Cardano founder Charles Hoskinson has issued a stark warning to the Bitcoin community: the proposed BIP 361 solution for quantum security is actually a hard fork disguised as a soft fork, and could result in the permanent loss of roughly 1.7 million BTC, including Satoshi Nakamoto's holdings.
Stunning Quantum Vulnerability Data
Hoskinson cited data showing that as of March 1, 2026, more than 34% of all circulating Bitcoin (approximately 8 million BTC) have exposed public keys on the blockchain, making them vulnerable to attacks from sufficiently powerful quantum computers. “34% of your supply is vulnerable,” he noted, adding that Satoshi would be the biggest loser.
BIP 361: Soft Fork or Hard Fork?
Authored by six Bitcoin developers including Jameson Lopp, BIP 361 proposes freezing quantum-vulnerable funds and forcing users to migrate to post-quantum addresses. The proposal calls itself a soft fork, but Hoskinson argued that the mechanics required to implement it amount to a hard fork, something Bitcoin has never executed. “To actually do this, you need a hard fork,” he said. “But don't take my word for it—I'm just a 'sh**coiner.' You'll find out later.”
The plan includes a zero-knowledge proof (ZK-proof) recovery system allowing holders of HD wallet seed phrases to reclaim frozen assets. However, Hoskinson pointed out that wallets created before the widespread adoption of BIP 32 and BIP 39 standards (around 2013) cannot use this system. This leaves approximately 1.7 million BTC, including the estimated 1.1 million BTC belonging to Satoshi, unrecoverable via the ZK mechanism. “There is no zero-knowledge proof that I can construct for such a system,” he stated. “I build these systems for a living.” He lamented: “That's 1.7 million coins that will be stolen and dumped. If you had on-chain governance, you could fix it—like we do in Cardano.”
Governance Gap and Institutional Pressure
Hoskinson attributed Bitcoin's core problem to a lack of on-chain governance. He highlighted that chains like Cardano, Polkadot, and Tezos have formal governance mechanisms enabling community votes on protocol-level decisions. Without such a mechanism, Bitcoin faces a dilemma in the 2030s: either let a quantum-capable attacker drain vulnerable addresses and dump a large portion of supply, or execute a hard fork that renders 1.7 million BTC permanently unusable.
He also noted that institutions such as BlackRock and Strategy have accumulated large Bitcoin positions in recent years. These holders, along with a possible U.S. government strategic reserve, will likely pressure developers to act regardless of community ideology. “They are your boss now,” Hoskinson said. “They will force you to do it, and they will steal all of Satoshi's coins.” He added: “I'm so sorry, Satoshi. You're about to lose all your money. They will use the quantum computer threat as a cover. Your alternative is to do nothing and let the pirates take the gold, and you'll have to tolerate 30% of the supply being dumped on the open market.”
Hoskinson concluded by urging Bitcoin developers to pursue a full hard fork if necessary, and to use it as an opportunity to modernize the protocol and attract new technical leadership. “If you're going to do a hard fork, do it right,” he said. He acknowledged having no authority in the Bitcoin ecosystem but emphasized he has been warning about this for over a decade. Meanwhile, Cardano, Ethereum, and Solana are already working on post-quantum solutions with their own governance timelines.