The proposed freeze on dormant bitcoin, valued at approximately $440 billion, has sparked intense debate within the cryptocurrency community. Proponents argue that this measure is necessary to protect against potential quantum computing threats, while others claim it would undermine the fundamental principles of bitcoin, including its decentralization and immutability. According to Samuel 'Chad' Patt, founder of Op Net, freezing any coins would set a dangerous precedent, telling 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 agrees that a successful quantum attack would trigger a severe repricing, but believes that freezing dormant coins is not the solution.
'Institutions won’t just price precedent, they’ll price whether the system can survive a break in its core assumptions,' Fernandes added. The debate follows the release of Bitcoin Improvement Proposal 361 (BIP-361), which contemplates phasing out bitcoin’s current cryptographic signatures and potentially freezing assets that fail to migrate. Core Bitcoin developer Jameson Lopp has expressed support for the proposal, stating that he would prefer to see the dormant bitcoin frozen by the network rather than left at risk of being stolen by future quantum hackers.
However, other experts, such as Kent Halliburton, CEO and co-founder at SazMining, argue that freezing coins would break bitcoin's core promise of inviolable property rights. 'You don't defend Bitcoin by breaking its core promise of inviolable property rights,' Halliburton said. The issue has sparked a heated discussion within the bitcoin community, with some arguing that the risk of inaction outweighs concerns about precedent or philosophical purity.
As Fernandes noted, 'quantum risk is an existential threat to the system, not a philosophical debate.' Ultimately, the decision to freeze dormant bitcoin will depend on the community's willingness to compromise on its core principles in the face of potential threats.