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 shield against quantum attacks. However, Charles Hoskinson, the founder of Cardano, expressed his doubts about the effectiveness of this solution in saving Satoshi Nakamoto's coins, as stated in a video posted on his YouTube channel. Hoskinson believes that the proposed defense mechanism against quantum computers is both technically mislabeled and structurally flawed, making it incapable of protecting the network's oldest coins, including the roughly 1 million bitcoin attributed to Satoshi Nakamoto. He argued that BIP-361, a proposal aimed at phasing out quantum-vulnerable bitcoin addresses, is being misleadingly presented as a soft fork when, in reality, it would require a hard fork due to its invalidation of existing signature schemes that users currently rely on. The distinction between a soft fork and a hard fork is crucial, as Bitcoin's development culture has traditionally opposed hard forks, viewing them as violations of the network's immutability. 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 entirely and potentially splitting the network unless all users upgrade. BIP-361 proposes that users with frozen quantum-vulnerable funds could reclaim them by constructing a zero-knowledge proof tied to their BIP-39 seed phrase. Nevertheless, Hoskinson argued that this approach is insufficient to rescue approximately 1.7 million bitcoin that predate BIP-39's introduction 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 from the original Bitcoin wallet software, relying on a local key pool rather than a deterministic seed. If the proposal passes in its current form, those 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, acknowledged that he does not like the proposal and hopes it never needs to be adopted, describing it as a rough idea for a contingency plan rather than a finalized specification. Lopp argued 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 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.