MISC® Overview

MISC® is not a single custody architecture, but rather a set of principles that govern a custody solution. The principles are derived from the two forms of custody that the industry has each identified as best practice for bitcoin custody:

1. Collaborative self-custody (default operating mode):

  • Security: Multi-device multi-signature bitcoin-only vault with backup-key at an audited, regulated and specialized digital assets institution.
  • Sovereignty: Sole power of disposal rests with the owner.
  • Privacy: Only the owner has visibility of the assets.

2. Multi-Institution custody (backup):

  • Security: Restoration of an owner's or their heirs' access to assets can always be achieved through coordination between multiple institutions. No single institution ever gains sole power of disposal.
  • Peace of mind: The institutions responsible and liable for the security architecture are audited, regulated and specialized entities.

One implementation of MISC® is set out below and on the following pages as an example.

 

Vault specs

  • Open-source, bitcoin-only, 2-of-3 native SegWit multi-signature vault
  • Owner controls two geographically distributed keys
  • Block Inc., a US-listed and regulated Fortune 500 financial institution acts as technology and collaborative custody partner
    • maintaining the soft- and hardware of the vault; and
    • managing the third key
  • An encrypted copy of one owner key is backed up to the cloud. Only the owner can decrypt the cloud backup:
    • With their other key; or
    • With the help of trusted recovery contact(s) like family members, friends or an attorney of their choice
  • The owner can encrypt one of their keys using the beneficiary's or executor's key. The collaborative custody partner will then hold that encrypted "inheritance" key in escrow. When the beneficiary or executor initiates the inheritance process, a six-month security period begins. During this period, the owner will receive periodic messages alerting them of the inheritance claim. After the six-month security period expires, the collaborative custody partner will give the beneficiary or executor the inheritance key and co-sign a transaction with its key to transfer the estate to the beneficiary or executor.

Key specs

  • Different entropy source for each key
  • Owner keys: 1 smartphone-app key + 1 cold hardware key with screen
  • Collaborative custody partner key: AWS Nitro Enclave – hardware-isolated, secure execution environment

Let's walk through how this setup guarantees security, privacy, sovereignty and peace of mind.