Castle Island Ventures co-founder Nick Carter has laid out what he sees as three plausible paths for Bitcoin as the industry moves toward post-quantum cryptography: freeze vulnerable early coins, leave them untouched and accept the consequences, or pursue a legal “rescue” that avoids protocol-level confiscation.
The debate is important because, in Carter’s framework, Nearly 1.7 million BTC are in legacy public key payment outputs It could become exposed if Bitcoin eventually undoes its elliptic curve signatures and a cryptographically relevant quantum computer arrives.
The third option in the Bitcoin battle is Satoshi
In a mail In X, Carter said the Overton window on quantum risk has changed rapidly. What was recently treated as a fringe concern, he wrote, is now increasingly discussed as an engineering and ultimately governance issue for Bitcoin itself. “The thing about the PQ transition is that it is impossible as a Bitcoin user to claim that this protocol is cutting-edge technology if Bitcoin, an entirely crypto-based monetary system, is lagging behind,” he wrote, adding that betting on the fate of the network in the hope that the technology will not advance would be reckless and embarrassing.
From there, Carter charted the promotion path he envisioned. After the soft fork, Bitcoin will likely move through an intermediate phase where users can sign using ECC-based schemes or using new post-quantum signatures. Eventually, legacy signatures like ECDSA and Schnorr will be scrapped altogether, he wrote. This transformation, in his telling, is the easy part. The harder question comes later: What to do with coins that never migrate?
He framed this conflict as a struggle between two camps that was already taking shape. On the one hand there are institutions, custodians, exchanges and fiduciaries that may view freezing non-migratory currencies as the only acceptable option. Carter’s argument is that these actors cannot afford the risk that dormant holdings, including Satoshi coins, could suddenly be retrieved by a hostile party with quantum capabilities and dumped on the market or otherwise used to destabilize Bitcoin.
On the other side are hard-line Bitcoiners and ideological fundamentalists who see any such freeze as a fundamental violation of the system’s monetary and political principles. Carter described their position in stark terms: “Satoshi set 21 million as a monetary transaction, and no living person has the authority to arbitrarily adjust that to 19.x million. Bitcoin does not engage in selective ‘irregular state changes’ as Ethereum did after the DAO hack in 2016. Even after losing 850,000 BTC to Mt Gox, nothing was done at the protocol level to recover the funds.”
Carter said he believes the freeze camp is more likely to win than many Bitcoin users assume, largely because the market structure has changed since… Wars of 2015-2017. In his view, Bitcoin today is much more concentrated in institutional entities, ETF issuers, custodians, and large asset managers, giving “economic nodes” much greater influence than they did a decade ago. He also noted that some influential tech figures have already taken the side of freezing vulnerable coins if a real threat arises.
However, the outcome Carter prefers is neither a freeze nor a lack of intervention. The third “secret thing” for him is the legal rescue framework. Under this scenario, the United States Quantum leader like GoogleIBM or another local company will build the first crypto-related quantum computer and, under the court’s authority, will restore the vulnerable coins to trust-like structures rather than taking ownership outright.
“It’s going to go like this,” Carter wrote. “An American company, whether it’s Google, IBM, or one of the other leading quantum companies… gets the CRQC first, contracts with… United States Government To legally redeem 1.7 million p2pk coins. They do not take ownership of these coins, but rather are appointed by the court as a neutral receiver or court-authorized receiver, charged with securing the assets, returning them to their rightful owners where possible, and holding them in trust pending judicial disposition.
In Carter’s order, legal rescue is the best outcome, freezing is the second best outcome, and non-freezing outcomes rank far behind. “If Bitcoin truly freezes currencies, then something about Bitcoin will truly die,” he wrote. “He will remain, but he will be changed forever.”
At press time, Bitcoin was trading at $74,795.
Featured image created with DALL.E, a chart from TradingView.com
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