Charles Hoskinson of Cardano Claims Bitcoin's Quantum Solution is a Hard Fork that Fails to Protect Satoshi's Coins

Earlier this week, Bitcoin's core developers suggested freezing 8 million coins to safeguard against quantum attacks. However, Charles Hoskinson, the founder of Cardano, believes this measure will not be enough to protect the coins belonging to Satoshi Nakamoto, the network's pseudonymous creator, as stated in a video posted on his YouTube channel. Hoskinson argues that Bitcoin's proposed defense against quantum computers is both technically incorrect and structurally flawed, making it incapable of safeguarding the network's oldest coins, including the roughly 1 million bitcoin attributed to Satoshi. He claims that BIP-361, a proposal aimed at phasing out quantum-vulnerable bitcoin addresses, is being misrepresented as a soft fork when it would actually require a hard fork due to its invalidation of existing signature schemes. Hoskinson emphasized that 'a hard fork is necessary' to implement this change, which is a significant distinction given Bitcoin's historical opposition to hard forks. A hard fork would change the network's rules so fundamentally that older software would cease to function, potentially leading to a network split unless all users upgrade. In contrast, a soft fork tightens the rules, allowing old software to continue working but without access to new features. The BIP-361 proposal suggests 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 insufficient to rescue the 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 activities. These early coins were generated using a different key derivation method, which relied on a local key pool rather than a deterministic seed, making it impossible for their owners to provide the necessary cryptographic proof to migrate their funds. If the proposal is adopted in its current form, these coins would remain permanently frozen. 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. Lopp believes that freezing dormant coins 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, 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.