A Post Quantum Migration Proposal

The discussion revolves around a proactive approach to mitigate the potential threat posed by quantum computing to Bitcoin's security. It introduces a phased strategy aimed at transitioning Bitcoin to quantum-resistant technologies without necessitating hard forks, thereby preserving network integrity and user assets. The proposal outlines three phases: Phase A, Phase B, and an optional Phase C, each designed to incrementally secure Bitcoin against quantum vulnerabilities while providing clear incentives for stakeholders to upgrade their systems and practices.

Phase A targets the immediate cessation of funds being sent to quantum-vulnerable addresses, promoting the adoption of post-quantum (PQ) output types, specifically P2QRH as described in BIP-360. This phase aims to hasten the transition away from susceptible cryptographic signatures, thus reducing the overall risk exposure as early as possible. Following this, Phase B enforces a more stringent rule set whereby spending from quantum-vulnerable UTXOs (Unspent Transaction Outputs) becomes invalid. This is implemented via a well-publicized flag day, occurring approximately five years post-activation, which signifies a critical juncture where the network collectively shifts towards embracing quantum-resistant mechanisms.

An optional Phase C is contemplated to address the recovery of legacy UTXOs through Zero-Knowledge (ZK) proofs, particularly for users who possess a Hierarchical Deterministic (HD) wallet seed phrase but failed to migrate their funds before the enforcement of Phase B. This phase is contingent upon further research, demand, and consensus within the community, acknowledging that it represents a significant technical challenge and departure from current practices.

The rationale behind this phased approach underscores the urgency of defending Bitcoin against quantum attacks, which pose an unprecedented existential threat to its cryptographic foundations. By disincentivizing the use of quantum-vulnerable addresses and encouraging the migration to quantum-resistant alternatives, the proposal seeks to minimize both the attack surface and the potential loss of access to funds. It acknowledges the inertia inherent in upgrading distributed systems and advocates for a clear, time-boxed pathway to ensure collective action.

Highlighting the benefits, this strategy promises enhanced resilience of the Bitcoin protocol, certainty for users and stakeholders through a publicized timeline, and discipline in the supply of bitcoin by rendering abandoned keys unspendable. Furthermore, it aligns with Satoshi Nakamoto's perspective on lost coins, suggesting that quantum-recovered coins would devalue the currency for all users, contrasting with the view that lost coins increase the value for existing holders.

The proposal envisages various stakeholder incentives for upgrading, including increased demand for block space and fees for miners, fulfillment of fiduciary duties for institutional holders, mitigation of concentrated risk for exchanges and custodians, and improved security for everyday users. Attackers, conversely, face diminishing economic incentives as the sunset date approaches, with stolen coins becoming unspendable post-Q-day.

In conclusion, this comprehensive plan articulates a forward-looking stance on Bitcoin's quantum readiness, emphasizing the need for timely upgrades and the adoption of quantum-resistant technologies. It serves as a call to action for the Bitcoin community to proactively address the looming threat of quantum computing, ensuring the long-term security and viability of the network and its underlying assets.