A proposal to freeze dormant bitcoin, currently valued at $76,832.49, could trigger a rapid and severe repricing of the cryptocurrency, according to advocates who spoke with CoinDesk. This move is being considered as a protective measure against potential quantum computing threats. Bitcoin developers and industry experts have been debating the issue for weeks, weighing the risks of inaction against the potential consequences of freezing the estimated 5.6 million inactive tokens.
Samuel 'Chad' Patt, founder of Op Net, warned that freezing any coins, including those deemed lost, would set a dangerous precedent and undermine the market's perception of bitcoin's ownership structure. '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 that a successful quantum attack would have far more severe consequences, as institutions would reassess the system's ability to survive a breach of its core assumptions.
The debate surrounding the potential threat of quantum computing to the bitcoin network has sparked intense discussion, with some arguing that the estimated 5.6 million dormant tokens, worth roughly $440 billion, should be frozen to prevent potential theft. A Bitcoin Improvement Proposal (BIP-361) has been put forth, which contemplates phasing out bitcoin's current cryptographic signatures and potentially freezing assets that fail to migrate. However, not all experts agree that freezing dormant coins is the best approach, with some arguing that it would undermine bitcoin's core principles of immutability and permissionlessness.
Others, like Ken Kruger, founder and CEO of Moon Technologies, believe that Lopp's proposal is sensible, given the potential risks posed by quantum computing. Ultimately, the decision to freeze or not freeze dormant bitcoin will have significant implications for the cryptocurrency's future, with experts warning that inaction could pose an existential threat to the system.