Bitcoin proposal seeks to freeze satoshi era coins over quantum risk

Thursday 16 April 2026 - 09:40

By: Dakir Madiha

Bitcoin proposal seeks to freeze satoshi era coins over quantum risk

A group of developers in the Bitcoin ecosystem has introduced a proposal to phase out legacy cryptographic signatures and eventually freeze coins that fail to migrate to quantum resistant addresses. The plan, known as BIP 361 and led by cypherpunk Jameson Lopp, aims to address long term risks posed by advances in quantum computing.

The proposal builds on BIP 360, which introduced a new output format called pay to Merkle root designed to resist quantum attacks. While that earlier upgrade protects newly created outputs, it does not secure older holdings. Around 6.9 million BTC, roughly one third of the total supply, remain stored in legacy address formats where public keys are already exposed on the blockchain. This includes an estimated one million BTC linked to Satoshi Nakamoto.

BIP 361 outlines a three phase transition. In the first phase, expected about three years after activation, new transactions to vulnerable addresses would be prohibited, though users could still spend existing funds. In the second phase, projected around five years after activation, legacy signature schemes such as ECDSA and Schnorr would be invalidated at the consensus level. This would render coins in non migrated addresses permanently unspendable. A third optional phase proposes a recovery mechanism using zero knowledge proofs tied to mnemonic phrases, though this remains theoretical and dependent on further research.

The proposal has triggered a sharp divide within the Bitcoin community. Critics argue that freezing funds, including long dormant holdings, could amount to a form of confiscation and undermine the principle of property rights embedded in the network. Supporters counter that the measure is preventive. They argue that a successful quantum attack could enable large scale theft, causing far greater damage than a controlled freeze that preserves a potential recovery path.

The debate also reflects uncertainty around the timeline of quantum threats. Some industry figures, including leaders at Blockstream, maintain that current quantum systems lack the scale and error correction required to break elliptic curve cryptography in the near term. However, recent research from Google Quantum AI suggests that the resources needed for such attacks may be lower than previously estimated.

The outcome now depends on whether Bitcoin’s decentralized governance can reach consensus on preemptive action. The decision will shape how the network balances long term security against the principle of immutability that defines its design.