Charles Hoskinson Criticizes Bitcoin's Quantum Solution as Insufficient to Save Early Coins

Earlier this week, Bitcoin's core developers suggested freezing 8 million coins as a defense mechanism against quantum attacks. However, according to a recent video posted by Cardano's founder Charles Hoskinson, this solution is still insufficient to protect the network's oldest coins, including Satoshi Nakamoto's roughly 1 million bitcoin. Hoskinson argues that BIP-361, the proposal aimed at phasing out quantum-vulnerable bitcoin addresses, is incorrectly presented as a soft fork, as it would essentially require a hard fork by invalidating existing signature schemes. He emphasizes that the distinction between a soft fork and a hard fork is crucial, given Bitcoin's historical opposition to hard forks due to their perceived violation of the network's immutability. The proposal's authors have described it as a soft fork, a characterization Hoskinson disputes. A key aspect of BIP-361 involves allowing users with frozen funds to reclaim them by creating a zero-knowledge proof linked to their BIP-39 seed phrase. Nevertheless, Hoskinson points out that this approach is ineffective for approximately 1.7 million bitcoins that predate the introduction of BIP-39 in 2013, including the 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. Consequently, if the proposal is implemented in its current form, these coins would remain permanently frozen, regardless of any attempts by their original owners to migrate them. Jameson Lopp, the core developer behind BIP-361, has expressed his own reservations about the proposal, describing it as a rough contingency plan rather than a finalized specification. Lopp estimates that freezing dormant coins, approximately 5.6 million bitcoin, 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 such tradeoffs through a structured process, leading to contentious upgrades being negotiated through developer mailing lists and social pressure.