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A Novel Post-Quantum Approach: "Proof-Of-Decay" (Cryptographic Half-Life) for Unmigrated Dormant UTXOs

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· bitKingAE · #1 ·

### Context & Problem Statement

As the Bitcoin community discusses how to protect the network from future quantum attacks, we are largely stuck between two bad options for old, exposed-key outputs (like early P2PK or long-dormant wallets):

1. **A Hard Freeze:** Declare unmigrated coins dead after a deadline and lock them forever. (Criticized for violating property rights and punishing lost keys/heirs).

2. **Doing Nothing:** Leave them vulnerable, risking a catastrophic market-wide supply dump if a quantum hacker cracks the keys.

Both choices treat old coins as an “all-or-nothing” jackpot for whoever claims them first—either the hacker gets everything, or nobody gets anything.

### The New Idea: “Proof-of-Decay” (Cryptographic Half-Life)

Instead of artificially throttling transactions or hard-freezing balances, what if the protocol introduces a **cryptographic decay function** tied to block height for any output that stays unmigrated past a future quantum transition deadline?

Think of it like radioactive decay: if an exposed UTXO is not moved to a quantum-safe address before the grace period ends, its balance begins to automatically shrink over time at a predictable, mathematical rate.

#### How it would work:

1. **The Grace Period:** The network sets a multi-year deadline for everyone to upgrade their keys to post-quantum safe formats.

2. **The Decay Clock:** Once the deadline passes, any legacy/exposed UTXO that remains untouched begins a slow, programmatic “decay” (e.g., losing a small percentage of its total satoshis every 50,000 blocks / roughly once a year).

3. **Recycling the Decayed Satoshis:** The satoshis that “decay” away are automatically burned or redirected into the global coinbase reward pool, supporting the Proof-of-Work miners securing the network.

### Why This Changes the Game Theory

* **Destroys the Hacker’s Incentive:** If a quantum hacker spends millions of dollars and computing power to crack an old, abandoned wallet (like a multi-year-old dormant whale or Satoshi-era coins), they realize a harsh economic truth: **the longer they wait, the less Bitcoin is actually left in the wallet.**

* **Eliminates the Market Shock:** Because the supply is slowly and predictably shrinking or trickling back into active circulation over a long period, there is never a sudden, market-crashing supply shock.

* **Fairness for Lost Keys / Heirs:** If a legitimate owner or their family recovers their lost keys years later, their wallet won’t have 100% of its original balance, but it won’t be entirely wiped out either. They can still claim whatever remains, completely bypassing the need for a total coin freeze.

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### Questions for the Community:

I’d love to hear developers’ and cryptographers’ thoughts on an approach like this:

1. Could a mathematical decay rate be enforced at the consensus script level without bloating the UTXO state too severely?

2. Does shifting from “absolute ownership preservation” to “time-based economic decay” offer a better game-theoretic defense against quantum adversaries than a hard freeze?

Looking forward to your feedback on whether a decay/half-life model could work as a creative middle ground!

· Vinicius Cestari · #2 ·

I don’t believe this is a good solution because of these 3 points:

  1. Failure to Neutralize Attacker Incentives: Decay doesn’t eliminate a quantum attacker’s motivation, it simply turns extraction into an optimization problem. Rather than waiting for a wallet to empty out, a rational attacker will wait until the grace period expires and perform a synchronized, mass sweep of exposed UTXOs.
  2. Vulnerability to Accelerated Quantum Advancements: Relying on a multi-year decay schedule assumes quantum capability will evolve linearly. If a sudden algorithmic or hardware breakthrough enables rapid key-breaking, an adversary can drain vulnerable legacy UTXOs before the decay function meaningfully reduces their balance. The decay model fails to protect supply under non-linear quantum advancements.
  3. Penalize Passive Holders: Enforcing time-based balance reductions penalizes passive holders without solving the core problem. Furthermore, if a legacy wallet is already compromised, the decay curve penalizes the true owner while allowing the attacker to time their extraction to maximize profit.