Charles Hoskinson Claims Bitcoin's Proposed Quantum Solution is a Hard Fork That Fails to Rescue Satoshi's Coins

Earlier this week, Bitcoin's core developers suggested freezing 8 million coins as a defense mechanism against quantum attacks. However, Charles Hoskinson, the founder of Cardano, believes this approach is still insufficient to protect the coins belonging to the network's creator, Satoshi Nakamoto, as stated in a video posted on his YouTube channel. Hoskinson argues that the proposed defense against quantum computers, BIP-361, is both technically incorrect and structurally flawed, making it incapable of safeguarding the network's oldest coins, including the approximately 1 million bitcoins attributed to Satoshi Nakamoto. He claims that BIP-361, which aims to phase out quantum-vulnerable bitcoin addresses, is misrepresented as a soft fork when it would actually require a hard fork due to its invalidation of existing signature schemes that users currently rely on. This distinction is crucial, as Bitcoin's development culture has traditionally been opposed to hard forks, viewing them as a violation of the network's immutability. The authors of BIP-361 have described the proposal as a soft fork, a characterization Hoskinson disputes. A soft fork typically tightens the rules, allowing old software to continue functioning but without access to new features, whereas a hard fork fundamentally alters the rules, causing old software to cease working entirely and potentially resulting in a network split unless all users upgrade. BIP-361 proposes that users with frozen quantum-vulnerable funds could recover them by creating a zero-knowledge proof linked to their BIP-39 seed phrase, a standard for generating wallet keys from a recoverable phrase. Nevertheless, Hoskinson argues that this approach is unable to recover the roughly 1.7 million bitcoins that predate the introduction of BIP-39 in 2013, including the approximately 1 million coins associated with Satoshi's early mining activities. These early coins were generated using a different key derivation method from the original Bitcoin wallet software, which relied on a local key pool rather than a deterministic seed. If the proposal is implemented in its current form, these coins would remain permanently frozen, regardless of whether their original owners attempt to migrate, as migration would require cryptographic proof they are unable to provide. Jameson Lopp, the core developer who co-authored BIP-361, has acknowledged that he does not favor the proposal and hopes it will never need to be adopted, describing it as a rough idea for a contingency plan rather than a finalized specification. Lopp has argued that freezing dormant coins, which he estimates at 5.6 million bitcoins, would be preferable to allowing a future quantum attacker to recover and dump them on the market. Hoskinson's broader critique extends beyond the technical aspects, arguing that Bitcoin's lack of formal on-chain governance leaves the network unable to resolve these tradeoffs through a structured process, forcing contentious upgrades to be negotiated through developer mailing lists and social pressure.