Changes to BIP-360 - Pay to Quantum Resistant Hash (P2QRH)

The proposal by Ethan Heilman addresses a significant issue in the realm of cryptocurrency inheritance, particularly focusing on the P2QRH problem where it is assumed that the original owner possesses the seed necessary for access. This assumption proves problematic when considering scenarios where an heir only has access to a paper containing crucial information. Thus, a solution is proposed to ensure security and practicality in passing down digital assets.

The core of the proposal involves the creation of a PQ-Seed, which is generated with 90 bytes of entropy. This seed can be expanded using SHAKE256 to accommodate any post-quantum (PQ) private key. To secure this seed, a combination of salts and encryption methods including XChaCha20 and Argon2id are employed, resulting in a string of 104 characters encoded in Base58. This string is small enough to fit into a single QR code, thus simplifying the physical inheritance process.

For the heir to access the inherited assets, they would simply need the password associated with the QR code. Using this password, they can decrypt the PQ-Seed from the QR, reconstruct the private key, and thereafter gain control over the assets, specifically referenced here as spending from a bc1r address. This method notably avoids the need for multiple QR codes for different PQ algorithms and eliminates public key exposure until the actual transaction occurs. Furthermore, it does not require changes to existing consensus protocols.

This approach mirrors the principles of BIP-38 but is tailored for the P2QRH context, utilizing a compact 90-byte seed that can be effectively expanded and securely stored in QR form. There's an ongoing discussion about whether these measures should be incorporated into BIP-360 under Wallet Considerations, aiming to standardize the practice for broader adoption and implementation.