Proposal Would Freeze Bitcoins to Protect Against Quantum Theft

A new proposal from five prominent Bitcoin developers would freeze coins in order to protect them from attacks by quantum computers, which are expected to be strong enough to break Bitcoin’s encryption and allow the theft of dormant tokens.

Some 1.7 billion dormant bitcoins are locked using old encryption protocols that make them exceptionally vulnerable to quantum theft. That includes Satoshi Nakamoto’s 1.1 million bitcoin stash.

The “Post Quantum Migration and Legacy Signature Sunset” proposal, or BIP-361, would have three stages. First, bitcoins would be sendable only to post-quantum secure addresses. That would take place about three years after BIP-361 goes live.

Two years later, the second phase would freeze vulnerable bitcoins that have not been transferred to safe addresses.

At an undetermined time after that, legitimate owners of frozen bitcoins would be able to move them to safe addresses using their seed recovery phrases and zero-knowledge proofs.

About 34% of the total bitcoin supply have exposed public keys that will be vulnerable to quantum threats unless transferred to new wallet addresses.

How far off the threat of quantum computing is remains a subject of controversy. Some experts like Adam Back — who was called Satoshi Nakamoto by a recent New York Times story — say the threat is at least a decade off. Others fear it could be far closer.

Google recently spooked some people by saying that quantum computers capable of breaking some current encryption standards could be as near as 2029. Even early Bitcoin encryption is stronger than that, but the threat remains. The federal government wants all its encryption to be quantum resistant by 2035.

The proposal is controversial as it involves taking control of people’s bitcoins away from them for the first time. Even Jameson Lopp, the lead developer on the BIP-361 proposal, acknowledges that it is not an ideal solution.

“I know folks don’t like it. I don’t like it myself,” he wrote in an April 15 X post. “I wrote it because I like the alternative even less. Ultimately, my thesis is that in the face of existential threat, individual economic incentives outweigh philosophical principles.”