According to advocates, freezing dormant bitcoin, currently valued at $78,743.32, would have an immediate impact on the market and potentially trigger one of the cryptocurrency's worst trading days since its launch in 2009. This debate has been ongoing among bitcoin developers and industry participants, who are discussing whether to freeze inactive tokens to protect them against potential quantum computing threats. Samuel 'Chad' Patt, founder of Op Net, stated that freezing any coins, including 'lost' ones, sets a precedent that could affect the entire market, as it implies that the 19.8 million BTC in circulation are conditionally owned.
Institutional risk desks are more concerned about the precedent than the reason behind it, Patt added. Market analyst Jason Fernandes, a self-described pragmatic maximalist, agrees with Patt's assessment but believes a successful quantum attack would have more severe consequences. Fernandes noted that institutions would not only consider the precedent but also the system's ability to survive a break in its core assumptions.
Mati Greenspan, a market analyst and maximalist, said that if quantum computers were to crack early bitcoin wallets, it would not trigger a rollback or freeze but rather the largest bug bounty in human history. The debate follows discussions about the potential threat quantum computing poses to the bitcoin network, particularly the estimated 5.6 million BTC held in dormant wallets. These tokens, worth roughly $440 billion, are vulnerable to quantum computing attacks due to their outdated cryptographic signatures.
A team of core bitcoin developers, including Jameson Lopp, released Bitcoin Improvement Proposal 361 (BIP-361) earlier this month, which proposes 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 instant and potentially the worst single day in its history, as the network would have proven its core value proposition is negotiable. Maximalist Kent Halliburton said that while the intentions behind BIP-361 are good, defending bitcoin by breaking its core promise of inviolable property rights is not the solution. He believes there are better ways to address the risks posed by quantum computing, such as improving tooling and voluntary migration.
Khushboo Khullar, a venture partner at Lightning Ventures and a bitcoin maximalist, said that freezing dormant coins is a deeply flawed approach that undermines bitcoin's core principles of immutability, permissionlessness, and no central enforcement. However, not all maximalists agree, and some believe Lopp's proposal is sensible. Ken Kruger, founder and CEO of Moon Technologies, said that building systems that are truly future-proof is challenging, and while bitcoin has come close, quantum computing may pose a threat that requires tradeoffs.
Fernandes understands the concerns about precedent but believes that framing this as a question of purity misses the bigger issue: quantum risk is an existential threat to the system. He thinks bitcoin could evolve, as it has in the past, with upgrades like SegWit and Taproot, and that the protocol is not 'finished' but rather conservative in how it changes. Ultimately, Fernandes believes that most bitcoin holders are more interested in preserving capital than preserving a vague notion of what bitcoin is 'supposed to be.' Greenspan echoes this sentiment, stating that 'doing nothing is better than doing something' and that the Bitcoin community feels strongly that freezing coins would be antithetical to bitcoin's quintessential value proposition.