Bitcoin Security Proposal BIP-361 "Frozen Satoshi Bitcoin" to Prevent Quantum Attacks, Community Criticizes: Confiscating Decentralization

Crypto Punk Jameson Lopp and five other researchers in quantum-safe Bitcoin jointly proposed BIP-361, which plans to “freeze” all quantum-vulnerable addresses’ bitcoins through a three-stage mechanism—including approximately 1.1 million coins held by Satoshi, worth over $74 billion—preventing future quantum computers from stealing them. Once the proposal was released, it sparked strong community backlash, with critics calling it “authoritarian” and “ridiculous,” igniting one of the sharpest philosophical conflicts in Bitcoin history.
(Background summary: Technical analysis » Bitcoin’s actual volatility rises to 62%, 200-day moving average now bearish)
(Additional background: [Liu Xishen’s deep discussion] The three fundamentals of Bitcoin’s “uniqueness”: Why I choose Bitcoin over blockchain?)

Table of Contents

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• The three-stage design of BIP-361: from banning transfers to permanent freezing
• The author’s core logic: freezing > laissez-faire
• Community’s fierce backlash: “Steal money to prevent theft”
• BlockVision perspective: Who has the authority to decide which UTXOs “should be frozen”?

Freezing Satoshi’s bitcoins to preserve Bitcoin—this is the stance proposed by Jameson Lopp and co-authors in the draft of BIP-361 published on April 14, 2026, addressed to the entire Bitcoin community.

The full name of the proposal is “Post Quantum Migration and Legacy Signature Sunset,” aiming to enforce a network-wide transition to quantum-resistant addresses before quantum computers can crack elliptic curve encryption; for old addresses that refuse or cannot migrate, the proposal will freeze their coins, making them unusable by anyone—including quantum attackers.

The scale of the issue is significant: as of March 1, 2026, over 34% of the total Bitcoin supply has exposed public keys on-chain, meaning these UTXOs are theoretically vulnerable to quantum computers. Most notably, about 1.7 million BTC are locked in early P2PK addresses, including an estimated 1.1 million held by Satoshi himself (worth over $74 billion at current prices).

The three-stage design of BIP-361: from banning transfers to permanent freezing

BIP-361 builds on the foundation of BIP-360, released in February 2026. BIP-360 proposes introducing a new output type, P2MR (pay-to-Merkle-root), via soft fork, similar to current Taproot (P2TR), but removing quantum-vulnerable key paths, providing quantum resistance for new funds. However, BIP-360 only protects new coins; it does nothing for the 34% of vulnerable existing UTXOs—hence BIP-361 was created.

The proposal has three execution phases:

Phase A (3 years after activation): Ban any new BTC transfers into old addresses, forcing all users to migrate funds to quantum-resistant address types. This phase provides ample buffer time for holders.

Phase B (5 years after activation): Revoke all old signatures. BTC remaining in vulnerable addresses will be effectively “permanently frozen”—unable to be spent by the original holders or stolen by quantum attackers.

Phase C: Provide a zero-knowledge proof (ZKP) rescue mechanism. Users who miss the deadline but still hold seed phrases can prove ownership via ZKP without revealing private keys, allowing them to recover funds after freezing. For UTXOs before BIP-32 (e.g., P2PK addresses), since HD wallet ownership proofs cannot be constructed, the authors support introducing the Hourglass scheme as a rescue path for these special cases.

The author’s core logic: freezing > laissez-faire

Lopp and others present a precise economic framework to justify the proposal: lost or frozen coins will cause the remaining coins to slightly appreciate (a deflationary effect due to supply contraction); but if a quantum computer steals these coins and then dumps them on the market, all holders’ coins will depreciate significantly.

Faced with these two harms, the authors believe the answer is clear. Lopp explicitly states in the proposal:

“This is not an offensive attack but a defensive measure: our argument is that the Bitcoin ecosystem wants to defend its interests against those who prefer to do nothing and allow malicious actors to destroy value and trust.”

It’s important to note that the authors do not claim that quantum computers currently have the ability to crack encryption—existing quantum hardware is still far from breaking 256-bit elliptic curve encryption. The premise of the proposal is: assuming quantum technology continues along current trajectories, all P2PK and exposed public key UTXOs will be “almost certainly” cracked at some future point.

Community backlash: “Steal money to prevent theft”

Bitcoin protocol developer Mark Erhardt (@murchandamus) shared BIP-361 on X (Twitter) Tuesday, immediately triggering strong community reactions, with criticism extending from technical concerns to fundamental ethical debates.

Bitcoin Magazine editor Brian Trollz outright rejected the proposal; TFTC founder Marty Bent called it “laughable”; Metaplanet business development head Phil Geiger succinctly summarized the core contradiction: “We have to first steal people’s money to prevent their money from being stolen.”

User @CatoTheElder17 offered a more systematic critique: “This quantum proposal is highly authoritarian and confiscatory… there’s no legitimate reason to force an upgrade and invalidate old outputs.”

Opponents point to an unwritten rule in Bitcoin: no UTXO can be revoked at protocol level. BIP-361 is the first in Bitcoin history to introduce a mechanism—“if not upgraded, then lost”—at the protocol layer. Even if the initial motivation is to protect holders, setting this precedent makes many uneasy. Others like Adam Back are more optimistic, believing Taproot already provides sufficient buffer, and the development of quantum computers may not be as rapid as the proposal assumes.

BlockVision perspective: Who has the authority to decide which UTXOs “should be frozen”?

The core of this controversy isn’t whether quantum computers threaten Bitcoin—technical data already shows: 34% of supply is at potential risk, and 1.7 million BTC is a real black swan.

The real issue is: the social cost of the solution. If BIP-361 passes, Bitcoin will have its first “freezing mechanism.” Even if the motivation is purely defensive, establishing the logic that “certain UTXOs can be declared invalid” at the protocol level sets a precedent for future measures driven by “reasonable reasons.” The core narrative of Bitcoin’s “inalienable property” will have an exception.

If the proposal is rejected, the community must bet that quantum development will be slower than expected—and the stakes are every coin in everyone’s wallet.

The proposal is still in draft form, far from any consensus or actual implementation, and a long road lies ahead. But BIP-361 has already achieved one thing: forcing the Bitcoin community to confront a previously avoided issue—when doing nothing becomes dangerous, is “not moving” still an option?