Observed Bitcoin Custody Patterns

A reference library for understanding how Bitcoin custody setups behave under stress.

This page is a reference, not guidance. It describes patterns commonly observed when Bitcoin custody setups are subjected to stress. The patterns are not based on your specific results and do not recommend actions, changes, or decisions.

This page is often referenced to understand why a modeled result may appear the way it does, or to recognize patterns that recur across different stress scenarios. You do not need to read it all at once.

I. System-Level Patterns

These patterns describe overall properties of custody setups and often explain why a system is modeled to behave consistently across many different stress scenarios.

Timing of Custody Access (Liquidity Timing)

What Is Observed

Custody systems differ in when access becomes possible during disruption. Some allow immediate execution; others involve waiting, coordination, or external processes.

Under Stress

  • Immediate access structures are commonly observed to exhibit earlier execution once access is initiated.
  • Delayed access structures are commonly observed to exhibit later access windows.
  • Timing characteristics are often less visible during normal use.

Independence of Access Paths

What Is Observed

Many systems appear to have multiple recovery paths, but those paths often rely on the same underlying elements: one person, one account, or one institution.

Under Stress

  • If the shared element is unavailable, several access paths become unavailable together.
  • Backup access relies on the same credentials as primary access.
  • Authority to act exists, but custody access may not be initiatable.

Independence is often assumed based on appearance rather than structure.

Sensitivity to Delay

What Is Observed

Custody systems vary in how access behavior changes as time passes. Some remain stable; others become more fragile over time.

Under Stress

  • Custody access remains theoretically possible but becomes harder to coordinate.
  • Required information or access changes or expires.
  • Participants lose context or availability.

II. Scenario-Based Patterns

These patterns tend to appear when specific stressful conditions disrupt normal assumptions.

Time-Based Degradation

What Is Observed

Some systems rely on elements that change over time, even when no disruptive event occurs: passwords, subscriptions, institutional policies.

Under Stress

  • Access attempts reveal expired or missing elements.
  • Documentation no longer reflects current conditions.

Reliance on Memory

What Is Observed

Many systems depend on information that someone is expected to remember. That information may not be fully written down or may lack context.

Under Stress

  • Some access becomes possible while other access does not.
  • Helpers encounter gaps that cannot be reconstructed.

Sensitivity to Device Loss

What Is Observed

Some systems assume continued access to specific devices or locations.

Under Stress

  • Backups are lost along with primary devices.
  • Access depends on device-based authentication.
  • New devices cannot recreate prior access conditions.

Owner Death or Absence

What Is Observed

Many systems rely on the original owner to explain what exists, initiate custody access, or resolve ambiguity.

Under Stress

  • Legal authority exists, but access cannot be initiated.
  • Instructions lack interpretive context.
  • Custody access depends on assumptions that cannot be confirmed.

Physical Coercion

What Is Observed

Some systems allow immediate access without delay.

Under Stress

  • Access can be compelled under threat.
  • Separation between control and execution narrows.

Legal or Institutional Restriction

What Is Observed

Legal action can block normal access paths without enabling custody access.

Under Stress

  • Authority increases while custody access decreases.
  • Custody access depends on institutional cooperation.
  • Timelines extend without a clear resolution point.

Forced Relocation

What Is Observed

Some systems assume access will occur from a specific location or country.

Under Stress

  • Physical items become unreachable.
  • Location-based assumptions fail.

III. Common Failure-Type Patterns

These patterns describe how systems are commonly observed to fail once custody access is attempted.

Authority and Role Confusion

What Is Observed

Roles and permissions are not always clearly defined or documented.

Under Stress

  • Multiple people believe they can act.
  • No one can demonstrate authority clearly.
  • Custody access stalls due to uncertainty.

Shared Dependencies

What Is Observed

Different recovery paths rely on the same tools, accounts, or services.

Under Stress

  • Backup paths fail together.
  • Redundancy is correlated rather than independent.

Human Process Dependence

What Is Observed

Some systems rely on people following specific steps correctly.

Under Stress

  • Steps are skipped or reordered.
  • Partial execution blocks later custody access paths.

Third-Party Dependence

What Is Observed

Some systems rely on outside services or institutions.

Under Stress

  • Policies or availability change.
  • Cooperation becomes conditional.

Information Availability

What Is Observed

Critical custody access information is assumed to be discoverable.

Under Stress

  • Documents exist but cannot be located.
  • Instructions lack context.
  • Missing details prevent action.

IV. Pattern Overlap

Most real custody setups show multiple patterns at the same time. Common overlaps include delay combined with missing information, shared dependencies combined with human coordination, and legal authority combined with lack of access.

These patterns describe how custody setups are commonly observed to behave under stress. They are descriptive only and do not imply instructions, recommendations, or required changes.

Reference Index

This index lists independent reference memos documenting observed Bitcoin custody behaviors, dependencies, and failure conditions. The documents are descriptive and non-advisory. They do not provide instructions, recommendations, or custody guidance.

Foundational Reports

Desk Reference Memo

Memo Index

Professional & Fiduciary Exposure

Lawyers, financial advisors, accountants, and trustees face distinct fiduciary obligations when clients hold Bitcoin in self-custody. Standard professional frameworks assume custodial intermediaries, centralized account structures, and reversible transactions — none of which apply to Bitcoin held directly. These memos document where professional duty of care intersects with custody infrastructure that professionals cannot inspect, verify, or control.

→ Read the full Professional & Fiduciary Exposure Reference

Authority & Documentation Gaps

Bitcoin custody creates a structural divide between legal authority and technical access. A power of attorney may grant decision-making rights over digital assets, but it does not provide a seed phrase. A will may name an executor, but the executor may lack the knowledge, credentials, or device access to move funds. These memos document the gap between what legal documents authorize and what custody systems actually require — including POA activation timing, trust language enforceability, estate document completeness, and authority conflicts across multiple parties.

→ Read the full Authority & Documentation Gaps Reference

Role Transition & Succession

When custody responsibility shifts — through death, incapacity, divorce, or family transition — the technical access chain must survive independently of the original holder. Bitcoin inheritance risk is not primarily a legal problem; it is an access continuity problem. These memos document executor access gaps, spouse survivability under various custody configurations, incapacity modeling when cognitive decline or sudden unavailability removes the key person, and the structural requirements for a custody system to function after its architect is no longer available.

→ Read the full Role Transition & Succession Reference

Coordination & Dependency Surfaces

Bitcoin custody systems rely on external dependencies that are rarely enumerated and almost never tested. A hardware wallet requires firmware from a vendor. A multisig configuration requires coordination across multiple signers. A backup strategy depends on the physical integrity of a location, the availability of a password manager, or the continued operation of a cloud service. These memos document the hidden dependency chains, shared failure surfaces, single points of failure, vendor risks, and coordination requirements that determine whether a custody system actually functions when it is needed — or silently degrades until recovery is attempted.

→ Read the full Coordination & Dependency Surfaces Reference

Stress & Failure Scenarios

Custody systems are not tested by normal conditions. They are tested by death, divorce, natural disaster, device failure, coercion, prolonged incapacity, and institutional collapse. Most custody configurations that appear functional under routine use contain structural weaknesses that only surface under stress — when a spouse cannot locate a seed phrase, when an executor is blocked by a cosigner timeout, when a hardware wallet fails during an emergency, or when a court demands proof of control that no document provides. These memos model specific failure scenarios and document how custody systems behave when the assumptions they were built on no longer hold.

→ Read the full Stress & Failure Scenarios Reference
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