Charles Hoskinson Criticizes Bitcoin's Quantum Solution as a Hard Fork that Fails to Protect Satoshi's Holdings

Recently, Bitcoin's core developers suggested freezing 8 million coins to protect against quantum attacks. However, according to Charles Hoskinson, the founder of Cardano, this proposal cannot safeguard the coins belonging to Satoshi Nakamoto, the network's pseudonymous creator, as stated in a video on his YouTube channel. Hoskinson believes that the proposed defense mechanism, BIP-361, is both technically incorrect and incapable of protecting the network's oldest coins, including the roughly 1 million bitcoin attributed to Satoshi. He argues that BIP-361, which aims to phase out quantum-vulnerable bitcoin addresses, is incorrectly presented as a soft fork, as it would require a hard fork due to its invalidation of existing signature schemes. The distinction between a soft fork and a hard fork is crucial, as Bitcoin's development culture has historically opposed hard forks. A soft fork tightens the rules, allowing old software to still work, but without access to new features, whereas a hard fork changes the rules fundamentally, causing old software to stop working entirely and potentially splitting the network unless all users upgrade. BIP-361 proposes that users with frozen funds could reclaim them by creating a zero-knowledge proof tied to their BIP-39 seed phrase. However, Hoskinson claims that this approach is ineffective for approximately 1.7 million bitcoin that predate BIP-39's introduction in 2013, including the coins associated with Satoshi's early mining activity. These early coins were generated using a different key derivation method and would remain permanently frozen if the proposal passes in its current form. Jameson Lopp, the core developer who co-authored BIP-361, has expressed his dislike for the proposal, describing it as a rough idea for a contingency plan rather than a finalized specification. Hoskinson's criticism extends beyond the technical aspects, arguing that Bitcoin's lack of formal on-chain governance hinders the network's ability to resolve tradeoffs through a structured process, leading to contentious upgrades being negotiated through developer mailing lists and social pressure.