The potential freezing of dormant bitcoin, currently valued at $78,688.07, could prompt an immediate and drastic repricing, marking one of the most turbulent trading days in the cryptocurrency's history since its inception in 2009, according to advocates. This concern stems from the ongoing debate among bitcoin developers and industry participants regarding the freeze of inactive tokens to safeguard against potential theft via quantum computing.
Samuel 'Chad' Patt, founder of Op Net, warned that freezing any coins, including 'lost' ones, sets a precedent that could undermine the market's perception of bitcoin ownership. 'Institutional risk desks do not care about the reason, they care about the precedent,' Patt noted. Market analyst Jason Fernandes, a self-described pragmatic maximalist, concurred with Patt's assessment but emphasized that a successful quantum attack would have far more severe consequences. The debate surrounding the potential threat of quantum computing to the bitcoin network, particularly the estimated 5.6 million inactive BTC, has been ongoing.
These tokens, held in wallets that have been dormant for over a decade, are considered vulnerable to quantum computing attacks. A week ago, core Bitcoin developer Jameson Lopp expressed his preference for freezing the dormant bitcoin, valued at approximately $440 billion, rather than leaving it susceptible to theft by future quantum hackers. Lopp and other core 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 cautioned that if this proposal proceeds, 'bitcoin's repricing would be instant, not gradual, and would be the worst single day in bitcoin's history, but not because of a hack, but because the network will have proven its core value proposition is negotiable.' Bitcoin maximalist Kent Halliburton argued that while the intentions behind BIP-361 are good, 'you don't defend Bitcoin by breaking its core promise of inviolable property rights.' Halliburton emphasized that the quantum computing threat is real but can be addressed through better tooling and voluntary migration, rather than protocol-level confiscation.
Khushboo Khullar, a venture partner at Lightning Ventures and a bitcoin maximalist, described the approach of freezing dormant coins as 'deeply flawed,' as it 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. Ken Kruger, founder and CEO of Moon Technologies, acknowledged that building future-proof systems is challenging and that quantum computing may pose a threat that requires trade-offs. Fernandes understands the concerns about precedent but believes that the risk of inaction outweighs any concerns about philosophical purity.
Ultimately, Fernandes thinks that the majority of bitcoin holders are more interested in preserving capital than preserving a vague notion of what bitcoin is 'supposed to be.'