Cardano Founder Disputes Bitcoin's Quantum Computing Fix, Claims It Won't Rescue Satoshi's Coins

Earlier this week, Bitcoin's core developers suggested freezing 8 million coins to protect against quantum attacks. However, Cardano's Charles Hoskinson believes this approach will not safeguard coins owned by Bitcoin's creator, Satoshi Nakamoto, as stated in a recent YouTube video. Hoskinson claims that the proposed defense mechanism, BIP-361, is technically incorrect and structurally flawed, making it incapable of protecting the network's oldest coins, including Satoshi's estimated 1 million bitcoins. He asserts that BIP-361 requires a hard fork, as it invalidates existing signature schemes that users currently rely on, contrary to its presentation as a soft fork. A hard fork would fundamentally alter the network's rules, rendering old software obsolete and potentially splitting the network unless all users upgrade. In contrast, a soft fork tightens the rules, allowing old software to continue functioning but without access to new features. The BIP-361 proposal suggests that users with frozen funds could recover them by creating a zero-knowledge proof tied to their BIP-39 seed phrase. Nevertheless, Hoskinson argues that this method cannot recover approximately 1.7 million bitcoins predating BIP-39's introduction in 2013, including Satoshi's coins, as they were generated using a different key derivation method. If the proposal is implemented in its current form, these coins would remain frozen, regardless of whether their original owners attempt to migrate, due to the inability to provide the required cryptographic proof. Jameson Lopp, co-author of BIP-361, has expressed his dislike for the proposal, describing it as a contingency plan rather than a finalized specification. Lopp estimates that freezing dormant coins, approximately 5.6 million bitcoins, 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.