Bitcoin Community Divided Over Quantum Security Proposal That Would Freeze Vulnerable Holdings

Cypherpunk Jameson Lopp and five co-authors have published BIP-361, a controversial proposal to freeze quantum-vulnerable bitcoin holdings on the network—including Satoshi Nakamoto's estimated $74 billion stash—once quantum computers become a realistic threat. The proposal, labeled "Post Quantum Migration and Legacy Signature Sunset," was posted as a draft to GitHub this week and represents the second phase of a three-stage quantum security strategy for crypto.

The Quantum Threat Is Real

Here's what we're dealing with: roughly 1.7 million BTC sits in early P2PK addresses that aren't quantum-resistant. That's about 34% of Bitcoin's total supply still vulnerable to theft if someone develops a sufficiently powerful quantum computer. Satoshi's coins alone represent $74 billion in potential exposure. In the wrong hands, this could tank network confidence and destabilize Bitcoin's entire value proposition.

BIP-361 builds on BIP-360, released in February, which introduced a new output type called pay-to-Merkle-root (P2MR)—essentially a quantum-safe version of Taproot addresses. The difference: P2MR removes the quantum-vulnerable key path entirely. While BIP-360 protects new bitcoin going forward, it does nothing for coins already locked in outdated addresses unless they're moved.

How the Three-Phase Plan Works

Phase A (Year 3 post-activation): New bitcoin transfers to old-style addresses get blocked. Everyone's supposed to migrate to quantum-resistant address types.

Phase B (Year 5 post-activation): The real teeth—old signatures become invalid, and any bitcoin still sitting in vulnerable addresses freezes permanently.

Phase C: A safety valve using zero-knowledge proofs that lets people who missed deadlines but still have their seed phrases recover frozen funds.

The authors framed frozen coins as a "private incentive to upgrade" since lost coins make everyone else's holdings marginally more valuable. They positioned this as defensive, not offensive: "This is not an offensive attack, rather, it is defensive: our thesis is that the Bitcoin ecosystem wishes to defend itself and its interests against those who would prefer to do nothing and allow a malicious actor to destroy both value and trust."

Community Backlash Is Fierce

Not everyone's buying it. Bitcoin protocol developer Mark Erhardt shared BIP-361 on X, triggering sharp criticism. Community members called the proposal "highly authoritarian and confiscatory" with "no good rationale for forcing the upgrade."

Bitcoin Magazine editor Brian Trollz outright rejected it. TFTC founder Marty Bent called it "laughable." Phil Geiger, head of business development at Metaplanet, delivered a cutting summary: "We have to steal people's money to prevent their money from being stolen."

The core tension: freezing UTXOs renders some existing holdings unspendable if owners fail to upgrade—a philosophical departure from Bitcoin's ethos of user sovereignty. Many see this as antithetical to what crypto stands for.