Key Takeaways
- Charles Hoskinson, founder of Cardano, claims Bitcoin’s quantum security measure BIP-361 is incorrectly presented as a soft fork but would effectively function as a hard fork.
- The BIP-361 protocol aims to lock quantum-susceptible Bitcoin addresses and force migration to quantum-resistant alternatives.
- Approximately 1.7 million Bitcoin mined before the 2013 BIP-39 seed phrase standard cannot be recovered using BIP-361’s zero-knowledge proof mechanism.
- An estimated 1.1 million BTC attributed to Bitcoin creator Satoshi Nakamoto would face permanent lockup under this framework.
- By March 2026, over 34% of circulating Bitcoin supply will have publicly exposed keys, making them vulnerable to future quantum attacks.
Cardano’s Charles Hoskinson has launched a scathing critique of Bitcoin’s planned quantum computing countermeasure, arguing that its technical classification is misleading and that it fails to safeguard the blockchain’s earliest holdings.
The contentious measure is known as BIP-361, a collaborative effort spearheaded by Bitcoin core developer Jameson Lopp alongside several contributors. The framework seeks to disable Bitcoin addresses susceptible to quantum threats by locking associated funds and requiring holders to transition to quantum-safe alternatives.
During a recent livestream, Hoskinson referenced statistics indicating that by March 1, 2026, upwards of 34% of the entire Bitcoin supply will have exposed public keys recorded on the blockchain. This translates to approximately 8 million BTC potentially at risk from advanced quantum computing systems.
While BIP-361 incorporates a zero-knowledge proof mechanism designed to help users verify ownership and recover locked assets following migration, Hoskinson contends this system fails for around 1.7 million Bitcoin stored in legacy wallets predating BIP-39.
These early-generation wallets operated using the original Bitcoin client’s key pool system rather than modern recoverable seed phrases. BIP-39 didn’t gain widespread adoption until approximately 2013, leaving earlier holdings without the necessary infrastructure to generate zero-knowledge proofs.
“1.7 million coins can’t do that. It’s not possible. 1.1 million of which belong to Satoshi,” Hoskinson said.
The Hard Fork Debate
Beyond concerns about recovery limitations, Hoskinson took issue with how BIP-361 characterizes its implementation approach. Despite being labeled a soft fork, he maintains the proposal would realistically demand a hard fork since it would invalidate signature schemes currently operational on the network.
“To actually do this, you need a hard fork,” Hoskinson said. Bitcoin has never executed a hard fork, and its development culture has historically opposed doing so.
Lopp himself conceded on X recently that he harbors reservations about the framework, characterizing it as “a rough idea for a contingency plan” still far from finalized implementation.
Lopp has maintained that freezing inactive holdings — which he calculates at roughly 5.6 million Bitcoin — would be superior to allowing a quantum adversary to decrypt and dump them onto exchanges.
Governance and Institutional Pressure
Hoskinson further contended that Bitcoin’s absence of formalized on-chain governance mechanisms leaves it ill-equipped to handle decisions of this magnitude. He highlighted blockchains like Cardano, Polkadot, and Tezos as examples of networks with established governance frameworks capable of resolving such matters through transparent community voting.
He speculated that major institutional stakeholders, including asset management firms that have accumulated substantial Bitcoin positions recently, will ultimately compel Bitcoin’s development community to take action despite grassroots opposition.
Should BIP-361 be implemented as currently drafted, the approximately 1.7 million pre-2013 Bitcoin holdings would remain locked indefinitely with no recovery mechanism available.
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