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Cardano's Charles Hoskinson says Bitcoin's quantum fix is a hard fork that can't save Satoshi's coins

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4 hours ago
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What to know : Cardano founder Charles Hoskinson says Bitcoin's proposed quantum defense, BIP-361, is mischaracterized as a soft fork and would in practice require a hard fork that conflicts with Bitcoin's anti–hard fork culture. He argues the plan's zero-knowledge recovery mechanism cannot protect about 1.7 million older bitcoins, including roughly 1 million attributed to Satoshi Nakamoto, because those coins were created before BIP-39 seed phrases existed. Hoskinson contends that if adopted as written, BIP-361 would permanently freeze those early coins and highlights this as evidence that Bitcoin's lack of formal on-chain governance leaves it ill-equipped to handle such contentious upgrades. Cardano founder Charles Hoskinson argues that Bitcoin's proposed quantum defense, BIP-361, is wrongly labeled a soft fork and would effectively require a hard fork that clashes with Bitcoin's longstanding resistance to such changes. He says the plan's zero-knowledge recovery scheme cannot protect about 1.7 million older bitcoins, including roughly 1 million attributed to Satoshi Nakamoto, because those coins predate BIP-39 seed phrases and lack the necessary cryptographic proofs. Hoskinson contends that, if adopted as written, BIP-361 would permanently freeze those early coins and sees the controversy as evidence that Bitcoin's absence of formal on-chain governance leaves it poorly equipped to manage high-stakes protocol upgrades.

Bitcoin's core developers earlier this week proposed freezing 8 million coins to defend against quantum attackers.

But Cardano founder Charles Hoskinson believes it still can't save coins belonging to the network's pseudonymous creator Satoshi Nakamoto, per a video posted to his YouTube channel late Wednesday.

Hoskinson said Bitcoin's proposed defense against quantum computers is both technically mislabeled and structurally incapable of protecting the network's oldest coins, including the roughly 1 million bitcoin attributed to Satoshi Nakamoto.

He argued that BIP-361, the proposal from developer Jameson Lopp and others to phase out quantum-vulnerable bitcoin addresses, is being presented as a soft fork but would functionally require a hard fork because it invalidates existing signature schemes that users are actively relying on.

"To actually do this, you need a hard fork," Hoskinson said. The distinction matters because Bitcoin's development culture has historically opposed hard forks, viewing them as violations of the network's immutability. BIP-361 authors have described the proposal as a soft fork, a characterization Hoskinson called a lie.

A soft fork tightens the rules so old software still works but can't use the new features. A hard fork changes the rules so fundamentally that old software stops working entirely and the network splits unless everyone upgrades.

BIP-361 suggests that users with frozen quantum-vulnerable funds could reclaim them by constructing a zero-knowledge proof tied to their BIP-39 seed phrase, a standard for generating wallet keys from a recoverable phrase.

Hoskinson argued this approach cannot rescue approximately 1.7 million bitcoin that predate BIP-39's introduction in 2013, including the roughly 1 million coins associated with Satoshi's early mining activity.

Those early coins were generated using a different key derivation method from the original Bitcoin wallet software, which relied on a local key pool rather than a deterministic seed.

There is no seed phrase to prove knowledge of, which means no zero-knowledge recovery scheme built on that assumption can return access to the holders.

"1.7 million coins can't do that. It's not possible. 1.1 million of which belong to Satoshi," Hoskinson said.

If the proposal passes in its current form, those coins would remain permanently frozen regardless of whether their original owners ever attempt to migrate, because migration would require cryptographic proof they are unable to provide.

Jameson Lopp, the core developer who co-authored BIP-361, acknowledged in a post on X this week that he does not like the proposal and hopes it never needs to be adopted, describing it as "a rough idea for a contingency plan" rather than a finalized specification.

Lopp has argued that freezing dormant coins, which he estimates at 5.6 million bitcoin, would be preferable to allowing a future quantum attacker to recover and dump them on the market.

Hoskinson's broader critique extends beyond the technical details. He argues that Bitcoin's lack of formal on-chain governance leaves the network unable to resolve these tradeoffs through a structured process, forcing contentious upgrades to be negotiated through developer mailing lists and social pressure.

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