New Proposal Offers Bitcoin Holders a Way to Prove Control Over Funds Without Compromising Security

Concerns over quantum computing have long plagued Bitcoin, with millions of coins in old wallets vulnerable to theft if powerful quantum computers emerge. This includes the approximately 1.1 million bitcoin linked to Satoshi Nakamoto, worth around $84 billion. To mitigate this, a soft fork could be implemented to phase out legacy address types, forcing holders to move to quantum-safe formats. However, this would require long-dormant holders like Satoshi to publicly move their assets, risking exposure. A new proposal by Dan Robinson of Paradigm offers an alternative, using Provable Address-Control Timestamps (PACTs) to allow holders to timestamp proof of ownership without revealing their identity or moving their coins. This involves generating a random salt and using BIP-322 to produce a proof of ownership, which is then bundled and timestamped on the blockchain. If a soft fork freezes quantum-vulnerable coins, the protocol could include a rescue path accepting a STARK proof, allowing holders to spend their coins without revealing any sensitive information. This proposal addresses a gap in BIP-361 and provides a potential solution for wallets derived through BIP-32. However, it requires the adoption of a STARK verification protocol, which would need a separate soft fork and substantial new infrastructure. Ultimately, the proposal offers a way to balance protection against quantum theft with respect for dormant property rights, but its effectiveness depends on the cooperation of holders like Satoshi.