A proposal to freeze approximately 5.6 million dormant bitcoin, valued at around $440 billion, has sparked intense debate within the cryptocurrency community, with some advocates warning that such a move could trigger the most severe single-day repricing in the history of the digital currency. The discussion centers around the potential risks posed by quantum computing, which could potentially compromise the security of the bitcoin network. Bitcoin developers and industry experts have been debating the merits of freezing inactive tokens to safeguard against theft via quantum computers.
However, others argue that such a move would undermine the fundamental principles of the bitcoin network, including its decentralized nature and the guarantee of unconditional ownership. According to Samuel 'Chad' Patt, founder of Op Net, freezing any coins, including dormant ones, would send a signal to the market that all 19.8 million circulating bitcoin are conditionally owned, which could have far-reaching consequences.
'Institutional risk desks do not care about the reason, they care about the precedent,' Patt said. Jason Fernandes, a market analyst and self-described pragmatic maximalist, agrees that freezing dormant bitcoin could lead to a severe repricing but believes that a successful quantum attack would have even more devastating consequences.
'Institutions won’t just price precedent, they’ll price whether the system can survive a break in its core assumptions,' Fernandes added. The debate has been ongoing for weeks, with some proponents arguing that the potential risks posed by quantum computing necessitate drastic measures, while others believe that freezing dormant bitcoin would be a deeply flawed approach that undermines the core principles of the network. Mati Greenspan, a market analyst and self-described maximalist, said that if quantum computers were to crack early bitcoin wallets, it would trigger the largest bug bounty in human history rather than a rollback or freeze. The estimated 5.6 million dormant bitcoin, held in wallets that have been inactive for over a decade, are particularly vulnerable to quantum computing attacks.
A week ago, Jameson Lopp, a core Bitcoin developer and research analyst, suggested that freezing these dormant tokens would be preferable to leaving them at risk of being stolen by future quantum hackers. Lopp and a team of developers released Bitcoin Improvement Proposal 361 (BIP-361), which contemplates phasing out bitcoin’s current cryptographic signatures and potentially freezing assets that fail to migrate. However, not all maximalists agree with this approach, with some arguing that it would require a contentious hard fork and violate the network’s decentralized ethos.
Khushboo Khullar, a venture partner at Lightning Ventures and a bitcoin maximalist, said that freezing dormant coins is a deeply flawed approach that directly undermines the core principles of immutability, permissionlessness, and no central enforcement. Ken Kruger, founder and CEO of Moon Technologies, believes that Lopp’s proposal is sensible, given the potential risks posed by quantum computing.
'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,' Kruger said. Ultimately, the bitcoin community remains divided on the issue, with some arguing that the risk of inaction far outweighs any concerns about precedent or philosophical purity. As Fernandes noted, 'I don't think there is time; I think quantum will be upon us way faster than anybody thinks.'