Quantum Recovery Of Hashed Address Secured Coins With No Confiscatory Risk

The current debate in the Bitcoin Development Mailing List highlights significant concerns regarding the effectiveness and scope of rescue protocols for UTXOs after Quantum Day. The primary point of contention revolves around the claim that layering various Knowledge Asymmetries (KAs) could potentially cover all key generation methods across different address types, ensuring comprehensive coverage. However, this assertion has been challenged by highlighting that not all coins, especially those like Satoshi's or those from reused paper wallets, have KAs due to their specific methods of address generation and previous usage. This indicates that complete coverage is not feasible as some coins inherently lack the necessary KA for recovery.

Moreover, it was argued that focusing predominantly on hashed addresses, as suggested in the original proposal, overlooks the capabilities of P2TR coins, which can indeed be rescued owing to their associated KAs. This demonstrates a misconception in the initial claim about the impossibility of covering non-hashed address types and underscores the necessity of including P2TR coins in any comprehensive rescue protocol. Furthermore, the discussion delves into the technicalities of how exposure of an EC public key before the activation height of a rescue protocol might prevent the use of certain KAs but leaves other forms such as BIP32 derivation fully functional for rescuing purposes.

An additional layer of complexity is introduced with the potential risks associated with sharing xpubs. It's noted that revealing an xpub could enable a CRQC (Cryptographically Relevant Quantum Computer) to forge hashed-address KA proofs, thereby facilitating theft. This raises ethical concerns about whether or not hashed address KAs should be allowed if they potentially increase the risk of coin theft through xpub exposure.

The discourse also critiques the general understanding within the community, emphasizing the need to focus more on the nature of knowledge asymmetries and their hard relationships rather than solely on the proving mechanisms like ZKPs or commit/reveal systems. This is crucial because while many KAs can be authenticated by these proving systems, the decision of which KAs should be permissible for rescue operations and which authentication system to use should be treated as separate discussions.

Overall, the conversation reflects a deep dive into the technical and ethical considerations essential for developing effective and secure cryptocurrency rescue protocols post-Quantum Day. It calls for a balanced approach that considers both the technical feasibility and the broader implications of enabling certain rescue pathways, thereby promoting an informed discussion aimed at refining these critical security measures.