While current quantum systems are still experimental, research from Google and the California Institute of Technology suggests the timeline could be shorter than previously expected. BitMEX Research proposed a “canary fund” approach, where a special Bitcoin address is used to detect real quantum capability before triggering any defensive measures like freezing vulnerable coins. This is very different from the BIP-361 proposal by Jameson Lopp, which suggested preemptively freezing dormant Bitcoin. Bitcoin Security Under Threat Adam Back, one of the earliest pioneers in the cryptocurrency space, urged the Bitcoin community to begin preparing for a future shaped by quantum computing, even if the threat is still decades away. At Paris Blockchain Week, Back explained that while quantum computing is still largely experimental and progressing slowly, proactive planning is essential to safeguard Bitcoin’s long-term security. Back pointed out that current quantum systems are far from being capable of breaking Bitcoin’s cryptography, and described them as little more than lab experiments. Despite this, he still believes that the safest course of action would be to develop optional upgrades that allow users to transition to quantum-resistant cryptographic methods if necessary. Adam Back This approach, he explained, would ensure that any changes to the Bitcoin network can be implemented gradually and without disruption, rather than being rushed during a crisis. Concerns surrounding quantum computing stem from its theoretical ability to break the cryptographic systems that secure blockchain networks. This could potentially allow malicious actors to access wallets and compromise funds. Although Back previously suggested that such capabilities may still be 20 to 40 years away, recent research challenged that timeline. Studies involving Google and the California Institute of Technology indicate that functional quantum computers could arrive sooner than expected and may require less computational power to crack cryptographic systems. In some projections, Bitcoin’s security could theoretically be broken within minutes. In response to these risks, Blockstream established a dedicated quantum research team and started exploring potential solutions. This includes experimenting with hash-based signature schemes on its Liquid Network, as well as considering how upgrades like Taproot could support alternative cryptographic methods without disrupting existing users. Overall, Back is still confident that the Bitcoin community can respond effectively if the threat becomes imminent. He pointed out that past vulnerabilities were addressed quickly when necessary, and this urgency can drive coordination and consensus. BitMEX Suggests Wait and See Approach to Quantum Risk Meanwhile, BitMEX Research introduced a new proposal to address the potential threat of quantum computing to Bitcoin. The proposal offers a more cautious alternative to the controversial idea of freezing vulnerable coins. X post from MitMEX Rather than immediately restricting access to older Bitcoin holdings that may be susceptible to future quantum attacks, the proposal outlines a “wait and see” strategy that is centered around a so-called canary fund designed to detect real-world quantum capabilities before any drastic measures are taken. The concept revolves around creating a special Bitcoin address using a cryptographic construct known as a Nothing-Up-My-Sleeve Number. This ensures that no one knows the private key, which makes the address effectively unspendable under current technological conditions. However, if a sufficiently powerful quantum computer were developed, it could theoretically derive the private key and access the funds. Users would be encouraged to send Bitcoin to this address as part of a bounty system, incentivizing any entity with quantum capabilities to demonstrate them by attempting to spend from the address. If such a transaction were ever executed, it would act as definitive proof that Bitcoin’s existing cryptographic protections had been compromised. Under this framework, a soft fork would only trigger more aggressive measures, like freezing vulnerable coins, once the threat is proven in practice rather than anticipated in theory. This is very different from the BIP-361 proposal that was put forward by Jameson Lopp and other researchers, which suggested preemptively freezing dormant Bitcoin held in quantum-vulnerable addresses. That proposal attracted a lot of criticism across the community, with many arguing that it undermines Bitcoin’s core principles by potentially restricting access to legitimate funds. BitMEX’s approach introduces what it calls a “canary watch state,” allowing normal transaction activity to continue unless the canary address is compromised. Investors who contribute to the fund would retain flexibility, as they could use multisignature setups and withdraw their funds at any time. Despite presenting a more measured alternative, BitMEX acknowledged that its proposal introduces some complexity and potential risks. However, it argues that these trade-offs may be justified given the highly contentious nature of any solution involving coin freezes.
