The proposal to freeze dormant bitcoin, valued at $75,901.61, could have severe consequences, including an immediate repricing, according to advocates who spoke with CoinDesk. This move is being considered to protect against potential theft via quantum computing. Bitcoin developers and industry experts have been debating the issue for weeks, weighing the risks and benefits of freezing dormant tokens. Samuel 'Chad' Patt, founder of Op Net, cautioned that freezing any coins, including 'lost' ones, would set a precedent that could impact the entire market.
'Institutional risk desks do not care about the reason, they care about the precedent,' he said. Market analyst Jason Fernandes agreed with Patt's assessment but believed a successful quantum attack would have even more severe repercussions. 'Institutions won’t just price precedent, they’ll price whether the system can survive a break in its core assumptions,' Fernandes added. The debate surrounding the potential threat of quantum computing to the bitcoin network has been ongoing, with some experts advocating for the freezing of dormant bitcoin, estimated to be around 5.6 million, which have been held in wallets for over a decade.
Jameson Lopp, a core Bitcoin developer, suggested that freezing these tokens would be preferable to leaving them vulnerable to future quantum hackers. Lopp and other developers released Bitcoin Improvement Proposal 361 (BIP-361), which proposes phasing out bitcoin’s current cryptographic signatures and potentially freezing assets that fail to migrate. However, not all experts agree with this approach, citing concerns about the potential impact on the market and the principles of decentralization and immutability that underpin the bitcoin network.
Kent Halliburton, CEO and co-founder at SazMining, argued that freezing dormant coins would undermine the core promise of unconditional property rights. Khushboo Khullar, venture partner at Lightning Ventures, described the approach as 'deeply flawed,' as it would require a contentious hard fork and violate the network’s decentralized ethos.
Despite these concerns, some experts believe that the risks posed by quantum computing necessitate drastic measures. Ken Kruger, founder and CEO of Moon Technologies, acknowledged that building future-proof systems is challenging and that tradeoffs may be necessary to address the quantum threat. Fernandes emphasized that the protocol isn’t 'finished' and that bitcoin could evolve to address the quantum risk, just as it has with previous upgrades like SegWit and Taproot. Ultimately, the decision to freeze dormant bitcoin or not will depend on the community's willingness to balance the need for security with the principles of decentralization and immutability that underpin the bitcoin network.