Is Your Bitcoin at Risk? BIP-361 Could Freeze Your Assets Before It’s Too Late!

by

Your <a href="https://bbg-news.com/btc-usd/">Bitcoin</a> Could Be Frozen. BIP-361 Just Made That Conversation Official

Bitcoin Core has integrated a plan, called BIP-361, to prepare for the potential threat of quantum computers. This update could effectively lock up older Bitcoin transactions that rely on current encryption methods *before* quantum computers become powerful enough to break them.

On April 15th, developers working on Bitcoin Core officially accepted a proposal called BIP-361. Its straightforward title, “Post Quantum Migration and Legacy Signature Sunset,” explains its purpose: to gradually replace older digital signature methods (ECDSA and Schnorr) before the emergence of powerful quantum computers renders them insecure. The plan, created by Jameson Lopp and five collaborators, details how this transition will happen in stages.

As of March 1, 2026, my analysis of the BIP-361 proposal shows that over 34% of all bitcoins had publicly exposed keys recorded on the blockchain. This means those bitcoins, represented as UTXOs, are completely vulnerable to attack by anyone who develops sufficient quantum computing power.

The 1.7 Million BTC Nobody Talks About Losing

The process happens in three stages. First, after about three years, the system stops accepting new transactions that use older locking methods. The second stage, which is currently causing debate, will reject any transactions that only use ECDSA or Schnorr keys at a specific point in time.

Lopp has been working on these concepts since the middle of 2025. This new proposal, called a BIP, is based on a previous one (BIP-360) that introduced a new way to structure transactions called pay-to-Merkle-root. The earlier proposal removed the spending method that relies on keys, which is the most vulnerable part when considering the potential threat of quantum computing.

According to WuBlockchain on X, the proposal focuses on older P2PK addresses whose public keys are already visible on the blockchain. These exposed keys are the main weakness the proposal aims to fix.

Approximately 1.7 million Bitcoin, including coins originally held by Satoshi Nakamoto, are estimated to be in early, unused wallets. With Bitcoin currently valued around $74,000 each, these coins represent a total value of roughly $74 billion.

Phase C Is Where Things Get Complicated Fast

As the BIP editor who finalized the merge, I’ll be upfront: I personally don’t foresee a practical quantum computing threat to Bitcoin for several decades. However, I still moved the proposal forward for community review. I want to be clear that publishing it as a Draft doesn’t mean I endorse the ideas – it simply indicates they’re relevant to Bitcoin and ready for broader discussion.

I found Ethan Heilman’s review on GitHub quite positive – he called the BIP ‘excellent.’ However, he did push Lopp for a clearer explanation of the decision to reject legacy transactions instead of simply freezing the vulnerable outputs. He rightly pointed out that there’s a significant difference between those two approaches, and understanding that difference is important.

As a crypto investor, I’m looking at Phase C as a potential way to get my funds back if they’ve been frozen. Basically, if you have an HD wallet seed phrase, the idea is you could create a special, quantum-resistant ‘proof’ to show you rightfully own your coins and get them released. The problem is, that technology doesn’t exist yet. A group called Conduition has pointed out that this ‘proof’ system is absolutely essential for *any* proposal that allows freezing funds, and they believe the current plan is incomplete without it. It’s a really critical piece of the puzzle, and frankly, I won’t feel comfortable with this whole thing until it’s addressed.

The rollout of the new system was paused before it could be officially approved. Lopp explained on GitHub that the necessary requirements hadn’t been fulfilled yet. Specifically, they need to first establish and agree on a secure, future-proof signature method that can withstand advanced computers.

The Community Is Not Quietly Going Along With This

I received some strong feedback on Phase B pretty quickly. One reviewer on GitHub even labeled it “active censorship.” Others argued that the proposal moves away from Bitcoin’s core ideas by introducing permissioned transactions. A different point raised was a practical issue: if quantum coins were stolen, it would be impossible to tell them apart from legitimate ones, meaning simply burning potentially stolen coins wouldn’t solve the problem.

Lopp was clear: users can’t be compelled to move their cryptocurrency. However, he also pointed out that no one is obligated to accept coins using potentially insecure digital signature methods either.

Conduition pointed out a fourth possibility that the BIP didn’t address. This involves limiting how older versions of the system can be used, which could prevent theft from quantum computers while still allowing rightful owners to spend their funds. However, this approach isn’t included in the current draft of BIP-361.

This proposal doesn’t establish timelines or pick a specific post-quantum signature scheme. It simply outlines the steps to take once those decisions are made. That’s why one reviewer noted the technical specifications were brief, while the majority of the document focuses on explaining the reasoning behind the proposal.

BIP-361 quantifies the potential risk of a quantum computer attack on Bitcoin. It estimates that around 34% of all existing Bitcoin – 1.7 million coins – could be stolen gradually over weeks by a sophisticated attacker who avoids immediate detection. This proposal outlining the threat is now officially documented within the Bitcoin project and is being seriously considered.

Read More

2026-04-15 21:20