The game-theory problems of PQ sunsetting modes

One scenario, known as the "tripwire" scenario, proposes embedding a NUMS puzzle within a honeypot UTXO that contains Bitcoin rewards. This mechanism is designed to freeze all legacy coins when solved by a quantum computing entity. However, this raises an important question: why would a rational quantum computing entity expose its capabilities by solving a publicly visible puzzle, thus forfeiting the opportunity for covert operations like transferring legacy coins to a secure wallet?

Another complex scenario involves potential collusion between a 51% majority of miners and a quantum computing entity to block the inclusion of post-quantum proofs on the blockchain. This collusion could potentially facilitate the extraction of legacy P2Pk coins, currently estimated to be worth $215 billion, providing a substantial economic incentive for miners. In situations where two quantum entities with similar capabilities compete, miners might choose to align with the entity offering higher reorganization fees, prompting a shift towards more overt actions rather than covert extractions.

Furthermore, strategies such as those proposed in BIP361, which suggest a flag-day activation to sunset certain measures, do not necessarily prevent the risk of deep chain reorganizations before activation. These strategies underline increased coordination costs and highlight information asymmetries about the timing of quantum breakthroughs, giving quantum entities potential leverage to exploit these gaps.

The removal of checkpoints from Bitcoin software and the heavy reliance on miner consensus increase the vulnerability of the network to attacks by quantum-capable entities, especially targeting legacy coins that have not been upgraded to quantum-resistant formats. The potential for the blockchain to rollback to pre-migration states poses a severe threat to the integrity of both legacy and upgraded coins. This analysis underscores the necessity for ongoing research and development to address the challenges posed by quantum computing to the Bitcoin network. This includes reevaluating current security assumptions and exploring new defensive mechanisms to maintain blockchain finality and integrity in a post-quantum world.

In a separate but related discussion, the possibility of implementing a PQ sunset fork appears fraught with difficulties, particularly if not managed properly in terms of incentivizing the stakeholders. Such a move could lead to significant cooperative action among miners to cease mining the authentic chain and instead focus on a revisionist chain—a strategy that may only be viable for larger miners due to the immense capital expenditure required. This approach also risks massive double-spend attacks and could lead to significant dissatisfaction among exchanges, potentially resulting in miners being ostracized from these platforms. For shallow reorganizations, these concerns remain pertinent and seriously challenge the viability of any tripwire attempts. The optimal solution could involve deploying an EC disabling fork before such incentives become too enticing, thereby preventing these complex scenarios from unfolding.