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

The discussion revolves around the potential impact of breakthroughs in cryptographic cracking on Bitcoin, particularly concerning elliptic curve (EC) cryptography vulnerabilities. If a significant advancement were made in algorithms capable of breaking EC or in quantum computing, it would pose a serious threat to the security and value of Bitcoin. Two main scenarios are considered based on the time required for an attacker to exploit these vulnerabilities.

In the first scenario, a highly resourced attacker can compromise an EC public key after a week of computation, with this attack duration halving every two months. This situation leads to immediate and severe implications for Bitcoin transactions and storage. Users holding P2TR coins are advised to move their assets to P2SH addresses as a protective measure since P2SH is not susceptible to tapscript-based vulnerabilities. However, this transition poses challenges, such as the temporary shutdown of the Lightning Network (LN) and the necessity for exchanges that have adopted P2TR to revert to P2SH, causing transaction fees to surge due to the rush in moving coins away from vulnerable outputs. A soft fork might be proposed to mitigate these issues by disabling certain types of outputs and key spends, but its success is uncertain. If unsuccessful, a hardfork could be considered to freeze vulnerable outputs, potentially creating a version of Bitcoin with both enhanced security and scarcity compared to the original chain. Enhanced security measures like P2QRH and PQ signature opcodes could alleviate some risks by providing stronger protection against long-exposure attacks, potentially maintaining value and functionality in the affected areas of the Bitcoin ecosystem.

The second scenario presents a more dire situation where an attacker can break an EC public key in just one second. In this extreme case, P2QRH alone offers minimal protection, but when combined with PQ signature opcodes, it can significantly safeguard coin ownership by enabling authentication even after EC is compromised. The implementation of a freeze through either a soft or hard fork appears as a necessary action to preserve Bitcoin's integrity under these conditions. Despite the effectiveness of P2QRH and PQ signatures in mitigating risks, the adoption of these technologies may be hindered by concerns over increased transaction fees and the reluctance of wallets and exchanges to support a PQ-only output due to its cost implications.

Overall, the exploration of these scenarios underscores the need for proactive measures and adaptations within the Bitcoin protocol to address potential cryptographic vulnerabilities. Implementing advanced security features like P2QRH and PQ signature opcodes, coupled with strategic decisions on hard or soft forks, could play a crucial role in protecting Bitcoin against the threats posed by advancements in cracking algorithms or quantum computing technology.