BIP-361: Bitcoin faces the quantum threat
Quantum computing is no longer a theoretical threat confined to research labs. It is advancing, and the Bitcoin network knows it. In this context, cypherpunk Jameson Lopp, a historical figure in the ecosystem, along with five researchers, submitted BIP-361. This is a three-phase upgrade proposal designed to protect the network before a sufficiently powerful quantum computer can break the cryptographic keys of older wallets.
The proposal is radical in its design. Initially, users would be forced to migrate their funds to quantum-resistant addresses. Next, sending funds to old addresses would be banned within three years of activation. Finally, and this is where the debate heats up, obsolete signatures would simply be invalidated five years after activation. In other words, unmigrated Bitcoins would be frozen, inaccessible, and lost to their owners.
This mechanism relies on zero-knowledge proofs to allow holders to prove ownership of their funds without exposing their vulnerable public keys. It is technically elegant but politically explosive in a community that places individual sovereignty above almost everything else. To understand the technical implications of this type of upgrade on the Bitcoin blockchain, the debate touches on the very foundations of the protocol.
1.7 million BTC affected, including Satoshi’s stash
This is the figure shaking the market. If BIP-361 is activated, approximately 1.7 million BTC could be immobilized due to a lack of migration. This includes the funds attributed to Satoshi Nakamoto, estimated at over $74 billion at current prices. These coins have never moved since they were mined in 2009 and 2010. Their permanent freeze would represent a massive contraction of the circulating supply.
Mechanically, this reduction in available supply constitutes an unprecedented deflationary shock in the history of Bitcoin. Historically, whenever the supply contracts significantly, upward pressure on the price intensifies. The halving is the most well-known example, but the BIP-361 effect would be on an entirely different scale if the projections are confirmed.
Market impact: A long-term catalyst?
The price of BTC is currently holding around $74,000, close to its recent ATH, but the controversy surrounding BIP-361 is generating notable FUD within the community. Decentralization purists are crying censorship. Some miners are already mentioning the possibility of a hard fork if the proposal were to be imposed against their will. For traders following Bitcoin technical analysis, the support levels to watch are between $68,000 and $70,000 in the event of an escalating debate.
In the short term, uncertainty weighs heavy. Trading volumes and the behavior of crypto whales will be decisive. If large wallets maintain their positions despite the controversy, it will signal that the market views BIP-361 as a positive medium-term catalyst rather than an immediate threat.
The real question: Decentralization or network survival?
This is the dilemma posed by BIP-361 with brutal clarity. Freezing unmigrated funds, even Satoshi’s, means accepting that no address is sacred in the face of a systemic threat. It is a major philosophical break for a network built on immutability and censorship resistance. Our guide to decentralized finance helps measure just how much this type of decision goes against the founding principles of the movement.
Yet, the alternative is worse. If sufficiently powerful quantum computers arrive before the network is protected, old publicly exposed P2PK addresses could be drained en masse. The nightmare scenario would include the theft of Satoshi’s coins, a brutal collapse in trust, and potentially the end of Bitcoin as we know it.
For investors following Bitcoin price predictions, BIP-361 should be treated as a background event to monitor over several quarters, not as an immediate trading signal. Institutions, on the other hand, might see it as proof of the network’s ability to evolve in the face of real threats, which would strengthen the long-term Bitcoin investment thesis.
Sources:
- CoinDesk
- Cointelegraph on X
- X (murchandamus / KillaXBT)
- TradingView
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