According to advocates, freezing dormant bitcoin could trigger an immediate repricing, potentially marking one of the cryptocurrency's worst trading days since its inception in 2009. This debate has been ongoing among bitcoin developers and industry participants, with some arguing that freezing tokens is necessary to protect against the risk of theft through quantum computing. However, others believe that such a move would set a dangerous precedent and undermine the core principles of the bitcoin network.
Samuel 'Chad' Patt, founder of Op Net, noted that freezing any coins, including 'lost' ones, would imply that all 19.8 million BTC in circulation are conditionally owned, which could have significant implications for institutional investors. Market analyst Jason Fernandes agrees that freezing dormant coins could lead to a severe repricing, but believes that a successful quantum attack would have even more devastating consequences.
The debate centers around the estimated 5.6 million BTC held in wallets that have been dormant for over a decade, which are considered the most vulnerable to quantum computing attacks. Some experts, such as Jameson Lopp, a core Bitcoin developer, propose freezing these assets to prevent potential theft, while others argue that this would require a contentious hard fork and violate the network's decentralized ethos. Mati Greenspan, a self-described maximalist and market analyst, suggests that if quantum computers were to crack early Bitcoin wallets, it would trigger the largest bug bounty in human history rather than a rollback or freeze. The discussion follows the release of Bitcoin Improvement Proposal 361 (BIP-361), which contemplates phasing out bitcoin's current cryptographic signatures and potentially freezing assets that fail to migrate.
Kent Halliburton, CEO and co-founder at SazMining, believes that the intentions behind BIP-361 are good but that freezing coins would break bitcoin's core promise of inviolable property rights. Khushboo Khullar, venture partner at Lightning Ventures, argues that freezing dormant coins is a deeply flawed approach that undermines bitcoin's core principles of immutability, permissionlessness, and no central enforcement.
Ultimately, the decision to freeze or not freeze dormant bitcoin will have significant implications for the future of the network and its users.