COINBASE HOLDS 5% OF ALL BITCOIN — IT JUST WROTE THE WISHLIST FOR REWRITING THE NETWORK’S SECURITY. SATOSHI’S COINS ARE ‘A SEPARATE PROBLEM.’ 

Quick Summary

• Coinbase published a post on October 13, 2026 setting out what it wants Bitcoin’s post-quantum migration to look like.
• Coinbase holds roughly 5% of all bitcoin in existence for its clients — banks, asset managers and hedge funds.
• Its asks: flexible address designs (P2MR from BIP-360, P2TRv2), a “1-of-2” hybrid where coins can be spent with either a classical or a post-quantum key, and schemes compatible with MPC custody.
• Coinbase says legacy coins with exposed public keys — including Satoshi-era holdings — are “best treated as a separate governance and engineering problem.”
• Coinbase’s own quantum advisory board estimated around 6.9 million BTC sit in outputs whose public keys are already visible on-chain, roughly 1.7 million of them in legacy P2PK outputs.

What Happened

A Nasdaq-listed company that holds about one of every twenty bitcoin in existence just published its wishlist for changing how the most secure money network on earth protects itself. It framed the document as a contribution.

On October 13, Coinbase released a post titled “Working Together on Bitcoin’s Post-Quantum Readiness,” written by Shashank Agrawal. The exchange custodies around 5% of all bitcoin for clients including banks, asset managers and hedge funds, and it wants the network to start preparing for quantum computers now — not in twenty years, and not when a machine actually shows up.

The technical asks are specific:

• Flexible output designs so new signature schemes can be added or swapped later without redesigning everything. Coinbase names P2MR, proposed in BIP-360, and P2TRv2.
• A hybrid “1-of-2” transition, where the same coins could be spent with either a classical ECDSA or Schnorr key or a post-quantum key. That lets people move gradually instead of on a hard deadline.
• Schemes that fit multi-party computation (MPC) — the technology that splits a signing key between several parties. Coinbase’s own words: “For Coinbase and many of our customers, MPC-friendliness is an important consideration in the choice of PQ schemes.”
• Stateless options, because managing state in signatures is, in Coinbase’s words, “notoriously error-prone and could even lead to forgery.”
• A path for late movers — a discussion about whether users who miss a future cutoff for old signatures could still move their funds afterward.

Coinbase was careful with the framing. “It is intended as an input to an open discussion, not a set of instructions or a final Coinbase position,” the post says. It also says the migration will be “challenging, complex, and a multi-year process.”

Then comes the paragraph that matters most. Coinbase says legacy funds — including Satoshi-era holdings and older outputs with exposed public keys — “are best treated as a separate governance and engineering problem.”

Separate from what? From the part where the network upgrades. Meaning: the millions of bitcoin whose public keys have been sitting in the open for a decade get their own debate. Later. Once the main migration is underway. The word Coinbase chose is governance.

Why This Matters for Bitcoin

Understand what is actually being discussed here. Bitcoin’s signatures are the lock on the door. A powerful enough quantum computer could, in theory, derive a private key from a public key that is already exposed on-chain. Coins behind unspent addresses whose keys have never been revealed are a much harder problem. Coins whose keys are already visible are the sitting ducks.

Coinbase’s own quantum advisory board — Scott Aaronson, Dan Boneh, Justin Drake, Sreeram Kannan, Yehuda Lindell and Dahlia Malkhi — put a number on it earlier this year: roughly 6.9 million BTC sits in outputs with visible public keys, about 1.7 million of those in legacy pay-to-public-key outputs, including early mining rewards. That is not a rounding error. That is a meaningful slice of the entire supply, and it includes coins nobody has a key to.

Now add the second layer: this document is not neutral. It is shaped by the business that wrote it. Coinbase needs a post-quantum scheme that works with MPC custody, because MPC is how custodians hold coins without a single person holding a full key. It wants a hybrid design so institutions can migrate on their own schedule. It wants a path for late movers, because institutions move slowly. Every one of those requirements makes sense for a custodian.

And the design that wins will be the design the biggest custodians can implement. Not the one that is easiest for you to run on a hardware wallet in your desk drawer.

We already know what exposed keys look like at the custodians. Robinhood, Revolut and Binance are sitting on wallets where the public keys are exposed — Robinhood essentially 100%, Revolut 99%, Binance 83%. The people telling you your coins are safe are the ones with the most exposed locks.

There is also a live reminder that this is not hypothetical. Researchers cut the modelled cost of breaking ECDSA by 86% in a single month-long project, and the first quantum-safe transaction already hit mainnet without a fork. Meanwhile, as recently as late September, Bitcoin developers openly admitted they had no quantum plan and Michael Saylor argued that having no plan is the plan.

So the vacuum was there. Coinbase just walked into it with a document shaped by a custody business.

The Love Is Bitcoin Takeaway

Here is the part nobody says out loud: the quantum migration is a custody story wearing a cryptography costume.

If you hold your own keys, the migration is annoying but it is yours. A post-quantum address type shows up, you move your coins, you are done. You do not need permission, a board meeting, a late-mover exemption, or a governance debate. You need a wallet that supports the new scheme and an afternoon.

If Coinbase holds your coins, you get none of that. You get a vote only in the sense that you can leave. The scheme has to fit their MPC custody stack, their institutional clients, their migration timeline, and their late-mover needs. You will be told it is the safest option. It will be — for the company holding 5% of the supply and charging you a fee to hold it.

And the part that should genuinely worry you is that last sentence in Coinbase’s post. Coins with exposed keys — including Satoshi’s — are a “separate governance and engineering problem.” Somebody is going to decide what happens to millions of bitcoin whose keys are visible. That decision will be made in rooms you are not in, by companies with custody businesses, and the outcome will set a precedent for what the network can do to coins it decides are vulnerable. Not your keys, not your coins was a warning. This is the second half: not your keys, not your vote.

Coinbase’s post is genuinely useful engineering. P2MR flexibility is a good idea. The hybrid design is a good idea. The stateless warning is correct. You can take the technical content seriously and still notice who wrote the requirements list, who holds 5% of the supply, and who just described millions of other people’s coins as a governance problem to be sorted out later.

Do not let a custodian design your escape route and then sell you the ticket.

What Beginners Should Do Next

• Learn how Bitcoin keys actually work. If you cannot explain the difference between a public key, a private key and a seed phrase, you cannot judge any of these proposals. Start with how to choose and use a Bitcoin wallet.
• Know where your coins physically are. On an exchange, you are a creditor with a login. In your own wallet, you are the owner. Those two situations produce completely different behaviour in a quantum migration.
• Do not panic-move anything. There is no working quantum machine draining wallets today, and a rushed migration into a bad scheme is a real risk. Education first, action second.
• Watch the proposals, not the headlines. BIP-360, P2MR, P2TRv2, hybrid spending conditions — these are the actual design decisions. Read the BIPs. They are public.
• Understand what custodians will optimise for. MPC-friendly, institution-friendly, gradual. None of those words mean “easiest for a single person with a hardware wallet.” Read our breakdown of what happens when a custodian has a bad day.

FAQ

Does Coinbase hold 5% of all bitcoin?

Coinbase says it manages about 5% of all existing BTC for clients including banks, asset managers and hedge funds. It is custody, not ownership — which is exactly the point.

Is a quantum computer going to steal my bitcoin soon?

No working machine can do this today. But Bitcoin’s migration to quantum-resistant signatures is expected to take years, which is why the industry is arguing about it now rather than later.

What is BIP-360 and P2MR?

BIP-360 proposes a new output type (P2MR) designed so post-quantum signature schemes can be added or swapped later without redesigning how coins are stored. Coinbase backs it as one of the flexible options.

What is the “1-of-2” hybrid Coinbase proposed?

A transition design where the same coins can be spent with either a classical ECDSA or Schnorr key or a post-quantum key. It allows a gradual rollout instead of a single cut-off date.

Why does Coinbase care about MPC compatibility?

Multi-party computation splits signing authority between parties, which is how custodians hold coins without any single person holding a full key. A post-quantum scheme that breaks MPC would break their custody model.

What did Coinbase say about Satoshi-era coins?

It said legacy funds, including Satoshi-era holdings and older outputs with exposed public keys, are “best treated as a separate governance and engineering problem.” In plain English: someone will have to decide what happens to them, separately, later.

Should I move my bitcoin because of this?

No. Nothing about this changes what you should do today: hold your own keys, keep your seed phrase offline, and stay informed. This article is education, not financial advice.

Is this financial advice?

No. It is education only.

Final Thoughts

Coinbase wrote a smart technical document. It also wrote a requirements list for a network it does not own, on behalf of clients who will not hold their own keys, and quietly labelled millions of other people’s coins as a governance problem for later.

Bitcoin does not have shareholders. It has holders. The ones with keys get to move. The ones with accounts get to wait and see what the custodian decides.

So here is the question, and we want the honest answer in the comments: when the network finally has to decide what happens to millions of bitcoin with exposed keys — including Satoshi’s — who do you want holding the pen? A custodian that holds 5% of the supply and a custody business to protect, or the people who actually hold their own keys?

Get a hardware wallet and hold your own keys. Start with our Blockstream Jade guide and use coupon LOVEISBITCOIN at checkout: https://loveisbitcoin.com/bull

This article is for education only and is not financial advice.