That of Satoshi Nakamoto Bitcoin holdings are at risk of being stolen as the quantum threat becomes increasingly possible. Notably, BTC developer Hunter Beast proposed the Hourglass V2 proposal amid debates over how best to manage the Satoshi supply, in order to mitigate the impact of the selling pressure Bitcoin could face if these coins were stolen.
BTC Dev Provides Solution on How to Manage Satoshi Nakamoto’s Bitcoin Holdings
Beast proposed version 2 of the Hourglass proposalwhich aims to reduce the Pay-to-Public-Key (P2PK) output that can be included in transaction inputs to 1 BTC per block. It should be noted that Satoshi Nakamoto’s Bitcoin stash of approximately 1.1 million BTC is a P2PK address, which exposes the public key and makes it more vulnerable to attacks. quantum attacks.
A Channel Analysis Report revealed that approximately $718 billion in Bitcoin is held in addresses vulnerable to quantum attacks, including these P2PK addresses. As such, Bitcoin could face a unprecedented supply shock if these coins are stolen by quantum attackers.
Beast’s Hourglass proposition aims to minimize selling pressure to the bare minimum while also providing a trade-off on whether to freeze or burn. Satoshi Nakamoto’s plays to prevent them from falling into the wrong hands. The Hourglass v2 proposal also noted that burning or freezing these coins can be considered confiscatory, which could set a dangerous precedent for changing Bitcoin’s monetary policy in the future.
If enabled, the Hourglass V2 proposal will ensure that only one P2PK output can be included as a transaction input per block. Additionally, no P2PK output to an address that is not currently spent can be created. Finally, no P2PK output can be created from other output types.
In the meantime, it should be noted that this proposal only applies to P2PK addresses and other outcomes vulnerable to quantum threats remain at risk. Indeed, imposing similar restrictions on other types of output may limit the transition to quantum-resistant Bitcoin addresses. These other output types are still commonly used, unlike Satoshi Nakamoto’s P2PK address, which makes it easier to remove.
Rationale for the proposal
The Hourglass V2 proposal will limit P2PK production to approximately 144 BTC per day. Beast noted that this should effectively mitigate the market impacts of quantum attacks on P2PK coins since these quantum attackers will not be able to empty all Bitcoins at the same time.
Without these restrictions, more than 6,000 P2PK Transactions could be executed in each block, releasing over 300,000 BTC per block into the market. At such a rate, all P2PK coins, including those of Satoshi Nakamoto, could be spent in just a few hours.
However, under Hourglass V2 rules, it would take over 32 years to move all P2PK coins, significantly reducing quantum market risks. One positive is that original keyholders, such as Satoshi Nakamoto, should remain able to move their coins even after the proposal is activated, as long as no quantum players are currently competing for P2PK transactions.
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