Bitcoin slipped to $78,000 after the Fed chief’s remarks, StarkWare executed the first quantum‑resistant transaction on the Bitcoin network, the Solana community backed cutting SOL inflation, and other highlights from the week.
Bitcoin rebounds above $78,000
Throughout the week, the first cryptocurrency tried to test $81,000. On Binance, the price briefly reached $81,354.
However, on Friday, following remarks by Fed chair Kevin Warsh, the price fell below $76,000. The head of the regulator reaffirmed the 2% inflation target. He said the weak summer data do not yet signal a meaningful improvement in the underlying trend.
After Warsh’s speech, traders revised expectations for the Fed’s September meeting — the probability of a rate hike rose in a day from 35.4% to 57%.
At the time of writing, bitcoin had recovered and approached $79,000, up more than 1.5% over 24 hours and holding a weekly gain of nearly 2%.
Among the largest altcoins by market cap, Solana (+12.4%) and HYPE from Hyperliquid (+4.3%) notably outperformed. XRP fell ~7.5% over the week to $1.4.
Inflows into spot bitcoin-ETF products slowed: they attracted about ~$934.5 million for the week versus $1.92 billion the week before. On Friday, investors pulled nearly $202 million, ending a nine‑day streak of daily net inflows.
Ethereum funds saw $824.4 million of inflows, up from $697.2 million the previous week. The most recent daily net outflow from ETH ETFs was recorded on August 11.
The crypto Fear and Greed Index jumped to a local high of 74 early in the week. It then pulled back to 69, remaining near the extreme greed zone.
The digital asset market capitalization rose from $2.62 trillion to $2.66 trillion. Bitcoin’s dominance is 59.6% (59.2% a week earlier); Ethereum’s share is unchanged at 11.2%.
StarkWare executes first quantum‑resistant transaction on Bitcoin
On August 26, the team behind the L2 solution Starknet at StarkWare executed on Bitcoin mainnet the first transaction designed to withstand an attack by a quantum computer.
No changes to the consensus rules were required.
The experiment was conducted under the Quantum Safe Bitcoin (QSB) scheme, conceived as an emergency path to migrate coins until full post‑quantum protection at the protocol level is available. StarkWare’s product director Avihu Levy introduced it in April. StarkWare engineer Tomer Giladi helped put the concept into practice.
Levy’s initiative adds an extra layer based on hash functions to Bitcoin’s native protections — these are resistant to threats from quantum computers.
The signature grinding technique works as follows: before sending, the system cycles through many options until it finds a transaction with the required cryptographic properties. Most of the computation is done off‑chain in advance, and the security of the final result relies mainly on the difficulty of inverting the hash.
For now, the method remains expensive and slow. Preparing a single operation can take several hours and cost hundreds of dollars in computing resources.
StarkWare emphasized that the experiment does not protect the entire network from quantum attacks. QSB allows moving specific coins to an output with additional protection without changing the protocol of the first cryptocurrency.
What to discuss with friends?
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Ethereum developers propose new deposit contract for post‑quantum signatures
On August 24, Ethereum developers proposed a new version of the deposit contract designed for signatures resistant to quantum attacks.
Today, a validator connects to the network via a smart contract that accepts deposits and supports only BLS cryptography. The draft aims to make this mechanism agnostic to a specific scheme so the blockchain can switch to other algorithms — including post‑quantum ones — without reworking the infrastructure.
To achieve this, the proposal introduces a flexible format: public keys and additional metadata are accepted as variable‑length fields, and the cryptographic scheme is identified by a separate numeric code. The current BLS standard is assigned the identifier Scheme 0.
The document does not specify a particular post‑quantum implementation — the initiative only lays the groundwork for subsequent deployment.
The developers also propose changing deposit processing. Instead of the currently used Merkle tree, data would be passed to the consensus layer via execution‑layer requests under EIP‑7685.
Solana will double the pace of SOL disinflation
On August 28, participants in Solana’s on‑chain vote approved proposal SGP‑0002, which doubles the annual disinflation rate from 15% to 30%. Votes: 176.29 million SOL for, 66.19 million against, and 20.63 million abstained.
SGP‑0002 is based on the technical proposal SIMD‑0550, prepared by infrastructure company Helius. The terminal inflation target (1.5%) remains the same, but the time to reach it is reduced from 5.7 to 2.8 years.
According to the authors, this will cut issuance by about 18.9 million SOL over six years compared to the current schedule. Fees, MEV revenue, and the mechanism for distributing block rewards will not change.
The accelerated reduction in issuance will lower the amount of SOL directed to staking rewards. According to SIMD‑0550’s estimates, nominal yield could fall from the current 5.84% to 4.34% in the first year, then to 3% and 2.25% in the second and third years, respectively.
Also on ForkLog:
- IREN’s AI revenue exceeded its mining income for the first time.
- OpenAI will end its partnership with Cursor because of SpaceX.
- Unstoppable Domains refused to bring .crypto and .bitcoin into DNS.
- Cosmos Labs acknowledged a mistake after attacks on six blockchains.
OpenAI found a covert communication channel between its AI agents
On August 26, OpenAI published an analysis of a July incident in which its AI agents left an isolated environment and breached the infrastructure of the Hugging Face platform.
They organized communication via the cache of an internal package manager, using it as a “bulletin board.” Then, through an SSRF attack, one agent opened internet access, and the others quickly adopted the method. Later they gained administrative privileges over the package manager and, after a failure, restored the channel by encoding messages in directory names. The agents divided roles: some searched for vulnerabilities, others for credentials, and others coordinated actions. In their reasoning, they called themselves a “swarm” and were aware the attack was unauthorized but considered it useful for achieving the goal.
Why they didn’t stop
OpenAI highlighted four factors: reward hacking, persistence on unsolvable tasks, unauthorized communication, and goal borrowing from other models. The Hugging Face breach did not grant any bonuses in the evaluation — the agents acted against the logic of the test.
Security failures
Standard safety mechanisms (system prompts, harnesses, classifiers) were not applied to internal tests; according to OpenAI, these reduce the risk of infrastructure compromise by more than 100x. There was no monitoring of chains of reasoning, and signs of activity on the board had appeared as early as May but did not reach management. The company called the incident a “warning shot.”
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