Bitcoin Could Avoid Complete Quantum Freeze According to New “Canary” Proposal

Instead of freezing coins early, BitMEX Research suggests waiting for proof, which can be done by using a special address to trigger a freeze if a quantum computer is proven to exist.

A new proposal suggests a mechanism that would trigger a freeze only on quantum vulnerable coins if such a computer is proven to exist.

BitMEX Research proposes a “canary” system as an alternative to quantum-secure recovery systems. The new proposal aims to avoid an unnecessary, large-scale freeze of Bitcoin in response to future quantum computing threats.

Issues with BIP-361 and Quantum Freeze

The ongoing debates surrounding BIP-361 have left the community divided. Importantly, BIP-361 was recently merged into the Bitcoin repository and advocates a phased approach in which sending funds to vulnerable quantum addresses would first be limited for three years, followed by a complete freeze of these coins after an additional two years. The plan has drawn criticism from those who believe users should remain responsible for their own funds and that protocol-level freezes undermine Bitcoin’s core principles, including censorship resistance.

Meanwhile, others question whether there is enough evidence that quantum computers capable of breaking current cryptography will emerge in the near future.

BitMEX Research, on the other hand, proposed a “canary” system in which a freeze does not automatically trigger after a set time. Instead, the network enters a canary watch state and a freeze only occurs if there is on-chain proof that a quantum computer exists.

This proof would come from a special Bitcoin address created using a Nothing-Up-My-Sleeve Number system, which ensures that no one knows its private key. If funds from this address are spent, it would indicate that a quantum computer is in use. In the absence of such an event, these coins could continue to be spent normally, possibly with additional safeguards such as temporary restrictions on the spending ability of the products.

Canary Fund

To further support the mechanism, the proposal introduces the concept of canary funds. This would require users to voluntarily deposit Bitcoin to the special address as a bonus. The aim is to incentivize any entity with a working quantum computer to reveal its capabilities by claiming the funds rather than targeting other users’ holdings, with contributors able to retain some control over their deposits through multi-signature agreements that allow withdrawal if they wish.

You might also like:

However, BitMEX Research acknowledges that this approach carries risks, including the possibility that the premium may not be large enough to attract the first quantum-capable entity, which may instead choose to mine other funds. He also said that a regulated or reputable organization might prefer to claim the Canary Premium in a transparent manner.

Meanwhile, another idea under consideration is that of a “security window,” in which even after restrictions on vulnerable quantum signatures begin, transactions could still be processed but with outputs temporarily locked for a set number of blocks, potentially up to 50,000 blocks, or about a year.