Charles Hoskinson: Bitcoin's Quantum Solution is a Hard Fork, Unable to Rescue Satoshi's Coins

Cardano founder Charles Hoskinson has expressed concerns over Bitcoin's proposed solution to counter quantum attacks, stating it is technically flawed and cannot protect the network's earliest coins, including those belonging to Satoshi Nakamoto. Hoskinson's critique centers around BIP-361, a proposal aimed at phasing out quantum-vulnerable bitcoin addresses. He claims the proposal is misleadingly labeled as a soft fork when, in reality, it would necessitate a hard fork due to its impact on existing signature schemes. A hard fork, as opposed to a soft fork, would fundamentally alter the network's rules, rendering old software obsolete and potentially splitting the network unless all users upgrade. The BIP-361 proposal suggests using zero-knowledge proofs tied to BIP-39 seed phrases to reclaim frozen funds. However, Hoskinson argues this approach is ineffective for approximately 1.7 million pre-2013 bitcoins, including those associated with Satoshi's early mining activities, as they were generated using a different key derivation method. The original Bitcoin wallet software relied on a local key pool rather than a deterministic seed, making it impossible for owners of these early coins to provide the necessary cryptographic proof to migrate their funds. Jameson Lopp, co-author of BIP-361, has expressed reservations about the proposal, describing it as a contingency plan rather than a finalized specification. Lopp estimates that freezing dormant coins, approximately 5.6 million bitcoin, would be preferable to allowing a future quantum attacker to recover and dump them on the market. Hoskinson's criticism extends beyond the technical aspects, highlighting Bitcoin's lack of formal on-chain governance as a significant issue. He argues that this lack of governance hinders the network's ability to resolve tradeoffs through a structured process, forcing upgrades to be negotiated through developer mailing lists and social pressure.