Centralization risk from large custodians

In this conversation, Stephan Livera and Kevin Loaec discuss the challenges and advancements in self-custody and multi-signature (multisig) wallets for businesses. They explore the reasons why many businesses are hesitant to adopt self-custody, including regulatory constraints and the current limitations of available tools. 

The discussion highlights the evolution of multisig, the risks associated with centralized custodians, and the introduction of Liana Business as a tailored solution for businesses looking to implement multi-sig setups. They also dive into the importance of defining roles within a multisig framework, the mechanisms for recovery, and the future of recovery paths in Bitcoin. 

Kevin also shares various aspects of Bitcoin custody, focusing on time locks, key management, and the importance of recovery pathways for businesses. He emphasizes the need for user-friendly solutions that mitigate risks associated with key loss and the complexities of managing multiple wallets. 

The discussion also touches on the role of insurance in Bitcoin custody, the potential threats posed by large custodians, and the challenges of maintaining privacy while reusing keys across different setups. 

Takeaways:

🔸Businesses often avoid self-custody due to regulatory concerns.

🔸The tools for self-custody are still not user-friendly enough for many businesses.

🔸Multisig wallets have evolved but still require technical knowledge.

🔸Centralization of funds in custodians poses significant security risks.

🔸Liana Business offers tailored solutions for business self-custody needs.

🔸Recovery pathways are crucial for ensuring access to funds.

🔸Insurance options can mitigate risks associated with key loss.

🔸Employee turnover can complicate key management in businesses.

🔸Replay protection is essential to prevent loss during forks.

🔸Future corporate custody solutions may involve hybrid models with banks.

Timestamps:

(00:00) - Intro

(01:06) - Why aren't businesses doing self custody right now? 

(02:55) - Evolution of multisig and Hardware Wallets

(07:51) - Are there centralization risks with custodians?

(10:24) - What is Liana Business?

(13:11) - Multisig configurations with Liana

(15:24) - Is Liana business optimal for businesses of all sizes?

(17:31) - How does Liana Business address role-based governance?

(25:03) - What are some of the recovery mechanisms in Liana?; Recovery paths 

(29:04) - Understanding Time Locks and Wallet Management

(31:02) - Sponsor

(32:00) - Who are the key holders while setting up Liana business?; Insurance in Bitcoin custody

(37:06) - How should businesses manage key loss?

(38:47) - What are some of the threat vectors in Bitcoin custody? 

(41:07) - What are the privacy concerns with hardware key reuse? 

(48:23) - Seamless key management for businesses

(53:40) - What is Liana business’s USP?

(55:27) - What is the future of corporate Bitcoin custody? 

(58:49) - Balancing convenience and security in Bitcoin custody

Links: 

• https://x.com/KLoaec 

• https://x.com/lianabitcoin 

• https://lianawallet.com/business/ 

• https://x.com/wizardsardine 

Sponsor:

• CoinKite.com (code LIVERA)

Stephan Livera links:

• Follow me on X: @stephanlivera

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