BitMEX Proposes “Canary Fund” to Tackle Quantum Threat Without Freezing Bitcoin

Quantum computing threat has become the talk of the blockchain industry. Therefore, BitMEX Research has proposed a “Canary Fund” system in April 2026 as a direct counter to BIP-361’s controversial Bitcoin freeze plan. 

This news plan offers a proof-first, freeze-later approach that only locks vulnerable coins if a real quantum attack is actually seen on-chain. 

New Approach to a Growing Quantum Concern

The fear around quantum computers breaking Bitcoin’s security has been growing fast. Recently, Coinpedia news reported that a proposal called BIP-361 suggested freezing older Bitcoin addresses over time to prevent possible attacks.

About 34% of Bitcoin, or 6.9 million coins, are still in older addresses that could be at risk.

However, this idea goes against Bitcoin’s core principle of ownership and decentralization, “not your keys, not your coins.”

To address this, BitMEX introduced a different path,  one that focuses on proof before action.

BitMEX’s Alternative: The “Canary Approach,”

BitMEX says that acting too early could cause more harm than good.

Instead, they propose a “Canary Approach,” a system that only reacts when a real threat is proven.

This builds on their overall research series on quantum readiness, which includes:

• Quantum Safe Lamport Signatures
• Taproot Quantum Spend Paths
• Mitigating the Impact of the Quantum Freeze

The Canary Fund is the next step in that framework.

How the Canary Fund Actually Works?

The system creates a special Bitcoin address using a Nothing-Up-My-Sleeve (NUMS) system. It’s a cryptographic method that publicly proves nobody holds the private key to that address.

Users can send Bitcoin to this address as a reward for anyone who can break it using a quantum computer.

If someone ever moves funds from this special wallet, it would be clear proof that quantum computers are strong enough to break Bitcoin’s security.

If nothing happens, there is no freeze, and Bitcoin keeps working as usual.

Therefore, instead of freezing millions of coins based on a possible future risk, the Canary Fund waits for real proof. This helps protect user ownership, reduce market panic, and keep Bitcoin’s decentralized nature intact.

It also creates a fair system where action only happens when it is truly needed.

Incentives and Risk Concerns

However, not everyone agrees with this logic. Bitcoin investor Nic Carter pointed out a major weakness in the idea. 

He argued that a quantum attacker may not act openly or “honorably.” “We don’t necessarily know they will sequence things this way.”

Instead, they could quietly steal funds from large wallets and stay hidden, or target many smaller wallets for higher gains.

BitMEX admits the design is complex and not risk-free. It introduces new assumptions about attacker behavior and adds technical uncertainty. 

But supporters of the idea believe it could reduce the damage of a sudden freeze while giving the network more time to respond if quantum threats ever become real.

For now, this remains a proposal, not a confirmed upgrade.