Nearly 5 million dormant Bitcoin worth roughly $400 billion could be shielded from quantum computing attacks through a proposed soft fork that would freeze vulnerable wallets, according to privacy-focused blockchain startup AmericanFortress. The company unveiled a patent-pending post-quantum signature scheme on Wednesday following an $8 million seed funding round.
The proposal targets a problem the crypto industry has discussed abstractly for years but never solved concretely: what happens to coins that cannot be moved because their owners are dead, lost their keys, or (in Satoshi Nakamoto’s case) simply vanished? Those wallets cannot upgrade themselves to quantum-resistant cryptography. Without intervention, they become low-hanging fruit once quantum hardware crosses a critical threshold.
The $600 Billion Exposure Problem
Quantum computers pose a specific, technical threat to cryptocurrency that gets lost in the hype. They cannot crack master seed phrases, the 12 or 24-word recovery keys that generate wallet addresses. What they can do, once powerful enough, is reverse-engineer individual private keys from public keys that have already been exposed on-chain.
Every time you send Bitcoin from an address, you broadcast that address’s public key to the network. Before your first outgoing transaction, only the address (a hash of the public key) is visible, which provides some protection. After that first spend, the public key sits in the blockchain forever, waiting.
AmericanFortress CEO Michal Pospieszalski told CoinDesk that over $600 billion in crypto assets currently sit in this exposed state. That figure includes Satoshi’s estimated 1.1 million BTC stash, nearly 5 million additional dormant coins, and (somewhat alarmingly) 100% of Solana addresses. Pospieszalski described this Solana exposure as “common knowledge,” a function of how that chain’s account model works rather than user behavior.
The threat isn’t evenly distributed across all crypto holders. Active users who regularly rotate addresses or use modern hierarchical deterministic (HD) wallets face less immediate risk. The danger concentrates in dormant accounts, addresses that received coins years ago and never moved them, often because the owner cannot.
If you’re holding Bitcoin you bought in 2024 in a modern wallet and you’ve never spent from it, you’re in relatively good shape. If you’re one of the estimated 3.7 million lost-coin addresses from the early Satoshi era, your public key is already out there, and you’re not coming back to upgrade anything.
How the Freeze Mechanism Would Work
AmericanFortress’s approach sidesteps the impossible migration problem by not requiring migration at all, at least not immediately. Instead, the protocol would execute what Pospieszalski calls a “defensive freeze” through a backward-compatible soft fork.
Here’s the logic: rather than asking dormant wallet owners to prove they still control their keys (they can’t, by definition), the network would preemptively mark certain address categories as frozen. Transactions attempting to spend from those addresses would be rejected until the quantum threat passes or until governance decides what to do with the funds.
The proposal specifically targets pre-BIP32 addresses. BIP32 (Bitcoin Improvement Proposal 32) introduced hierarchical deterministic wallets in 2012, allowing users to derive multiple addresses from a single master seed. Addresses created before this standard, including all of Satoshi’s known wallets, use raw public-private key pairs with no seed phrase derivation. They cannot automatically upgrade like newer wallets can.
“Our quantum-resistant protocol would automatically freeze and protect those funds until governance decides what to do with them after Q-day,” Pospieszalski explained, using the industry shorthand for the day quantum computers become capable of breaking current cryptographic standards.
This raises an obvious question: who decides what happens to hundreds of billions in frozen coins? Pospieszalski acknowledged the community would eventually have to vote on whether to move, burn, or redistribute the assets. The protocol doesn’t resolve that political problem; it just prevents the coins from being swept up by quantum-equipped attackers before the decision can be made.
The proposal echoes themes from Paradigm’s PACT system, which researcher Dan Robinson proposed earlier this year as a way for dormant wallet owners (including, theoretically, Satoshi) to prove ownership without moving coins. Both approaches grapple with the same fundamental tension: protecting assets whose owners may never return while respecting the property rights of those who might.
Technical Architecture and Performance Claims
The AmericanFortress protocol deploys three distinct solutions layered on top of each other. Pre-BIP32 raw key protection handles the oldest and most vulnerable addresses through the freeze mechanism. Standard BIP32 quantum protection covers modern HD wallets. A high-speed “QBIP32” derivation scheme provides the actual cryptographic upgrade path.
The approach uses zero-knowledge proofs to verify master seed ownership at the point of spend. When you want to move funds, you prove you control the seed that generated the address without revealing the seed itself. This is computationally heavier than current signature verification, but AmericanFortress claims it integrates with existing elliptic curve cryptography without performance degradation.
“It’s just a node and wallet software update in that order,” Pospieszalski said, framing the implementation as relatively straightforward. For active users, migrating to quantum-proof status allegedly takes about 50 milliseconds via a wallet prompt. Dormant seed-derived wallets can be protected programmatically at the base layer.
The performance claim deserves scrutiny. Just this week, a quantum-security test on BNB Chain successfully implemented post-quantum signatures but slowed transaction throughput by 40%. If quantum protection comes with a 40% speed penalty, adoption becomes a much harder sell.
AmericanFortress says its approach avoids that tradeoff because it doesn’t require entirely new cryptographic primitives for routine transactions. The ZK proof overhead only kicks in at spend time, and the firm claims the cost equals roughly one rollup transaction rather than multiplying across every historical transaction.
The $8 million seed round was co-led by SAVA Digital Asset Fund, Moon Pursuit Capital, and 0G Labs. Along with the funding announcement, the company released a cryptographic paper identifying the network performance bottlenecks that have plagued other post-quantum implementations. The paper itself wasn’t linked in the announcement, so independent verification of the technical claims remains pending.
Cross-Chain Ambitions and Licensing Model
Pospieszalski positioned the protocol as applicable beyond Bitcoin. “This means integrity for Bitcoin going forward, and that’s just BTC. It applies to all other major chains as well, like Ethereum, Solana, and Tron.”
The cross-chain claim makes sense architecturally. Most proof-of-stake and proof-of-work chains use similar elliptic curve cryptography (ECDSA or EdDSA variants), which means they share the same quantum vulnerability. A ZK-based ownership proof that works on Bitcoin could theoretically port to other chains with appropriate modifications.
AmericanFortress is actively licensing its SDK to Layer 1 and Layer 2 blockchains, Pospieszalski revealed, in exchange for marketing positioning. The firm is also open to exclusive acquisitions, suggesting the technology might end up absorbed by a larger player rather than deployed independently.
The licensing model prompts skepticism about adoption incentives. If a chain has to pay or grant marketing concessions to implement quantum protection, the upgrade path becomes a business negotiation rather than a pure security improvement. Bitcoin’s governance, famously decentralized and slow to change, may not respond well to a for-profit entity pushing a protocol modification.
That said, the alternative, doing nothing and hoping quantum computers stay weak forever, carries its own risks. The crypto industry has been tracking quantum threats with increasing urgency as hardware advances accelerate. Google, IBM, and several national labs have all announced quantum computing milestones in the past two years that shortened expert timelines for cryptographically-relevant machines.
What This Means for Bitcoin Holders
If you’re an active Bitcoin holder using a modern HD wallet and you haven’t exposed your public key by spending from your primary address, you’re not in the immediate danger zone. Your priority should be understanding whether your wallet software supports address rotation and whether you’ve inadvertently reused addresses that have already spent.
If you’re managing a cold storage setup or paper wallet from the early 2010s, the AmericanFortress proposal could theoretically protect you even if you never return to claim your coins. Whether that protection actually materializes depends on Bitcoin’s governance process accepting a soft fork that freezes certain address categories, a politically charged proposition even if technically sound.
The 100% Solana exposure statistic is worth noting for SOL holders. That chain’s account model apparently leaves all addresses with exposed public keys by default, making quantum protection a network-level concern rather than a user-behavior issue. Solana’s validator set is smaller and more coordinated than Bitcoin’s, which might make protocol upgrades faster but also raises different governance questions.
For the broader market, the $600 billion vulnerable figure provides a rough ceiling on quantum-theft losses if the worst happens before protection arrives. Whether those losses would come as a sudden dump (attackers sweeping dormant wallets and selling) or a slow drain (targeted thefts over months) depends on how quantum capability actually develops, likely somewhere between the science-fiction scenario of instant cracking and the boring reality of gradual, expensive, limited-capacity attacks.
AmericanFortress has proposed one technical path forward. Whether Bitcoin’s notoriously conservative development community accepts a freeze mechanism for Satoshi-era coins remains an open question with implications far beyond cryptography.
Related Reading
- Technology news
- More on Quantum Computing
- More on Bitcoin Security
- More on AmericanFortress
- More on Satoshi Nakamoto
