Evaluating Bitcoin Custody Over Time
Evaluating Custody Across Security, Access, and Time
This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.
Why Custody Changes Over Time
Bitcoin custody exists as an arrangement that changes. Wallets are added. Services are switched. People gain or lose involvement. Software updates. Devices age. What exists today differs from what existed a year ago and from what will exist a year from now.
A single snapshot of custody captures one moment. An evaluation that returns periodically captures how custody changes across moments. This memo examines what it means to evaluate bitcoin custody as an ongoing activity rather than a one-time inventory.
The evaluation spans multiple dimensions: how custody is protected, how it behaves when people become unavailable, and how multiple parties coordinate around it. Each dimension reveals different aspects of the same arrangement.
Why Custody Changes Over Time
Custody is not static. It evolves through deliberate changes and through drift.
Deliberate changes occur when someone adds a new wallet, moves Bitcoin to a different service, or updates their backup strategy. These changes are intentional. The person making them knows custody is different afterward.
Drift occurs without intention. Software updates change how wallets behave. Hardware ages and fails. People forget passwords. Relationships change. A spouse who once knew the location of backup materials may no longer be involved. A business partner who held a key may have left the company. These shifts happen gradually, often without anyone noticing.
An evaluate bitcoin custody approach that occurs only once captures the arrangement at that moment. It does not capture what changed before or after. Periodic evaluation captures custody across multiple moments, making changes visible.
The Three Dimensions
Custody can be examined through different lenses. Each lens reveals different characteristics. A bitcoin custody evaluation framework that spans multiple dimensions provides a more complete picture than one that focuses on a single aspect.
Three dimensions commonly appear in custody evaluation: security, survivability, and coordination. These dimensions overlap but are not identical. Custody can be strong in one dimension and weak in another. Changes that affect one dimension may leave others unchanged—or may affect them in unexpected ways.
The Security Dimension
The security dimension examines how custody is protected against unauthorized access. It asks: who can reach the keys, and what barriers exist between an attacker and the Bitcoin?
Security involves the protection of devices, credentials, and backup materials. A hardware wallet stored in a safe is protected differently than one left on a desk. A seed phrase stored in a bank vault is protected differently than one stored in a desk drawer. A PIN that only one person knows is protected differently than one written on a sticky note.
Security evaluation examines these protections. It identifies what stands between unauthorized parties and custody access. It does not judge whether protections are good or bad—it describes what exists.
Security can change over time. A backup location that was private may become known to others. A password that was strong may be reused elsewhere and compromised. A device that was current may become outdated, running software with known vulnerabilities. Periodic evaluation captures these shifts.
The Survivability Dimension
The survivability dimension examines how custody behaves when the primary operator becomes unavailable. It asks: what happens to Bitcoin access if the person who manages custody dies, becomes incapacitated, or simply disappears?
Survivability involves backup materials, documented instructions, and the distribution of knowledge across people. A custody arrangement where only one person knows the credentials has different survivability characteristics than one where multiple people hold pieces of the puzzle.
Survivability evaluation examines these characteristics. It identifies what access paths exist when the primary operator is not present. It does not predict outcomes—it describes what is available for others to work with.
Survivability can change over time. A person designated to help with recovery may move away. Instructions that were once current may become outdated. Backup materials may be lost or forgotten. Relationships that once supported custody access may dissolve. Periodic evaluation captures these changes.
The Coordination Dimension
The coordination dimension examines how multiple people or entities interact around custody. It asks: who is involved, what roles do they play, and how do their actions depend on each other?
Coordination appears in multisignature wallets, where multiple keys must sign a transaction. It appears in custody services, where a third party holds keys on behalf of the owner. It appears in family arrangements, where different people hold different pieces of information. It appears in business contexts, where employees, partners, and service providers each have roles.
Coordination evaluation examines these relationships. It identifies who is involved, what each party contributes, and what dependencies exist between them. It does not assess whether coordination is good or bad—it maps what exists.
Coordination can change over time. A co-signer may become unreachable. A custody service may change its policies. A family member may lose interest or ability to participate. A business relationship may end. Periodic evaluation captures these shifts in the human and organizational layer of custody.
The Tension Between Dimensions
The three dimensions can pull in different directions. A change that strengthens one dimension may weaken another.
Consider a custody arrangement where a seed phrase is stored in a single location known only to one person. From a security perspective, this limits exposure—fewer people know, fewer chances for compromise. From a survivability perspective, this creates concentration—if that one person becomes unavailable, the seed phrase may be unreachable.
Consider adding a co-signer to a multisignature wallet. From a coordination perspective, this distributes control—no single person can move funds alone. From a survivability perspective, this introduces dependency—if the co-signer becomes unavailable, transactions may become impossible.
A bitcoin custody evaluation method that examines only one dimension may miss these tensions. An evaluation that spans all three dimensions makes the trade-offs visible. It does not resolve them—it describes them.
The Business Scenario
A company holds Bitcoin in a multisignature wallet. Three executives each hold a key. Any two keys can sign a transaction. Documentation describes the arrangement and names the keyholders.
A year passes. One executive leaves the company. The executive's key is not recovered. No one updates the documentation. The wallet still functions—two remaining executives can still sign. But the coordination dimension has changed. The wallet is now effectively two-of-two instead of two-of-three. If either remaining executive becomes unavailable, transactions become impossible.
An evaluate bitcoin custody structure exercise performed after this change would reveal the shift. The documentation says three keyholders. Reality shows two. The coordination dimension no longer matches the stated arrangement. The survivability dimension has degraded—fewer people can participate in signing.
Had this evaluation occurred periodically, the departure would have surfaced as a change. The gap between documentation and reality would have become visible at the time it occurred, not later during a crisis.
The Family Scenario
A person holds Bitcoin across two wallets. A hardware wallet holds most of the funds. A mobile wallet holds a smaller amount for regular transactions. The person's spouse knows about the hardware wallet but not the mobile wallet. The person's adult child knows about the mobile wallet but not the hardware wallet.
From a security perspective, this separation limits exposure—no single person besides the holder knows everything. From a survivability perspective, this creates fragmentation—if the holder dies, neither family member has the full picture. From a coordination perspective, there is no coordination—each family member operates with partial information.
An evaluation across all three dimensions surfaces this pattern. The security dimension shows distribution. The survivability dimension shows gaps. The coordination dimension shows isolation. The evaluation describes these characteristics without judging them.
If the family situation changes—if the spouse and child begin communicating about estate planning, or if relationships become strained—the custody evaluation changes too. Periodic evaluation tracks these shifts.
Evaluation Without Recommendation
Evaluation describes. It does not prescribe.
A bitcoin custody evaluation framework describes how custody is arranged across security, survivability, and coordination dimensions. It identifies what exists, how it connects, and how it has changed. It does not tell anyone what to do about the findings.
The distinction matters. Recommendations involve judgment about what is desirable. Evaluation involves observation of what is present. A custody arrangement can be fully evaluated without any recommendation being made. The evaluation provides information. What someone does with that information is a separate matter.
What follows covers evaluation as an analytical activity. It does not describe evaluation as a decision-making process or an optimization exercise. Evaluation supports understanding. Understanding may or may not lead to action.
The Periodic Nature of Evaluation
Custody changes. Evaluation captures moments. Multiple evaluations capture change.
A single evaluation describes custody at one point in time. It is a snapshot. Two evaluations, separated by time, can be compared. The comparison reveals what changed. Three evaluations reveal patterns. Over longer periods, evaluation becomes a record of custody evolution.
Periodic evaluation does not require fixed intervals. It may occur after significant events—a change in custody structure, a change in personnel, a change in services used. It may occur on a calendar basis. It may occur when circumstances prompt questions about the current state of custody.
The value of periodic evaluation lies in making change visible. What was true last year may not be true today. What is true today may not be true next year. Evaluation that recurs captures these shifts in a form that can be compared across time.
The Executor Scenario
An executor receives responsibility for a deceased person's estate. The estate includes Bitcoin. The executor finds evaluation records from three points in time: one from three years ago, one from eighteen months ago, and one from six months ago.
The oldest evaluation shows custody held in a single wallet with a seed phrase backup in one location. The middle evaluation shows custody split across two wallets, with backups in two locations and a spouse listed as having partial knowledge. The most recent evaluation shows three wallets, backup materials in a safe deposit box, and both the spouse and an adult child listed as having knowledge of different pieces.
The executor sees evolution. Custody became more distributed over time. More people became involved. The structure grew more complex. The executor does not know if these changes were good or bad, but the executor understands what changed. This understanding informs the executor's approach to locating assets and coordinating with family members.
Had only one evaluation existed, the executor would see only that moment. With multiple evaluations, the executor sees a trajectory.
What Evaluation Captures
An evaluate bitcoin custody exercise captures the following at each examination: what custody components exist, how they are protected (security), what access paths exist if the operator is unavailable (survivability), and who is involved and how they depend on each other (coordination).
When performed periodically, evaluation also captures: what changed since the last examination, which dimensions shifted, and where the stated arrangement differs from observable reality.
Evaluation captures observation, not judgment. It describes custody as it exists, not as it ought to exist.
What Evaluation Does Not Capture
Evaluation does not capture what happens under stress. Survivability describes what access paths exist—it does not test whether those paths function when needed. Security describes what protections exist—it does not test whether those protections hold against actual threats. Coordination describes who is involved—it does not test whether those parties can work together under pressure.
Evaluation does not capture future states. It describes the present (or a series of past presents). Custody will continue to change after the most recent evaluation. The evaluation does not predict what that change will be.
Evaluation does not capture recommendations. It does not say what to change, what to keep, or what to prioritize. Evaluation is an input to understanding. It is not a prescription for action.
Conclusion
Bitcoin custody changes over time. Wallets are added, services change, people come and go, and both deliberate changes and gradual drift alter what exists. A single evaluation captures one moment. Periodic evaluation captures custody across moments, making change visible.
Evaluation spans three dimensions: security (how custody is protected), survivability (how custody behaves when the operator is unavailable), and coordination (how multiple parties interact around custody). These dimensions overlap and sometimes pull in different directions. An evaluation that spans all three surfaces tensions that single-dimension reviews may miss.
Evaluation describes—it does not prescribe. A bitcoin custody evaluation framework produces observations about what exists and how it has changed. It does not produce recommendations, judgments, or guarantees. Evaluation supports understanding. Understanding is distinct from action.
Custody that is evaluated periodically becomes custody that is documented across time. The record of evaluations captures evolution. When circumstances change—when someone dies, when a crisis occurs, when questions arise—this record provides context that a single snapshot cannot.
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