In a groundbreaking move to address the looming threats posed by quantum computing, a new Bitcoin Improvement Proposal (BIP) has been put forth by Jameson Lopp, co-founder of Casa, alongside a small team of experts. This bold initiative, titled “Post-Quantum Migration and Legacy Signature Sunset,” aims to arm the Bitcoin network against potential quantum attacks. Released on GitHub on July 14, this proposal highlights the urgency for developers and users to initiate a migration away from existing signature protocols such as ECDSA and Schnorr. The central message conveyed by the authors is clear: “Failing to upgrade could result in irreversible loss of access to your funds.”

A Strategic Approach to Quantum Security

The threat posed by quantum computers is significant. With the ability to potentially recover private keys connected to public wallet addresses, the study reveals that around 25% of all Bitcoin have public keys exposed on-chain, leaving them vulnerable to malicious exploitation if quantum computers become viable. This vulnerable segment notably includes early outputs linked to Bitcoin’s enigmatic founder, Satoshi Nakamoto, which could see around one million BTC at risk.

Notably, the National Institute of Standards and Technology (NIST) has approved three robust post-quantum signature algorithms in 2024, and projections suggest that a “cryptographically relevant” quantum computer could emerge as early as 2027-2030. As quantum factoring techniques improve, the urgency for the Bitcoin community to act before vulnerabilities escalate is paramount.

To combat these emerging threats, the proposed draft outlines a structured soft-fork plan associated with the P2QRH post-quantum output type detailed in BIP-360:

Phase A: To commence three years post the P2QRH launch, with a focus on eliminating fund transfers to addresses susceptible to quantum threats, thus urging users towards adopting quantum-resistant scripts.

Phase B: Following a two-year period, a predetermined cutoff day will enforce a policy where transactions using ECDSA/Schnorr keys are rejected, rendering older outputs unusable.

Phase C: This optional segment would allow users who miss the upgrade window to retrieve their funds using a zero-knowledge proof demonstrating ownership of their BIP-39 seed, contingent on ongoing research advances.

The authors are forthright in their reasoning: “A successful quantum assault on Bitcoin could provoke profound economic upheaval, impacting the entire ecosystem.” By instituting a clear deadline, they aim to catalyze progress among wallets, exchanges, and custodians that have traditionally lagged in protocol updates.

Stakeholders across the spectrum are presented with stark realities. Miners, failing to adapt post-Phase B, face the risk of producing “invalid blocks,” whilst in the interceding period can expect heavier blocks and increased fees due to larger quantum-safe signatures. Institutional investors may shoulder fiduciary consequences if they neglect the upgrade, while exchanges risk insolvency if quantum breaches occur, jeopardizing custodial assets. For average users, the imploring nature of the sunset date converts a distant threat into an immediate obligation.

A crucial point raised by the proposal is that funds trapped in quantum-vulnerable addresses would become irrevocably inaccessible. This realization parallels Satoshi’s earlier observation: “Coins that are lost enhance the value of the remaining coins.” Yet, the proposal pivots this notion, indicating that “quantum-recovered assets represent a theft from the entire community.”

As a draft, the BIP is still in its preliminary stages and is yet to be formally numbered or activated using the taproot mechanism. However, it is already stirring an anticipated debate about backward compatibility and the management of dormant balances. Should the migration be adopted, it stands to dwarf both SegWit and Taproot in terms of logistical scope and financial impact, potentially affecting a quarter of the 19.7 million BTC currently in circulation.

The stakes are undeniably high: the community must rally around a proactive timeline, or it faces the grim reality of responding reactively once the first quantum theft occurs.

As of the latest data, BTC is trading at $118,623.