Proposal for Freezing Dormant Bitcoin
Changpeng Zhao, the founder of Binance, has put forth a thought-provoking idea for the Bitcoin community: potentially freezing dormant BTC that may be at risk from quantum computing, if their respective owners do not take action after an impending network upgrade to enhance cryptographic defenses. During a conversation with Alex Thorn, the head of Galaxy Research, Zhao suggested providing a grace period of six to twelve months for holders to migrate their coins to new, quantum-resistant addresses. Should they choose not to act by the end of this timeframe, those dormant addresses might be locked, preventing any access through a protocol modification.
Concerns Over Quantum Computing
This proposal goes beyond just the wallets believed to belong to Bitcoin’s pseudonymous creator, Satoshi Nakamoto, which are under scrutiny for holding between 1 million and 1.1 million BTC. Zhao made it clear that he is not advocating for the personal freezing of these coins by Binance or any individual, but rather fostering a collective discussion among the Bitcoin ecosystem, including users, miners, and developers, on the implications of quantum technology being able to reverse-engineer private keys from public keys.
The core of the issue lies in how Bitcoin relies on cryptographic signatures tied to private keys to establish ownership. If sufficiently advanced quantum computers emerge, they could theoretically compute a private key from a known public key, enabling unauthorized access to the funds. New research from Google’s Quantum AI has stirred renewed interest in this threat, suggesting that breaking the digital signature cryptography might require less than 500,000 qubits, a figure significantly lower than earlier predictions, although the technology to reach that capacity has yet to materialize in commercial settings.
Current Vulnerabilities
As of March, it has been estimated that over a third of Bitcoin had public keys publicly exposed, with the number of potentially vulnerable addresses surrounding 6.9 million BTC. The Satoshi-linked wallets draw particular attention, as identified through the Patoshi pattern by researcher Sergio Demian Lerner, who inferred that the Bitcoin creator mined a significant amount of BTC in its early years. Based on the current price of Bitcoin, these holdings could be valued at around $65 billion.
Proposed Bitcoin Upgrade
Zhao’s suggestion of a prospective Bitcoin upgrade aimed at integrating quantum-resistant addresses would ideally ensure that users are informed in advance to migrate their cryptocurrencies. After the designated migration window, coins left in vulnerable addresses would be rendered unspendable according to the new rules. This measure seeks to secure dormant coins from potential theft by quantum attackers after they break traditional cryptographic protections.
Challenges and Consensus
Nonetheless, Zhao recognized that achieving consensus on this matter would be challenging, given that freezing coins clashes with Bitcoin’s fundamental principle of ownership based solely on valid private-key signatures. Moreover, isolating Nakamoto’s wallets from those of other early miners presents additional complexities, making it likely that any eventual solution would need to classify vulnerable addresses collectively rather than attributing them to specific entities.
A resolution could be determined through signaling among miners and broader engagement across the Bitcoin community, Zhao noted, while he cautioned that maintaining accessibility to these vulnerable coins could invite opportunistic attacks by quantum hackers.
Related Proposals and Opinions
His statements reflect similar sentiments found in BIP-361, a draft proposal by researcher Jameson Lopp and others, which advocates for a gradual phasing out of specific vulnerable address types after the activation of quantum-resistant alternatives. This plan involves suspending transactions to at-risk addresses three years post-activation, followed by invalidating old signatures two years later, thus providing ample time for users to transition.
Supporters argue that preemptively freezing exposed coins could be less detrimental than allowing them to fall into the hands of an attacker wielding quantum capabilities. Conversely, critics raise concerns that invalidating established signatures represents a form of confiscation, undermining Bitcoin’s core protections for property. Meanwhile, government initiatives are advancing toward a future with post-quantum cryptography, urging federal agencies to transition away from existing cryptographic standards, alongside a push for enhanced funding for quantum computing and research into security solutions.
