New Proposal Aims to Protect Bitcoin Wallets From Future Quantum Attacks

Bitcoin’s Quantum Threat Solution? Paradigm Proposes Private “PACTs” Recovery System

A new proposal from Paradigm general partner Dan Robinson is gaining attention across the crypto space, offering a novel approach to one of Bitcoin’s most debated long-term risks: quantum computing.

The system, called Provable Address-Control Timestamps (PACTs), would allow Bitcoin holders to privately prove ownership of their wallets today—without any on-chain activity—and use that proof in the future to reclaim funds if quantum-vulnerable addresses are ever frozen.

The proposal is particularly significant for dormant wallets, including those believed to belong to Satoshi Nakamoto, which currently have no viable recovery path under existing upgrade proposals.

Why Quantum Computing Poses a Real Threat to Bitcoin

Bitcoin’s security relies on cryptographic systems that could eventually be broken by a new class of machines known as cryptographically relevant quantum computers (CRQCs).

If such machines become powerful enough, they could:

• Derive private keys from exposed public keys
• Gain control over vulnerable Bitcoin addresses
• Potentially access billions in dormant funds

This risk is not theoretical in the long term. Paradigm estimates that hundreds of billions of dollars in BTC are currently stored in addresses with exposed public keys.

Among them are wallets attributed to Satoshi Nakamoto, holding approximately 1.1 million BTC, valued at over $75 billion.

The Controversy Around BIP-361

In April 2026, developer Jameson Lopp and collaborators introduced BIP-361, proposing a five-year transition to phase out quantum-vulnerable addresses.

Under this plan:

• Users must migrate funds to quantum-safe addresses
• Any unmigrated coins would be permanently frozen

While this approach enhances network security, it introduces serious concerns:

• Privacy loss: Moving funds reveals wallet activity and linkages
• Identity risk: Dormant wallets could expose their owners
• No solution for older wallets: Pre-2012 addresses (non-BIP-32) cannot use existing recovery methods

For Satoshi-linked wallets, forced movement would confirm whether the creator is still active—an outcome many consider unacceptable.

How PACTs Work: A Two-Step Private System

Step 1: Private Commitment (Today)

PACTs allow users to create a private proof of wallet ownership without broadcasting any transaction.

The process includes:

• Generating a 256-bit secret salt
• Signing a message using BIP-322 (proof of address control)
• Combining both into a commitment hash
• Timestamping the hash using OpenTimestamps

This timestamp is anchored to the Bitcoin blockchain via a Merkle tree, but:

• No wallet address is revealed
• No balance is exposed
• No transaction is recorded

The entire process is free, private, and off-chain.

Step 2: Future Recovery (If Needed)

If Bitcoin later introduces a soft fork that freezes vulnerable addresses, PACT holders could recover their funds using a quantum-resistant proof.

This involves submitting a STARK proof, demonstrating:

• Knowledge of the original salt and ownership proof
• That the commitment existed before a defined cutoff date
• That the claim is tied to a specific transaction

Crucially, this process:

• Does not reveal private data
• Does not expose wallet identity
• Maintains full user privacy

What Makes STARK Proofs Important?

STARKs (Scalable Transparent Arguments of Knowledge) are a type of zero-knowledge proof that allows verification without revealing underlying data.

Unlike traditional cryptographic systems, STARKs:

• Do not rely on elliptic curve cryptography
• Are resistant to quantum attacks
• Provide scalable and transparent verification

However, integrating STARK verification into Bitcoin would require a major protocol upgrade via soft fork.

Why PACTs Matter for Satoshi-Era Wallets

One of the biggest gaps in current proposals is the lack of recovery options for pre-BIP-32 wallets, which include many early Bitcoin addresses.

PACTs directly address this issue by:

• Providing a private recovery path
• Avoiding forced on-chain movement
• Preserving anonymity for early adopters

For wallets linked to Satoshi Nakamoto, PACTs represent the only proposed solution that does not compromise identity or privacy.

Limitations and Risks of the Proposal

Despite its promise, Robinson acknowledges that PACTs are not without challenges:

• No guarantee of adoption: Bitcoin may never implement a quantum “sunset”
• Dependency on future upgrades: Requires STARK integration
• Limited compatibility: Not yet suited for multisig or custodial wallets
• User responsibility: Losing the salt or proof means losing recovery access

Additionally, the proposal remains conceptual and requires extensive review from cryptographers and Bitcoin developers.

How PACTs Fit Into the Broader Bitcoin Debate

PACTs are not designed to replace BIP-361, but rather to complement it by filling a critical gap.

The broader discussion now centers on:

• Feasibility of integrating zero-knowledge proofs into Bitcoin
• Balancing security with privacy
• Setting realistic timelines for quantum risk mitigation

Early reactions from developers and researchers have focused on the complexity of implementation and the long-term viability of the approach.

Conclusion: A Forward-Looking Safety Net for Bitcoin Holders

Paradigm’s PACTs proposal introduces a compelling new approach to quantum risk—one that prioritizes privacy, flexibility, and forward compatibility.

By allowing users to prove ownership today without revealing anything publicly, PACTs create a potential safety net for the future, should quantum threats become reality.

While the system is still in its early stages and faces significant technical hurdles, it represents an important خطوة in Bitcoin’s ongoing evolution.

For now, PACTs stand as a powerful idea: a way to prepare for a future threat—without compromising the principles that define Bitcoin today.

Georgi Shopov publication: "New Proposal Aims to Protect Bitcoin Wallets From Future Quantum Attacks" was written for 24crypto.news

---

News from today

---

Related news

Sonic Unveils Post-Quantum Security Roadmap to Future-Proof Blockchain Infrastructure

Yen vs. Bitcoin: How Daido Ltd (TYO: 7537) is Using ‘Digital Gold’ to Protect its Industrial Legacy

Google’s 2029 Deadline: Why $468B in Bitcoin is Suddenly ‘Quantum-Vulnerable’

ARK Invest Warns Quantum Computing Puts $483B in Bitcoin at Risk: Is BIP-360 the Solution?

More news with author: Georgi Shopov