BIP-361 Proposal Aims to Enhance Bitcoin Security Against Quantum Threats

In a significant development, a group of six contributors, including Casa’s co-founder Jameson Lopp, has introduced BIP-361, a proposal aiming to phase out outdated ECDSA and Schnorr signatures from Bitcoin’s architecture. This initiative comes as a response to the growing concerns regarding quantum computing’s potential to undermine Bitcoin’s security framework.

Entitled “Post Quantum Migration and Legacy Signature Sunset,” the draft outlines a detailed three-phase strategy designed to incentivize Bitcoin holders to transition to more secure practices. The initial phase focuses on the critical need for a secure upgrade as quantum computing advances, ensuring that users remain protected against emerging threats.

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BIP-361 builds upon the earlier BIP-360, which introduced the Pay-to-Merkle-Root (P2MR) format, identified as a quantum-resistant output type. This proposal tackles a notable vulnerability in Bitcoin’s security, highlighted by estimates indicating that over 34% of Bitcoin is currently held in addresses susceptible to quantum risks. These include addresses with public keys already visible on-chain, which could be compromised by a sufficiently powerful quantum computer.

Among the exposed addresses are those tied to the original creator of Bitcoin, Satoshi Nakamoto, with approximately one million BTC at risk. The issue is compounded by the difficulty in detecting quantum-enabled attacks, with potential attackers able to conceal their activities until after they execute their plans.

The authors express that it is nearly impossible to discern an attacker’s motives prior to an actual quantum strike. They suggest that economically driven attackers would likely strive to remain undetected, while malicious entities might aim to decimate the network’s value.

Recent studies, such as a 2026 publication from Google Quantum AI, indicate that breaking elliptic curve cryptography might require significantly fewer operations than previously believed. Furthermore, research from Caltech and Oratomic suggests that Shor’s algorithm could soon be feasible at a scale that poses a credible threat to current cryptographic standards.

The BIP-361 proposal delineates its transition into three distinct phases. The first stage, known as Phase A, would commence approximately three years after activation, preventing transactions to any addresses vulnerable to quantum threats. This phase encourages users to adopt post-quantum secure address formats.

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Following Phase A, Phase B would initiate about two years later, at which point transactions using ECDSA and Schnorr signatures would be outright rejected by network nodes, thereby rendering any funds tied to these signatures inaccessible.

A possible Phase C is also outlined, which could enable users to retrieve their frozen funds through a zero-knowledge proof linked to their BIP-39 seed phrase. However, this stage lacks a concrete timeline and requires further exploration and consensus from the community.

BIP-361 portrays its approach as not just a necessity but a private incentive for Bitcoin holders to act decisively. The authors underscore that failure to upgrade would lead to increased difficulty in accessing funds, introducing a new level of certainty where uncertainty once existed.

In the context of the broader Bitcoin ecosystem, the initiative also references a principle articulated by Satoshi Nakamoto, suggesting that lost coins indirectly enhance the value of remaining assets. This rationale extends to their argument that funds lost due to quantum threats could diminish the overall stability of the network, making a robust response essential for future security.