Blockstream, a leading Bitcoin infrastructure provider founded by Adam Back, has introduced a new institutional digital asset custody solution aimed at enhancing offline security. The platform, developed in partnership with French technology company Thales, is designed to offer robust protection for Bitcoin against emerging cyber threats.
New custody technology targets offline security
The newly launched custody solution integrates Thales’ hardware security modules (HSMs) with Blockstream’s Secure Multi-Party Computation (Secure-MPC) technology. According to Blockstream, this approach enables institutions to authorize transactions securely while ensuring that all sensitive cryptographic actions remain confined within the HSM.
Blockstream emphasized that, unlike traditional multi-party computation (MPC) solutions which sometimes perform key parts of the signing process outside secure environments, its platform keeps the entire cryptographic signing protocol inside Thales’ hardware modules. This fully contained architecture seeks to eliminate points of exposure that could be targeted by cyberattackers.
Mini dictionary: Secure Multi-Party Computation (Secure-MPC) is a cryptographic technique that enables multiple parties to jointly compute a function without revealing their individual inputs, commonly used in digital asset custody to enhance security by distributing the signing authority.
Adam Back, Blockstream CEO and a renowned cryptographer whose early work helped shape Bitcoin’s proof-of-work concept, stated that most modern MPC protocols are unnecessarily complex and require frequent device communication, which undermines their suitability for fully offline storage of digital assets. He argued that the newly unveiled technology addresses these issues by keeping operations strictly within protected environments.
Adam Back said that “when people talk about MPC, they’re talking about some very esoteric and complicated protocols that are hard to secure and are very interactive. So you can’t really use them in a cold storage setting.”
Risks highlight need for robust offline solutions
Back referenced the $6.3 billion Binance hack to illustrate the vulnerabilities involved in internet-connected custody systems. The 2022 attack, which involved compromised employee devices and stolen credentials, allowed hackers to access wallet-signing infrastructure, demonstrating the risks posed by online exposure.
He suggested that keeping signing devices offline offers crucial advantages by limiting the ways malicious actors can gain unauthorized access. In addition, Back warned that advances in artificial intelligence could further complicate digital asset security, as AI-driven attackers might exploit minor flaws in complex custody protocols.
Back encouraged institutional investors to shift assets to cold storage, arguing that the simplicity of offline systems inherently reduces risk. He noted that complex systems provide more opportunities for security failures, and returning to a basic model could be a safer long-term approach.
He expressed the view that “complexity is the enemy of security. And going back to basics is the answer, you know, just cold-store it.”
Blockstream’s new solution arrives at a time of heightened concern about large-scale crypto theft and increased attacks targeting digital asset custodians worldwide.
Both companies aim to promote the adoption of institutional-grade cold storage tools as the industry prepares for more sophisticated cyber threats in the digital asset sector.
| Custody Model | Key Features | Risk Exposure |
|---|---|---|
| Blockstream + Thales (HSM + Secure-MPC) | All signing inside HSM, offline, multi-party control | Minimized attack surface |
| Conventional MPC | Some operations outside secure hardware, more device interaction | Higher risk from complexity and network exposure |
| Online Custody | Internet-connected devices, centralized access | High risk from remote attacks |
