A proposal to freeze dormant bitcoin, valued at approximately $440 billion, has sparked intense debate among bitcoin developers and industry participants. The move is intended to safeguard against potential theft via quantum computing, but critics argue it could have severe market repercussions, including an instantaneous repricing of the cryptocurrency. Samuel 'Chad' Patt, founder of Op Net, cautions that freezing any coins, even those considered lost, could set a precedent that undermines the market's confidence in bitcoin's ownership model.
'Institutional risk desks do not care about the reason, they care about the precedent,' Patt said. Jason Fernandes, a market analyst and self-described pragmatic maximalist, agrees that a successful quantum attack would have far more severe consequences, triggering a repricing that institutions would price based on the system's ability to survive a core assumption break. The discussion follows the release of Bitcoin Improvement Proposal 361 (BIP-361), which considers phasing out bitcoin's current cryptographic signatures and potentially freezing assets that fail to migrate. Core bitcoin developer Jameson Lopp has expressed his preference for freezing the dormant bitcoin, stating that he already considers those coins lost.
However, other maximalists, such as Mati Greenspan and Kent Halliburton, argue that freezing coins would be a deeply flawed approach, undermining bitcoin's core principles of immutability and permissionlessness. While some maximalists believe that Lopp's proposal is sensible, others, like Khushboo Khullar, argue that it would require a contentious hard fork, violating the network's decentralized ethos.
The debate highlights the challenges of building a future-proof system, with Ken Kruger, founder and CEO of Moon Technologies, noting that 'it's extremely challenging to build systems that are truly future-proof, and while Bitcoin has come quite close, quantum may pose a threat that requires tradeoffs participants won't be happy with.' Ultimately, the decision to freeze dormant bitcoin or not will have significant implications for the cryptocurrency's value and its ability to withstand quantum computing threats.