According to advocates, freezing dormant bitcoin, currently valued at $76,835.50, would immediately impact the cryptocurrency's price and potentially mark one of its worst trading days since its inception in 2009. This debate has been ongoing among bitcoin developers and industry participants, who are discussing whether to freeze inactive tokens to protect them from potential theft via quantum computing. Samuel 'Chad' Patt, founder of Op Net, stated that freezing any coins, including 'lost' ones, would set a precedent for the market, implying that all 19.8 million BTC in circulation are conditionally owned.
'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 freezing dormant coins could trigger a significant price shift, but believes a successful quantum attack would have even 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 proposal, Bitcoin Improvement Proposal 361 (BIP-361), has been released, which considers phasing out bitcoin’s current cryptographic signatures and potentially freezing assets that fail to migrate. If implemented, Patt warned 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.' Other experts, such as Kent Halliburton, CEO and co-founder at SazMining, believe that freezing dormant coins would undermine bitcoin's core principles of inviolable property rights. 'You don't defend Bitcoin by breaking its core promise of inviolable property rights,' Halliburton said. Khushboo Khullar, venture partner at Lightning Ventures and a bitcoin maximalist, also argued that freezing dormant coins is a deeply flawed approach, as it would require a contentious hard fork and violate the network’s decentralized ethos.
However, not all maximalists agree, with some believing that Lopp’s proposal is sensible and necessary to address the potential threat of quantum computing. 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.' Ultimately, the debate highlights the complexities and challenges of addressing the potential risks posed by quantum computing to the bitcoin network.