New Quantum Proposal Offers Solution for Bitcoin Holders to Prove Ownership Without Transferring Funds

Concerns surrounding Bitcoin's vulnerability to quantum computing have long been tied to the issue of Satoshi Nakamoto's dormant holdings. Approximately 1.1 million bitcoin, valued at around $84 billion and attributed to the cryptocurrency's pseudonymous creator, remain in older wallets with exposed public keys, making them potentially susceptible to theft by powerful quantum computers. The straightforward solution is to implement a soft fork that phases out the use of vulnerable address types, forcing holders to migrate to quantum-resistant formats before attackers can derive their private keys. However, this approach poses a dilemma for long-dormant holders like Satoshi, who would need to publicly reclaim their assets or risk losing access to them. A recent proposal by Dan Robinson, a general partner at Paradigm, introduces the concept of Provable Address-Control Timestamps (PACTs) as a potential workaround. This involves generating a proof of ownership at a specific date without revealing any information publicly until the owner is ready to spend their coins. By utilizing a random salt and a cryptographic commitment, holders can create a private proof of ownership, which is then timestamped and anchored to the Bitcoin blockchain. If Bitcoin were to activate a soft fork that freezes vulnerable coins, the protocol could include a rescue path that accepts a zero-knowledge proof, demonstrating that the holder created their commitment before the existence of quantum hardware. This approach would enable the holder to spend their coins while revealing minimal information. The PACTs proposal also addresses a gap in a previous proposal by including a rescue path for wallets derived through the deterministic key generation standard. However, the implementation of PACTs would require the adoption of a STARK verification protocol, which would necessitate a separate soft fork and broad community consensus. Ultimately, the success of PACTs in protecting Satoshi's holdings depends on whether the creator or current controller of those keys chooses to utilize this solution.