BitMEX Research has proposed an alternative to a controversial plan to freeze quantum-vulnerable Bitcoin. Its “canary fund” approach would only trigger a network freeze if a quantum computer proves its capability by spending from a special bounty address. This counters a recent Bitcoin Improvement Proposal, BIP-361, which suggested preemptively freezing dormant coins and faced significant community criticism.
On Thursday, BitMEX Research proposed a soft fork as an alternative to freezing quantum-vulnerable dormant Bitcoin. The system uses a “canary approach,” creating a special Bitcoin address where the private key is unknown but theoretically spendable by a quantum computer.
Users can donate Bitcoin to this address as a bounty, incentivizing any quantum-capable actor to prove the threat by spending from it. Only if someone spends from this canary address would a network freeze automatically activate, proving the quantum threat is real.
This solution provides an alternative mechanism to the BIP-361 proposal from Tuesday. The earlier proposal suggested proactively freezing dormant, quantum-vulnerable Bitcoin to prevent future theft.
BIP-361 drew significant community pushback, with some comments calling it “authoritarian” and “confiscatory.” BitMEX’s proposed “canary watch state” would still allow old coins to be spent unless malicious actors attempt to steal from the canary fund.
Investors participating in the canary fund can use multisignatures and withdraw their Bitcoin at any time. There is also a safety window where quantum-vulnerable transactions could still be allowed after a five-year mark, but with outputs locked for a period.
“While this approach adds complexity and risk, given how controversial any coin freeze is, mitigating the impact of the freeze using this type of system may be worth consideration,” the proposal stated. Meanwhile, BIP-361 co-author Jameson Lopp has said his proposal was more of a “rough idea for a contingency plan” than something ready for activation.
“I know folks don’t like it. I don’t like it myself. I wrote it because I like the alternative even less,” he wrote on X on Wednesday. He described it as a “rough sketch” to approach a potential “looming circulating supply shock” if quantum computing advances.
