Bitcoin: Critics Say BIP-361 Freezes Could Hit Monetary Premium

Bitcoin developers are debating BIP-361, a proposal to add protocol rules that would make certain legacy bitcoin outputs unspendable if owners do not move funds to post-quantum addresses. Critics say the change could lock an estimated 30–35% of the supply.

Supporters describe BIP-361 as a defense against future quantum computers that could break the Elliptic Curve Digital Signature Algorithm (ECDSA) used by many legacy addresses. A consulting firm has estimated quantum capability could appear between 2027 and 2030, a timeframe that backers cite to justify migration or enforced freezes.

Under the proposal, coins that fail to migrate would become frozen to prevent what proponents call a “silent drain” from high-value dormant wallets. Some backers also say permanently locking dormant or lost coins would reduce circulating supply and could lift scarcity.

Opponents say the proposal would change bitcoin’s established rules on ownership and immutability. Frederic Fosco, co-founder of OP_NET, called the scarcity argument a cover for confiscation and argued the mechanism matters more than the math. He added, “The consequence nobody is modeling is the monetary premium collapse.”

Developers and users are discussing alternatives that do not force migration. BIP-360 and post-quantum signature schemes such as ML-DSA offer opt-in paths to quantum-resistant addresses. Fosco urged efforts on tools and education rather than consensus enforcement and wrote, “Stop trying to save people from themselves through consensus rules. Quantum-resistant solutions exist right now. Ship opt-in post-quantum address types, educate holders, build better wallets, make migration the obvious path. But never make someone’s bitcoin unspendable because they didn’t upgrade on your schedule.”

Critics also cite a potential precedent risk. They say a protocol ability to freeze coins for quantum safety could later be repurposed to freeze assets for sanctions, dormancy taxes, or other policy reasons. Fosco warned, “Cross that line and you’ve built a system that can freeze any coins for any reason deemed important enough. Today it’s quantum. Tomorrow it’s sanctions or dormancy taxes.”

The debate centers on trade-offs between technical risk from quantum advances and the rules that define bitcoin ownership. With a cited 2027–2030 window for quantum relevance, developers and the community face choices about mandatory freezes, opt-in migration, or other protections that will affect how the network balances security measures with the protocol’s existing property rules.