BIP-361 Controversial Proposal: Should Satoshi's Bitcoins Be Frozen to Fend Off Quantum Computing?
Original Article Title: "Freezing Satoshi's Bitcoin? BIP-361 Proposal Triggers Community's Most Heated 'Quantum Threat' Debate"
TechFlow Summary: Bitcoin developer Jameson Lopp and others officially submitted the BIP-361 proposal on April 14, outlining a three-phase plan to phase out ECDSA and Schnorr signatures, ultimately freezing all early wallets that have not migrated to quantum-resistant addresses.
The proposal involves around 1.7 million BTC held in P2PK addresses (including approximately 1.1 million bitcoins belonging to Satoshi Nakamoto, worth around $74 billion), with about 34% of the total Bitcoin supply at risk of quantum attacks due to exposed public keys. The proposal was met with intense community backlash, with critics calling it "authoritarian confiscation." However, Lopp responded that he would rather freeze 5.6 million dormant BTC than allow them to fall into the hands of quantum hackers.
Well-known cypherpunk and Casa CTO Jameson Lopp, along with five researchers, submitted a draft proposal named BIP-361 to GitHub's bitcoin/bips repository on April 14, titled "Post Quantum Migration and Legacy Signature Sunset."
The crux of this proposal is straightforward: "Before a quantum computer can break existing encryption algorithms, the network should proactively freeze all Bitcoin wallets depending on outdated signature schemes."
According to CoinDesk, Lopp stated in an interview that he does not currently believe these measures need to be implemented immediately, but emphasized that he is "thinking defensively against potential future threats." He further admitted on Platform X, "I know people don't like this proposal. I don't like it either. But I wrote it because I like another outcome even less."
Three-Phase "Sunset Plan": From Restriction to Freezing
BIP-361 builds upon the foundation laid by BIP-360, released in February of this year. BIP-360 introduced a new address format called P2MR (pay-to-Merkle-root), similar to the existing Taproot address but without the vulnerable key path, providing forward secrecy for new coins.
BIP-361 aims to address the issue of the existing supply: as of March 1, 2026, over 34% of the total Bitcoin supply has had its public key exposed on-chain, a figure directly from the BIP-361 document itself.
The proposal outlines three progressive phases:
Phase A will take effect around three years after activation, at which point the network will prohibit sending new BTC to legacy addresses, and all users are expected to have migrated to quantum-resistant address types.
Phase B will take effect around five years after activation, at which point legacy ECDSA and Schnorr signatures will be completely deprecated, and any Bitcoin still held in vulnerable addresses will be effectively frozen.
Phase C is an as-yet-incomplete recourse mechanism envisioned to allow rightful mnemonic holders to recover frozen funds through zero-knowledge proofs.
As reported by Live Bitcoin News, GitHub reviewer Conduition sees Phase C as "the most critical part of any confiscatory freeze proposal" and argues that BIP-361 is incomplete without this mechanism.
The proposal's authors describe the freeze mechanism as an "upgraded private incentive": lost or frozen coins only slightly appreciate the holdings of others, while coins recovered from a quantum attack would devalue everyone's holdings.
5.6 Million Dormant BTC and Satoshi's 7.4 Billion USD Holding
The significance of this debate lies in the immense scale involved.
According to Lopp's estimate, around 5.6 million Bitcoins (28% of the total supply) have not moved in over a decade, with him and other analysts believing these coins are likely lost. At current prices, the value of these dormant coins is approximately $420 billion.
Most notably, Satoshi's holdings hold great symbolism. According to Cointelegraph, approximately 1.7 million BTC are locked in early P2PK addresses, with around 1.1 million BTC attributed to Satoshi, valued at around $74 billion. The public keys of these addresses have long been openly exposed on-chain, and once quantum computing capabilities reach a critical threshold, attackers could use the Shor algorithm to derive private keys from public keys and directly access the funds.
In an interview with CoinDesk, Lopp warned that even without the need for a large-scale sell-off, "as long as there is any credible evidence that someone has the ability to recover lost or vulnerable coins with a quantum computer, the market will immediately see a large-scale panic."
The odds on Polymarket for "Will Satoshi move any Bitcoin in 2026" are currently around 9.3%, up from 4.5% at the beginning of the year, but the reaction to the BIP-361 release has been muted, implying the market still sees it as a governance discussion rather than an urgent catalyst.
Community Pushback: "Stealing to Prevent Theft"
BIP-361 touched on Bitcoin's deepest philosophical tenet: ownership should not come with conditions. As soon as the proposal was made public, criticism quickly emerged.
Bitcoin Magazine editor Brian Trollz directly rejected the proposal; TFTC founder Marty Bent called it "ridiculous"; Metaplanet Business Development Lead Phil Geiger sarcastically remarked, "We must steal people's money to prevent their money from being stolen."
A comment from X platform user Cato the Elder was widely circulated: "This quantum proposal has a highly authoritarian and confiscatory nature... There is no valid reason to force an upgrade and render old spending paths invalid. Upgrades should be 100% voluntary."
Leo Fan, founder of Cysic and former Quantum-Resistant at Algorand, pointed out from a technical governance perspective: "Ownership has become conditional. Holding the key no longer guarantees you can spend. This undermines Bitcoin's promise of being an 'unstoppable currency.'" However, Fan also acknowledged that removing millions of bitcoins from circulation could tighten the supply and drive up the price.
Discussions on the r/cryptocurrency Reddit community were equally heated (the post received 631 upvotes and 311 comments), with the top comment stating: "If you fork to freeze wallets for hedge against investment risk, BTC is no longer BTC." Another user had a completely opposite view: "Let them get hacked, let the price crash for a month. We'll still buy the dip, just like we did during the last existential crisis."
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