Bitcoin Custody

[Selqui]

Recently there has been a lot of anguish "How can I safely store my Bitcoin?"

For a long time we were told that a hardware wallet was the safest option, with recommendations to keep the Private Key on dedicated hardware, away from an internet connected device. But then we had incidents of hacked databases of buyers' personal details, painting a big target on holders' backs and who are now waiting for a wrench attack. Or maybe users cannot update their hardware device to the latest firmware? Or maybe the screen digits are fading on their screens? Or recently, the hardware of the device actually transmits the key to a malicious actor! And of course you STILL have to save the seed phrase somewhere.

So then some advocate only ever using a Cold Wallet and a PC that is only ever exposed to the internet for one purpose. A dedicated PC, but who is going to do that? We are told that we have to do this, because one bad browser injected widget can drain all funds, or address poisoning/substitution can send your BTC to a malicious address. Even with a dedicated PC, what about the Private Key? Should that be memorized? What happens in the case of age related mental infirmity, or in the event of an accident? OK, so you have to write the Private Key down. Should multiple copies be kept? and where? What about fires? In a safe deposit box?

Finally some are saying the unthinkable - that holders should use large custodial centralized exchanges instead of self custody for BTC, which is anathema to many of us and a complete betrayal of our principles.

There is another way though

Set up ContinuumDAO's MPA Wallet with a Group on 2 or more nodes. Create a KeyGen (secp256k1 key for SegWit, or a Schnorr key for Taproot). The KeyGen has a public key, but NO PRIVATE KEY. The KeyGen has a Threshold parameter, set by every node in the Group. The Private Key can only be created collectively by at least a Threshold number of keys using the Linux Foundation's Lockness project's Multi Party Computation using state-of-the-art CGGMP24/FROST. The Private Key itself is never exposed.

So now one node initiates sending some BTC to another address (using a stored Known Address of course!) with a Sign Request and some text stating the Purpose of the fund movement. Other nodes in the KeyGen see this SignRequest and the AI harness on their node can optionally check the destination address and Purpose. They can either Reject the transfer, or Accept it. When a Threshold number of nodes have Accepted, the originator is allowed to construct the signature and execute the transaction.

Why is this better than other self custody solutions?

• Unlike almost every other MPC wallet, there is no custodial element in ContinuumDAO's Multi-Party Agent Wallet. ONLY the nodes can sign and there is no rescue key, or OAUTH login etc. You are responsible for making a setup that allows you to recover from a disaster. Happily this is easy with MPA Wallet.
• The software on the nodes is installed by whoever controls each node. No other software is required. Even the application interface is run from software on the node. If ContinuumDAO ceased to exist, the software would continue to run. Software updates are discretionary, but never required.
• The simplest Threshold Signature (TSS) is 2/2 i.e. both nodes in the Group of 2 must sign. A TSS of 2/4 means that any 2 out of 4 nodes in the Group must sign, so that 2 nodes could be used as backup, or be accessible by trusted individuals, for disaster recovery.
• Privacy is paramount. There is no sign-up. No personal details are collected, nothing is sent by post. This is a software solution.
• Everything is encrypted, including communications between users and nodes using ssh tunnels and between nodes using TLS.
• Nodes can be backed up with their databases being encrypted using each node's unique Ed25519 Bootstrap Key. An encrypted database can be stored safely somewhere separate from the Bootstrap Key and then if the node is lost for whatever reason, it can be later recovered. Even if the encrypted database and Bootstrap Key to unlock it are both stolen, they are not sufficient to steal funds, since other nodes would have to be compromised too, due to the MPC TSS algorithm.
• Address poisoning or a wrench attack? No funds move without a Threshold signature from multiple nodes.
• Pieces of paper with seed phrases hidden around the house or in safe deposit boxes? Not required. There is NO PRIVATE KEY with MPC.
• No need to register SSL certs for nodes, thus preserving privacy.

Believe in self custody again. Ask you AI agent to "Install ContinuumDAO's MPA Wallet" on your machines.