Hoskinson Calls BIP-361 Incomplete: Quantum Safety Plan Can’t Rescue Pre-2013 BTC

Bitcoin’s latest quantum-hardening concept, BIP-361, aims high: force a migration to quantum-resistant addresses by penalizing inertia and potentially safeguard up to 34% of the supply—over 7 million BTC, valued near $536 billion. Charles Hoskinson argues the design still leaves a blind spot: roughly 1.7 million coins ($127 billion) from before 2013, including Satoshi Nakamoto’s presumed holdings, remain effectively unrecoverable.

What BIP-361 actually proposes - The plan unfolds over years in three steps. First, new inflows to known-vulnerable addresses get blocked. Second, legacy coins are frozen to push holders to move. Third, a “recovery” phase is supposed to let stragglers reclaim coins that missed prior deadlines by proving control and migrating to quantum-safe destinations. - The goal is to preempt “Q-Day” by draining risk from older signature schemes before a capable adversary can exploit them.

Hoskinson’s critique, distilled Hoskinson’s issue is narrow but important: coins from 2013 and earlier—before BIP-39 standardized seed phrases—often cannot practically attest ownership under the proposed recovery logic. He says about 1.7 million BTC fall into that bucket and would not be recoverable, despite the final-phase promise. He’s blunt that this makes the “recovery” claim overstated. He also notes at least 1.1 million of those coins are attributed to Satoshi, an ~$82 billion trove per Arkham Intelligence.

Why this gap exists Pre-2013 coins include outputs tied to older key generation practices and address types that may not support the proofs BIP-361 envisions. If the holder can’t produce a valid signature or deterministic proof of control, the chain cannot distinguish a lost key from a passive owner. Quantum risk compounds this: once a public key is exposed on-chain, a sufficiently advanced machine running Shor’s algorithm could derive the private key. For genuinely lost wallets, there’s nothing to prove—and nothing to migrate.

The real problem BIP-361 can’t solve This is less about cryptography and more about coordination and legitimacy. Freezing legacy UTXOs is a social decision that rewrites incentives. It nudges responsible holders to move while acknowledging that a nontrivial portion of early coins may be unclaimable. Bitcoin’s culture prizes ossification, so any scheme that freezes coins—even to prevent theft—will face resistance from those who see it as stepping over a line on property rights. Yet inaction risks silent extraction by quantum-equipped thieves in the 2030s, a scenario Hoskinson says is otherwise inevitable.

Governance friction is the tell. Chains with on-chain governance—Cardano, Polkadot, Tezos—can ratify and parameterize migrations with clearer process. Bitcoin relies on rough consensus and overwhelming social buy-in. That model avoids capture, but it slows urgent, contentious changes. BIP-361’s phased path is a pragmatic attempt to do the least violence to Bitcoin’s norms while reducing attack surface, but it cannot conjure signatures for dead keys or pre-BIP-39 wallets that never had recoverable seed phrases.

Market and timeline context The timetable is compressing. In March, Google set 2029 as its internal deadline to move to post-quantum cryptography—an external signal that the window for baseline upgrades is narrowing. If Bitcoin waits until capabilities are demonstrated publicly, it waits too long. BIP-361 is damage control: it likely saves millions of coins, but not the oldest tranche that shaped Bitcoin’s mythos.

My take Treat BIP-361 as necessary triage, not a universal rescue. It meaningfully hardens the live edge of Bitcoin’s UTXO set, but it won’t revive coins that cannot prove life. The community will need to decide whether freezing is acceptable stewardship or unacceptable precedent, and do it before the math forces the outcome. If you want those coins safe, you need signatures; if you want signatures, you need owners; and for much of pre-2013 Bitcoin—including Satoshi’s presumed stash—you probably have neither.