions.
  • Bennett suggests the factional fight in Iran represents a major pressure point for the regime as it faces external military attacks.
Markets (3)
  • Moody's assigned a BA2 rating, two notches below investment grade, to New Hampshire's proposed $100 million Bitcoin-backed municipal bond.
  • The New Hampshire bond structure includes a liquidation trigger if Bitcoin's price falls below a predefined threshold to protect bondholders.
  • Bennett argues Bitcoin's current volatility makes it unsuitable for backing municipal bonds, warning of potential liquidation cascade risks.
Big Tech (3)
  • OpenAI raised $122 billion in a funding round, achieving an $852 billion post-money valuation.
  • OpenAI claims it is generating $2 billion in monthly revenue, up from $1 billion per quarter in 2024.
  • OpenAI's enterprise segment now makes up over 40% of revenue and is on track to reach parity with consumer revenue by 2026.
Protocol (4)
  • A Google paper co-authored by an Ethereum Foundation researcher estimated fewer than 500,000 physical qubits could break Bitcoin's elliptic curve cryptography.
  • Physicist Giacomo Zucco estimates a 0.001% probability that a quantum computer could threaten Bitcoin's cryptography before 2030.
  • Zucco warns the real risk is governments forcing replacement of battle-tested crypto algorithms with potentially compromised quantum-safe alternatives.
  • BIP 360, a proposal for quantum-resistant Bitcoin address formats, is already live on testnet.
Labor (2)
  • Jack Dorsey outlined a vision for Block where AI replaces middle management layers to improve information flow, weeks after the company cut 40% of staff.
  • Dorsey's proposed post-AI company structure features three roles: individual contributors, directly responsible individuals, and player-coaches.
BTC MarketsMacroBankingModelsAgents

When VCs Attack! | Bitcoin News • Mar 31

  • Square is automatically enabling Bitcoin payments for eligible US sellers, shifting from an opt-in to a default-on setting.
  • Square's rollout leverages the Lightning Network for near-instant transactions, abstracting volatility for merchants who receive USD.
  • David Bennett argues Square's automatic Bitcoin acceptance shields merchants from IRS complexities, as Square, not the merchant, accepts the crypto.
  • A proposed US Department of Labor rule creates a safe harbor for 401(k) fiduciaries offering crypto, covering a participant-directed market of $8.8 trillion.

Also from this episode:

Protocol (6)
  • A Google quantum AI paper claims breaking Bitcoin's encryption may require fewer than 500,000 physical qubits, below prior estimates of millions.
  • Google researchers designed attack methods requiring roughly 1,200 to 1,450 high-quality qubits, a fraction of earlier estimates.
  • The paper suggests a quantum attacker could have a 41% chance of beating a Bitcoin transaction by calculating the private key in about nine minutes.
  • Google's paper estimates 6.9 million Bitcoin, roughly a third of the supply, sit in wallets where the public key has been exposed.
  • The paper argues Bitcoin's 2021 Taproot upgrade expanded vulnerability by making public keys visible on-chain by default.
  • David Bennett suggests the quantum research, promoted by Nick Carter's Project 11, is a potential precursor to calls for faster Bitcoin blocks.
Markets (2)
  • Nakamoto sold 284 Bitcoin for $20 million in March, implying an average sale price of around $70,400 per coin.
  • Nakamoto's sale came at a roughly 20% discount to its year-end 2025 valuation of $87,519 per Bitcoin.
Stablecoins (2)
  • Standard Chartered reports stablecoin velocity has roughly doubled over two years, with tokens now turning over about six times per month.
  • Standard Chartered maintains its projection that stablecoin supply will reach $2 trillion by 2028, generating $1 trillion in demand for US Treasury bills.
Mining (2)
  • The Mined in America Act proposes certified domestic miners could sell newly mined Bitcoin to the US government in exchange for a capital gains tax exemption.
  • The bill highlights a national security risk, noting 97% of specialized Bitcoin mining hardware is produced by Chinese firms like Bitmain and MicroBT.
AI & Tech (1)
  • Chainalysis is introducing AI-powered blockchain intelligence agents trained on over a decade of its proprietary transaction data.
AdoptionRegulationMiningMacro
Ungovernable Misfits
Ungovernable Misfits

The Skinwalker | Letter #5: Notes From The Inside • Apr 1

  • Keone Rodriguez is serving a five-year prison sentence for developing non-custodial Bitcoin privacy software.

Also from this episode:

Society (11)
  • Rodriguez says his letters help families understand the experience of having loved ones in federal custody.
  • Rodriguez describes prison guards conducting inmate counts at midnight, 3 a.m., and 3:30 a.m., shining flashlights in sleeping faces.
  • At FPC Morgantown, Rodriguez says disrespect is rampant in minimum security camps because no one wants to risk a fight.
  • Rodriguez explains avoiding conflict is critical to prevent losing good time credit and being reclassified to a higher security institution.
  • He describes B-Wing as filled with young, rowdy inmates happy to be in prison, while A-Wing has older, quieter men focused on returning home.
  • Inmates submit written requests called cop-outs to prison counselors for things like bunk transfers.
  • Rodriguez secured a transfer to A-Wing after two months of janitor work and a second cop-out request on February 18th.
  • His new A-Wing cell had an east-facing window with a view of a stream and deer, unlike his previous windowless bunk.
  • Rodriguez says the noise in B-Wing involved competing loudspeakers playing mumble rap, creating a constant cacophony after lights out.
  • A-Wing was so quiet an industrial fan was brought in for white noise, allowing Rodriguez to sleep through the night for the first time.
  • Mail to inmates at FPC Morgantown is restricted to three-page letters; books must come directly from publishers or retailers.
Labor (2)
  • Rodriguez took a bathroom janitor job to demonstrate he was a serious person worthy of moving to a better housing unit.
  • He says prison jobs are either real work like janitorial duties or paper jobs that only exist on paper, like vacuuming once a month.
Psychology (1)
  • Rodriguez states prison survival is about securing, recognizing, and celebrating small victories like a better bunk.
Media (1)
  • The Rage republishes his letters, and donations to the podcast go 100% to support imprisoned developers, minus platform fees.
CustodyAdoptionMacro
BTC Sessions
BTC Sessions

Bitcoin Boomers: Joe Kelly on Scams, Security & Self-Custody in 2026 • Mar 30

  • Joe Kelly says the biggest security threat is social engineering, not technical vulnerabilities.
  • Scammers use urgency and personal data to trigger victims into making mistakes, bypassing technical safeguards.
  • Multi-signature setups, requiring multiple keys to move funds, defend against the single point of failure of a lost seed phrase.
  • Kelly notes multi-signature allows a third party to help with recovery without gaining unilateral power to steal funds.
  • Holding your keys proves technical control but often lacks the documentation required for tax and probate court.
  • Institutions can provide the formal letterhead that bridges cryptographic ownership with the existing legal system.
  • Larry Lepard argues self-sovereignty exists on a spectrum between total privacy and working within legal protections.
  • Lepard cites Executive Order 6102, where the US government seized gold directly from bank vaults, as a risk of centralized custody.
  • While Bitcoin is harder to confiscate than gold if held privately, most users need regulated bridges to the broader economy.
CustodyAdoptionPrivacy

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