$BTC BitMEX’s Canary Fund vs Bitcoin Quantum Freeze

Background

Quantum computing poses a potential threat to Bitcoin’s security, as it could break traditional cryptographic protections.

BIP‑361 Proposal

Earlier this week, BIP‑361 suggested freezing dormant, quantum‑vulnerable Bitcoins to prevent theft. However, the community criticized it as “authoritarian” and “confiscatory.”

BitMEX’s Alternative: The Canary Fund

- BitMEX Research introduced a “canary fund” approach.

- A special Bitcoin address is created using a cryptographic proof (NUMS).

- Anyone can donate BTC to this address.

- If a quantum‑capable actor spends from it, the alarm is triggered and a freeze activates automatically.

- Until then, old coins remain spendable.

Flexibility for Investors

- Participants can use multisignatures.

- BTC can be withdrawn anytime.

- A safety window allows vulnerable transactions even after five years, with locked outputs.

Why It Matters

This system adds complexity but avoids the heavy‑handed freeze of BIP‑361. It balances caution with freedom, making it a noteworthy alternative.

Community Note

Jameson Lopp, co‑author of BIP‑361, clarified that his proposal was only a “rough contingency plan,” not a finalized activation idea.

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Takeaway:

The Canary Fund offers a “wait‑and‑see” mechanism for Bitcoin’s quantum future, aiming to protect security without undermining decentralization. #USMilitaryToBlockadeStraitOfHormuz #USDCFreezeDebate #SECEasesBrokerRulesforCertainDeFiInterfaces #CryptoMarketRebounds #GoldmanSachsFilesforBitcoinIncomeETF