PQC output type discussion

Address reuse in cryptocurrency transactions is a nuanced issue that hinges significantly on human behavior rather than software limitations. The tendency for users to reuse addresses can potentially expose funds to security risks, particularly if the address has been previously used for sending funds, thereby revealing the public key associated with it. However, this does not inherently compromise long-term holding addresses where no funds have been spent.

The discourse around the security of various address types, such as P2TR and P2TRv2, reveals deeper complexities, especially from a post-quantum cryptography (PQ) perspective. Compared to P2WPKH and other hashed-key address types, P2TR versions appear less secure unless elliptic curve cryptography (ECC) spending is disabled. Given these concerns, the suggestion to transition funds to P2MR instead of P2TRv2 emerges from an informed stance on potential threats like composite residuosity quantum computers (CRQC).

The practical adoption of new cryptographic solutions like P2TR is hindered by slow integration from wallets and exchanges, which affects both payment processing and fund-holding capabilities. Despite the potential benefits, such as approximately 20% savings on consolidation transactions, the widespread reliance on older address formats like legacy P2SH-segwit persists due to slow adaptation rates. Furthermore, P2TR faces criticism for its higher transaction costs compared to other methods and its reduced anonymity set, positioning it as a less favorable option unless specific features like tapscript are required. This situation underscores the challenges in evolving cryptocurrency technology and user practices in sync.