Charles Hoskinson of Cardano Claims Bitcoin's Quantum Solution is a Hard Fork that Cannot Rescue Satoshi's Coins

Earlier this week, Bitcoin's core developers suggested freezing 8 million coins to protect against quantum attacks. However, Charles Hoskinson, the founder of Cardano, believes this solution is still insufficient to safeguard the coins belonging to 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 incapable of protecting the network's oldest coins, including the approximately 1 million bitcoin attributed to Satoshi Nakamoto. He claims that BIP-361 would require a hard fork because it invalidates existing signature schemes, despite being presented as a soft fork. A hard fork would be necessary to implement this change, according to Hoskinson. The distinction between a hard and soft fork is crucial, as Bitcoin's development culture has traditionally opposed hard forks due to their potential to violate the network's immutability. The authors of BIP-361 have described it as a soft fork, which Hoskinson disputes. A soft fork tightens the rules, allowing old software to continue functioning but without access to new features, whereas a hard fork changes the rules fundamentally, causing old software to stop working and potentially splitting the network unless all users upgrade. BIP-361 proposes that users with frozen quantum-vulnerable funds could recover them by creating a zero-knowledge proof tied to their BIP-39 seed phrase. However, Hoskinson argues that this approach is ineffective for approximately 1.7 million bitcoin that predate the introduction of BIP-39 in 2013, including the roughly 1 million coins associated with Satoshi's early mining activity. These early coins were generated using a different key derivation method, which relied on a local key pool rather than a deterministic seed. As a result, if the proposal is implemented in its current form, those coins would remain permanently frozen, regardless of whether their original owners attempt to migrate. Jameson Lopp, the core developer who co-authored BIP-361, has acknowledged that he does not like the proposal and hopes it will never be adopted, describing it as a rough idea for a contingency plan rather than a finalized specification. Lopp argues that freezing dormant coins would be preferable to allowing a future quantum attacker to recover and dump them on the market. Hoskinson's critique extends beyond the technical details, arguing that Bitcoin's lack of formal on-chain governance hinders the network's ability to resolve tradeoffs through a structured process, forcing contentious upgrades to be negotiated through developer mailing lists and social pressure.