We describe Bitcoin transactions, restricted transactions called Covenants, and our own research into secure Bitcoin custody using a type of Covenant called Vaults.


Custody sits core to digital asset infrastructure and is dictated by key management. Keys are what generate signatures that can spend bitcoins, and thus, key management determines how digital assets are held and secured. The problem the FCAT team tried to solve was the access, incentives and corresponding attack surfaces that are presented when keys, or a set of keys, are compromised. In that, attackers can arbitrarily spend bitcoins custodied by those compromised keys at will.

The team presents a Vault custody protocol that uses pre-signed transactions, a relative time-lock, and a key-deletion method to activate Covenants. …

Sam Abbassi

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