Unchained, the official US Collaborative Custody partner of Bitcoin Magazine, has recently published an in-depth analysis comparing custody strategies for individuals and institutions when it comes to holding bitcoin. The article highlights the importance of considering factors such as the amount of bitcoin, frequency of access, and security requirements when choosing a custody method.
For individuals looking to hold bitcoin in self-custody, options range from singlesig wallets to more secure multisig wallets. Multisig offers threshold security, protecting users from single points of failure and ensuring that funds are not lost if any one component of the setup is compromised. While there are other methods of achieving threshold security, such as Shamir’s secret share (SSS) and multiparty computation (MPC), multisig remains a popular choice for individuals.
In contrast, institutions seeking to secure a bitcoin treasury require more rigorous controls and typically opt for institutional-grade custody solutions. Multisig, SSS, and MPC are all viable options for institutions, with multi-level thresholds offering the highest level of security. This approach combines multisig with additional layers of security on the key level, minimizing counterparty risk and protecting keys from compromise.
One key takeaway from the analysis is that multisig has a higher security ceiling compared to singlesig, making it a preferred choice for securing sizable bitcoin holdings. By utilizing multi-level thresholds, institutions can establish a robust custody structure that distributes risk across multiple key agents.
Overall, the article emphasizes the importance of choosing a custody strategy that aligns with the specific needs and security requirements of individuals and institutions. For more information on custody products and services offered by Unchained, interested parties are encouraged to visit their website.
