Bitcoin Could Avoid a Full Quantum Freeze Under New ‘Canary’ Proposal

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

BitMEX Research is proposing a “canary” system as an alternative to the quantum-safe recovery schemes. The new proposal aims to avoid an unnecessary full-scale Bitcoin freeze in response to future quantum computing threats.

BIP-361 and Quantum Freeze Concerns

The ongoing debates around BIP-361 have left the community divided. It is important to note that BIP-361 was recently merged into the Bitcoin repository and pushes for a phased approach where sending funds to quantum-vulnerable addresses would first be restricted for three years, followed by a full freeze on such coins after an additional two years. This plan has drawn criticism from those who believe that 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 sufficient evidence that quantum computers capable of breaking current cryptography will emerge in the near future.

BitMEX Research, on the other hand, has proposed a “canary” system where a freeze is not triggered automatically after a set time. Instead, the network enters a canary watch state, and a freeze only happens 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 no one knows its private key. If any funds from this address are spent, it would indicate that a quantum computer is being used. In the absence of such an event, those coins could continue to be spent normally, potentially with additional safeguards such as temporary restrictions on the spendability of outputs.

Canary Fund

To further support the mechanism, the proposal introduces the concept of a canary fund. This would require users to voluntarily deposit Bitcoin into the special address as a form of bounty. The goal is to incentivize any entity with a functioning 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 multisignature arrangements that allow withdrawal if desired.

However, BitMEX Research acknowledges that this approach carries risks, including the possibility that the bounty may not be large enough to attract the first quantum-capable entity, which could instead choose to exploit other funds. It also stated that a regulated or reputable organization might prefer to claim the canary bounty in a transparent manner.