Dragonfly managing partner Haseeb Qureshi pushed back against Ethereum researcher Justin Drake’s proposed "Bunker Mode," arguing that moving funds to fresh addresses would not solve the core problem if AI were to break current cryptographic signature systems. In his view, even assets that are successfully moved could still suffer a sharp loss in value if large amounts of coins in other exposed addresses were stolen and dumped on the market.
Qureshi instead proposed that blockchain networks adopt a "cryptographic recovery mode." Under that approach, users would pre-bind a hash-based backup signature scheme to their addresses, allowing validators to trigger a forced recovery process if existing signature methods were compromised.
The debate comes with fresh data from Glassnode. The analytics firm said about 6.26 million BTC, more than 31% of Bitcoin’s total supply, sits in addresses exposed to public-key risk. Roughly 4.33 million BTC is tied to address reuse and could be protected by moving to new addresses, while another 1.94 million BTC faces risk because of address format. Exchange-related exposure is close to 1.8 million BTC, or about 57% of exchange BTC balances. Drake has warned that AI could speed up attacks on ECDSA, with the worst-case timeline shrinking to months rather than years. Vitalik Buterin has also said the risk deserves serious attention, while cautioning against rushed asset transfers.
Dragonfly managing partner Haseeb Qureshi criticized Ethereum researcher Justin Drake’s proposed "Bunker Mode," calling it a form of "cryptographic doomerism," according to BlockBeats on Oct. 9. Qureshi said that if AI breaks existing cryptographic signature systems, simply moving assets to new addresses would not fix the underlying problem.
He argued that if assets in other addresses were stolen at scale and then sold off, even funds that had been moved to safer addresses could still see their value hit hard.
Qureshi proposes a recovery model
Qureshi said blockchain networks should build a "cryptographic recovery mode." In his proposal, users would pre-bind a hash-based backup signature scheme to their addresses. If current cryptographic signatures were broken, validators could then force the activation of an asset recovery mechanism.
Glassnode data points to broad BTC exposure
Glassnode data shows that about 6.26 million BTC is held in addresses exposed to public-key risk, representing more than 31% of Bitcoin’s total supply.
- About 4.33 million BTC is exposed because of address reuse, a risk that can be removed by moving funds to new addresses.
- Another 1.94 million BTC faces risk because of address format.
- Exchange-related exposure is close to 1.8 million BTC, equal to about 57% of exchange BTC balances.
Background to the debate
Earlier, Justin Drake warned that AI could accelerate efforts to break the Elliptic Curve Digital Signature Algorithm, or ECDSA, used by crypto wallets. In the worst case, he said the risk could emerge within months rather than years.
Ethereum co-founder Vitalik Buterin has also said the industry should take seriously the risks created by AI-accelerated mathematical research, but he does not recommend that users rush to move their assets.
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