The potential freezing of dormant bitcoin, valued at $76,321.63, could trigger an instantaneous repricing, marking one of the most severe trading days in the cryptocurrency's history since its inception in 2009, according to advocates. The debate surrounding the freezing of inactive tokens to protect against quantum computing threats has been ongoing among bitcoin developers and industry participants.
Samuel 'Chad' Patt, founder of Op Net, stated that freezing any coins, including 'lost' ones, would set a precedent, telling the market that all 19.8 million BTC in circulation are conditionally owned. Institutional risk desks, he argued, are concerned about the precedent rather than the reason.
Market analyst Jason Fernandes, a self-described pragmatic maximalist, concurred with Patt's repricing thesis but believed a successful quantum attack would have more severe consequences. The discussion follows weeks of debate on how to respond to the potential threat quantum computing poses to the bitcoin network, particularly the estimated 5.6 million BTC held in wallets that have been dormant for over a decade. These tokens are vulnerable to quantum computing attacks due to their outdated addresses. Core Bitcoin developer Jameson Lopp suggested that freezing the dormant bitcoin, worth approximately $440 billion, would be preferable to leaving it at risk of being stolen by 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. Patt warned that if this proposal proceeds, bitcoin's repricing would be instantaneous and would be the worst single day in its history, as the network would have proven its core value proposition to be negotiable.
Bitcoin maximalists, including Kent Halliburton and Khushboo Khullar, argued that freezing dormant coins undermines the cryptocurrency's core principles of immutability, permissionlessness, and decentralization. However, not all maximalists agree, with some, like Ken Kruger, believing that Lopp's proposal is sensible and that tradeoffs are necessary to address the quantum threat. Fernandes emphasized that the risk of inaction outweighs concerns about precedent or philosophical purity, and that bitcoin could evolve to address the quantum risk, just as it has with previous upgrades.
Ultimately, the decision to freeze dormant bitcoin has significant implications for the network's core value proposition and its ability to withstand quantum computing threats.