Locking away inactive bitcoin, currently valued at $77,031.67, could trigger an abrupt repricing, marking one of the worst trading days for the cryptocurrency since its launch in 2009, according to advocates. The debate surrounding the freezing of dormant tokens to protect against potential theft through quantum computing has been ongoing among bitcoin developers and industry participants. Samuel 'Chad' Patt, founder of Op Net, stated that freezing any coins, including 'lost' ones, sets a precedent that may impact the market's perception of the 19.8 million BTC in circulation. 'Institutional risk desks do not care about the reason, they care about the precedent,' Patt said.
Market analyst Jason Fernandes, a self-described pragmatic maximalist, agrees with Patt's repricing thesis but believes a successful quantum attack would have more severe consequences. 'Institutions won’t just price precedent, they’ll price whether the system can survive a break in its core assumptions,' Fernandes added. The discussion revolves around the estimated 5.6 million BTC held in wallets that have been inactive for over a decade, making them vulnerable to potential quantum computing attacks.
A week ago, core Bitcoin developer Jameson Lopp expressed his preference for freezing the dormant bitcoin, worth approximately $440 billion, rather than leaving it at risk of being stolen. Lopp and other developers released Bitcoin Improvement Proposal 361 (BIP-361), which considers phasing out bitcoin’s current cryptographic signatures and potentially freezing assets that fail to migrate. If implemented, Patt warns that 'bitcoin’s repricing would be instant, not gradual, and would be the worst single day in bitcoin's history, but not because of a hack, but because the network will have proven its core value proposition is negotiable.' Bitcoin maximalist Kent Halliburton believes the intentions behind BIP-361 are good but argues that 'you don't defend Bitcoin by breaking its core promise of inviolable property rights.' He suggests that better tooling and voluntary migration are more suitable solutions to address the risks posed by quantum computing.
Khushboo Khullar, a venture partner at Lightning Ventures and a bitcoin maximalist, describes freezing dormant coins as a 'deeply flawed approach' that undermines Bitcoin’s core principles. However, not all maximalists agree, with some believing Lopp’s proposal is sensible.
Ken Kruger, founder and CEO of Moon Technologies, stated 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.' Fernandes understands the concerns about precedent but emphasizes that 'quantum risk is an existential threat to the system, not a philosophical debate.' He believes bitcoin could evolve to address the quantum threat, just as it has with previous upgrades. Ultimately, Fernandes thinks that the majority of bitcoin holders are more interested in preserving capital than adhering to a specific ideology. Mati Greenspan, a market analyst and maximalist, concludes that 'doing nothing is better than doing something' and that the Bitcoin community strongly feels that freezing coins would be antithetical to bitcoin's core value proposition.