A proposal to freeze dormant bitcoin, valued at $78,441.49, could lead to a sudden and severe repricing, marking one of the worst trading days for the cryptocurrency since its inception in 2009, according to advocates. The debate surrounding the freezing of inactive tokens has been ongoing among bitcoin developers and industry participants, with the goal of protecting them against potential theft via quantum computing. 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, as institutional risk desks would be more concerned about the precedent than the reason behind it. Market analyst Jason Fernandes, a self-described pragmatic maximalist, agreed with Patt's thesis but believed a successful quantum attack would have far more severe consequences.
The discussion follows weeks of debate over how to respond to the potential threat quantum computing poses to the bitcoin network, particularly the estimated 5.6 million inactive tokens held in wallets that have been dormant for over a decade. Core bitcoin developer Jameson Lopp suggested that freezing these tokens, worth approximately $440 billion, would be preferable to leaving them vulnerable to future quantum hackers.
Lopp, along with other developers, released Bitcoin Improvement Proposal 361 (BIP-361), which considers phasing out bitcoin's current cryptographic signatures and potentially freezing assets that fail to migrate. Patt warned that if this proposal were to proceed, bitcoin's repricing would be instantaneous and potentially the worst single day in its history, not due to a hack, but because the network would have proven its core value proposition is negotiable. Bitcoin maximalist Kent Halliburton argued that the intentions behind BIP-361 are good but that defending bitcoin by breaking its core promise of inviolable property rights is not the solution. He suggested that better tooling and voluntary migration would be more effective in addressing the risks posed by quantum computing.
Khushboo Khullar, a venture partner at Lightning Ventures and a bitcoin maximalist, described freezing dormant coins as a deeply flawed approach that undermines bitcoin's core principles of immutability, permissionlessness, and no central enforcement. However, not all maximalists agree, with some believing that Lopp's proposal is sensible and that the threat of quantum computing requires tradeoffs that participants may not be happy with.
Ken Kruger, founder and CEO of Moon Technologies, stated that building systems that are truly future-proof is extremely challenging, and while bitcoin has come close, quantum computing may pose a threat that requires compromise. Fernandes emphasized that the risk of inaction far outweighs any concern about precedent or philosophical purity and that bitcoin could evolve to address the quantum risk, just as it has in the past with upgrades like SegWit and Taproot.
Ultimately, Fernandes believes that the majority of bitcoin holders are more interested in preserving capital than preserving a vague notion of what bitcoin is 'supposed to be.'