A controversial hard fork of Bitcoin may be needed to resolve an impossible choice between freezing the BTC in addresses owned by Satoshi Nakamoto and the early miners, or seeing them stolen and dumped in a potential quantum attack.
That’s according to Bitcoin Core developer and Blockstream co-founder Matt Corallo, who said recently the outcome of such a fork is pre-ordained.
The Sophie’s Choice style dilemma is caused by the fact that around 1.72 million coins in these early pay-to-public-key (P2PK) mining addresses are quantum vulnerable and have been dormant for 15 years or more. Chainalysis estimates that a further 1.1 million-2.1 million Bitcoin has been permanently lost. A large percentage of that is in addresses with exposed public keys.
The only way to make Bitcoin post-quantum secure is for the owners of the private keys to move it to secure addresses themselves. So even after BIP-360 is activated and after a post-quantum signature scheme is eventually added, between 13% and 18% of the total Bitcoin supply will remain in vulnerable addresses. That would potentially leave a honeypot for quantum attackers worth up to $270 billion.
The theft and sale of even a fraction of that amount would destroy the price and strike a heavy blow to Bitcoin’s reputation as immutable hard money. For those who bought Bitcoin based on its hard cap supply and low inflation, 4 million coins is the equivalent of adding the past decade’s worth of Bitcoin mining block rewards to the circulating supply.
Some Bitcoiners argue it’ll never happen. Others say that when quantum computers are invented, it will be too expensive and take too long to crack all the affected addresses. But does the community want to take that risk?
Burn the lost Bitcoin to prevent quantum theft
The obvious solution is to make these coins non-transferable, so they can’t be stolen. Jameson Lopp co-authored QBIP, which would prevent coins from being sent to quantum-vulnerable addresses after a deadline of three years after BIP-360’s activation. Five years after that, funds in those addresses would no longer be able to be spent.
“If we don’t do anything, we’re kind of killing the hard-money, fixed-supply ethos of Bitcoin because we’re unlocking 20%-30% supply for hackers. That is going to kill trust,” says Charles Edwards, founder of Capriole.
However, zeroing out the value of millions of dormant coins, including those mined by Bitcoin’s creator, is vehemently opposed by a sizable contingent of Bitcoiners, who believe it undermines the immutable private property rights that Bitcoin offers.
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But Edwards says a carefully planned migration is the “lesser of two evils.” He believes 99.9% of active Bitcoin owners would migrate. Only the outliers, such as people stuck in prison, would be unable to move coins.
“We’re worrying about coins which are never going to be recovered because they’re in landfills and tips where people lost their keys five, 10 years ago. Satoshi is probably dead, et cetera. So, I don’t think we’re, we’d be impacting many people at all on that, if any, and the net benefit to everyone would be substantial.”
Despite this, he’s resigned to the status quo prevailing. “I think the most probable outcome is nothing will happen on that topic because it’s too hard to discuss and to get any agreement on. So, the probable outcome is to do nothing,” he says.
What would Satoshi do about the quantum issue?
A social media poll by Cointelegraph found that roughly two-thirds of respondents favor freezing these coins, while a third are opposed. (Social media polls aren’t scientific, and the poll wasn’t of Bitcoiners exclusively.)
On the “Pleb Underground” podcast, BIP-360 co-author Hunter Beast raised the intriguing possibility that Satoshi may have actually intended for the early coins to be returned to the supply. He noted that the original Bitcoin client in 2009 had two address types to receive payments and defaulted to one that exposed the public keys for mining rewards.
Satoshi would likely have been aware of Shor’s algorithm, which was invented 15 years earlier and can theoretically reverse engineer private keys from public keys via a quantum computer.
Beast called it an “interesting choice in hindsight” to default to that address type for “people who might have lost their keys early on and not have realized the value of what they were doing.”
“It could…
cointelegraph-magazine.com