In a recent video on his YouTube channel, Charles Hoskinson, the founder of Cardano, criticized Bitcoin’s latest quantum defense proposal as ineffective and fundamentally flawed. This comes after Bitcoin developers suggested freezing 8 million coins to guard against potential quantum threats earlier this week.
Hoskinson argued that the proposed solution, BIP-361, which aims to phase out quantum-vulnerable bitcoin addresses, is inaccurately labeled as a soft fork when it actually necessitates a hard fork. This distinction is crucial because Bitcoin traditionally resists hard forks due to their perceived impact on network immutability. The proposal’s authors have described it as a soft fork, but Hoskinson contends this characterization is false.
A soft fork allows older software versions to remain functional without new features, while a hard fork alters the rules fundamentally, potentially splitting the network unless all participants upgrade. BIP-361 suggests that users could reclaim their frozen quantum-vulnerable funds through zero-knowledge proofs linked to their BIP-39 seed phrases, which are used for generating wallet keys.
However, Hoskinson highlighted that this method would not protect approximately 1.7 million bitcoins mined before the introduction of BIP-39 in 2013, including the estimated 1 million coins attributed to Satoshi Nakamoto’s early mining activities. These coins were generated using a different key derivation method than those covered by BIP-39.
If implemented as it stands, these older coins would remain inaccessible unless their owners could provide cryptographic proof of ownership—a feat deemed unfeasible for many.
Jameson Lopp, the co-author of BIP-361 and a core Bitcoin developer, expressed his dissatisfaction with the proposal on X, describing it as an undesirable contingency plan rather than a finalized solution. He believes freezing dormant coins is preferable to risking their future recovery by quantum attackers.
Beyond technical concerns, Hoskinson criticized Bitcoin’s lack of formal governance mechanisms, arguing that this deficiency hampers the network’s ability to address such challenges through structured decision-making processes.