New Proposal Offers Solution for Bitcoin Holders to Prove Control Without Exposing Assets

Concerns surrounding the impact of quantum computing on bitcoin have long been intertwined with the issue of Satoshi Nakamoto's holdings. Approximately 1.1 million bitcoins, valued at around $84 billion and attributed to the cryptocurrency's pseudonymous creator, remain vulnerable to potential theft by powerful quantum computers due to their storage in outdated wallets with exposed public keys. The proposed solution involves a soft fork that would phase out the use of legacy address types, compelling holders to transition to quantum-resistant formats. However, this approach poses a challenge for dormant holders like Satoshi, who would need to publicly reclaim their assets or risk losing access. In response, Dan Robinson of Paradigm has introduced a concept called Provable Address-Control Timestamps (PACTs), allowing holders to generate a private proof of ownership at a specific date without publicly revealing their assets until they are spent. This is achieved by creating a unique cryptographic commitment using a random salt and the BIP-322 standard for signing messages from a bitcoin address. The commitment is then timestamped on the bitcoin blockchain via OpenTimestamps, with the salt, proof, and timestamp files remaining private. If a soft fork that freezes vulnerable coins is implemented, the protocol could include a rescue path that accepts a zero-knowledge proof, demonstrating that the holder created their commitment prior to the existence of quantum hardware. This approach addresses a specific gap in the existing proposal by providing a rescue path for wallets generated through the BIP-32 standard. However, the implementation of PACTs would require the adoption of a STARK verification protocol, necessitating a separate soft fork with broad community consensus. Ultimately, the success of PACTs hinges on the ability of holders, including Satoshi, to create a commitment before the advent of quantum computers, as no retroactive protection can be applied.