Hourglass V2 Update

Bitcoin operates on a set of rules upheld by its users, who possess the authority to spend Unspent Transaction Outputs (UTXOs). This system is designed in such a way that if a significant portion of the network's economic power decides to protect itself from large-scale liquidations by malicious entities—those who may not have legitimate claims to UTXOs—the motivation exists for these users to take preventive measures. This dynamic underscores the community-driven nature of Bitcoin's security and governance mechanisms, emphasizing the importance of consensus and collective action in safeguarding the network's integrity.

The Hourglass V2 proposal has been highlighted as a superior solution compared to its predecessor, Hourglass V1, with one notable criticism being the arbitrary assignment of 1 BTC per block reward. An analysis based on actual on-chain statistics regarding the spending volume of P2PK UTXO in recent years would provide a more empirical basis for determining appropriate block rewards. Such data-driven approaches enrich the discussion around protocol improvements and ensure that modifications are grounded in real-world usage patterns.

Furthermore, the concept of integrating a Zero-Knowledge (ZK) quantum-safe spending option as part of a broader Bitcoin Improvement Proposal (BIP) presents an innovative approach to enhancing Bitcoin's security in the face of potential quantum computing threats. This proposal specifically addresses the issue of migrating UTXOs to quantum-resistant scripts before a predetermined deadline. It acknowledges the challenges faced by owners of old P2PK outputs, who, due to the nature of their wallets, cannot produce a ZK proof of ownership. This consideration highlights the ongoing efforts within the Bitcoin development community to anticipate and mitigate emerging security threats, ensuring the long-term resilience of the network.