Locking away inactive bitcoin, valued at $77,280.16, could trigger an immediate and severe market revaluation, marking one of the most tumultuous trading days for the cryptocurrency since its inception in 2009, according to bitcoin proponents who spoke to CoinDesk. The bitcoin development community and crypto industry stakeholders have been debating the merits of freezing dormant tokens to shield them from potential theft via quantum computing. Samuel 'Chad' Patt, founder of Op Net, cautioned that freezing any coins, including 'lost' ones, sends a signal to the market 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. Market analyst Jason Fernandes, a self-described pragmatic maximalist, concurred with Patt's assessment but believes a successful quantum attack would have far more devastating consequences.
'Institutions won't just price precedent, they'll price whether the system can survive a break in its core assumptions,' Fernandes said. 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 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 by future quantum hackers. Lopp and a team of 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 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.' Bitcoin maximalist Kent Halliburton, CEO and co-founder at SazMining, believes the intentions behind BIP-361 are good but argues that defending Bitcoin by breaking its core promise of inviolable property rights is misguided.
'We operate data centers on four continents, and our clients own every machine. That model only works because Bitcoin guarantees unconditional ownership,' Halliburton said.
Khushboo Khullar, venture partner at Lightning Ventures and a bitcoin maximalist, described freezing dormant coins as a deeply flawed approach that undermines Bitcoin's core principles of immutability, permissionlessness, and no central enforcement. However, not all maximalists agree, with some believing Lopp's proposal is sensible. Ken Kruger, founder and CEO of Moon Technologies, said, '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 believes the quantum risk is an existential threat to the system, not a philosophical debate.
'I don't think there is time; I think quantum will be upon us way faster than anybody thinks,' Fernandes said. Ultimately, Fernandes believes the majority of bitcoin holders are more interested in preserving capital than preserving a vague notion about what bitcoin is 'supposed to be.' Mati Greenspan, a market analyst and maximalist, concluded, 'As with many cases in life, and especially with bitcoin, doing nothing is better than doing something.' The Bitcoin community seems to strongly feel that freezing coins would be antithetical to bitcoin's quintessential value proposition.