Charles Hoskinson Criticizes Bitcoin's Quantum Solution as Insufficient to Protect Satoshi's Holdings

Earlier this week, Bitcoin's core developers proposed a solution to defend against quantum attacks by freezing 8 million coins. However, according to Cardano founder Charles Hoskinson, this plan is still incapable of safeguarding coins belonging to the network's creator, Satoshi Nakamoto. Hoskinson expressed his concerns in a video posted on his YouTube channel, stating that the proposed defense is both technically mislabeled and structurally flawed. He argued that the proposal, known as BIP-361, which aims to phase 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. This distinction is crucial, as Bitcoin's development culture has traditionally been opposed to hard forks, viewing them as a violation of the network's immutability. The authors of BIP-361 have described it as a soft fork, a characterization that Hoskinson strongly disputes. A key aspect of BIP-361 is its suggestion that users with frozen quantum-vulnerable funds could reclaim them by creating a zero-knowledge proof tied to their BIP-39 seed phrase. However, Hoskinson points out that this approach is ineffective for approximately 1.7 million bitcoin that were generated before 2013, including the roughly 1 million coins associated with Satoshi's early mining activities. These early coins were created 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 them. If the proposal is implemented in its current form, these coins would remain permanently frozen. Jameson Lopp, one of the core developers behind BIP-361, has acknowledged that the proposal is not ideal and hopes it will never be needed, describing it as a rough contingency plan rather than a finalized specification. Lopp estimates that freezing dormant coins, which he believes total around 5.6 million bitcoin, would be a preferable solution 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.