Partial Recovery as a Failure Mode

Partial Recovery That Stalls Before Completion

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

How Partial Recovery Masks Unresolved Dependencies

Partial recovery occurs when some level of access is restored after a disruption, but completion has not occurred. Initial recovery signals appear positive but are not terminal. Progress has happened, but the system is not fully restored.

Partial recovery occupies a middle state that is often misread. It is neither total loss nor full restoration. It presents as forward motion while concealing structural obstacles that remain unresolved. The system appears to be working, which changes how subsequent problems are interpreted.

This memo establishes a baseline frame for understanding partial recovery as a distinct condition with its own dynamics, rather than an intermediate step on a linear path toward full recovery. The distinction matters because partial recovery does not behave like a lesser version of success. It behaves like a separate failure mode with unique characteristics.

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How Partial Recovery Masks Unresolved Dependencies

A common pattern emerges when recovery begins but does not complete.

The system reflects regained access to one component while other components remain inaccessible. The system exhibits partial responsiveness that is mistaken for systemic recovery. A single unlocked element creates the impression that the broader system is functional, even when critical dependencies remain unmet.

Consider a wallet interface that becomes accessible after credentials are located. The application opens. Balances appear. The visual presentation suggests that recovery has succeeded. Yet signing authority may require an additional key or device that is unavailable. Access exists, but control does not. The distinction between viewing assets and moving assets is not always visible in the interface, and the person attempting recovery may not recognize that a fundamental capability remains missing.

Activity often resumes briefly before encountering new blockers. Initial interaction is possible, creating the appearance of momentum, but progress halts once deeper dependencies are encountered. The system responds to early inputs, which reinforces the belief that it will continue responding to later inputs. When it stops responding, the halt feels unexpected rather than predictable.

Balances can be viewed and transaction history loads, but any attempt to move assets triggers requirements for confirmations, approvals, or credentials that cannot be satisfied. A multi-signature wallet may display its contents while requiring two of three keys to authorize a transaction. If only one key is available, the wallet is visible but immobile. The person recovering may not understand why the "send" function fails, or may assume the failure is temporary.

Recovery often appears successful at an intermediate stage, masking unresolved dependencies. The system reaches a visible milestone that resembles completion, even though critical steps remain unmet. The milestone creates a false sense of closure. Energy that would otherwise be directed toward remaining obstacles is redirected toward other concerns, under the assumption that the hard part is finished.

Funds are identified and verified as belonging to the system, yet transfer or consolidation depends on legal authority, co-signers, or time delays that are not yet resolved. An executor may confirm that Bitcoin exists in an estate, report that finding to beneficiaries, and move on to other estate matters—not realizing that the technical ability to move those funds requires coordination that has not yet occurred. The confirmation of existence is treated as confirmation of recoverability, even though these are separate conditions.

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How Partial Access Changes Interpretation and Behavior

Partial recovery introduces dynamics that do not appear in either total loss or full recovery. These dynamics affect interpretation, decision-making, and subsequent actions.

The system treats partial access as confirmation of overall recoverability. Early success alters interpretation, reframing the situation as "mostly solved" rather than "partially unlocked." The psychological shift is significant. A problem that feels mostly solved receives less attention, less urgency, and fewer resources than a problem that feels unresolved.

Once one wallet opens, the remaining locked components are assumed to be similarly recoverable, even though they rely on different credentials or actors. A hardware wallet that unlocks with a PIN may sit alongside a multisig arrangement that requires coordination with a third-party service. The ease of the first recovery creates an expectation that the second will be similarly straightforward. When it is not, the difficulty feels anomalous rather than characteristic.

Downstream steps depend on elements not unlocked by initial recovery. Recovery is sequential, but early stages do not activate later requirements. The act of completing step one does not prepare the ground for step two. Each stage has its own dependencies, and those dependencies may be entirely unrelated to the dependencies that were satisfied earlier.

Viewing assets does not satisfy requirements for spending limits, inheritance triggers, or multi-party coordination that must occur later in the process. A beneficiary who gains read access to a wallet may believe they are close to completion, not realizing that the next step requires a notarized document, a waiting period, or the participation of a co-signer who has not yet been contacted. The gap between visibility and control can span weeks or months, even when visibility is achieved immediately.

Confidence increases prematurely, altering interpretation of subsequent failures. Later obstacles are reframed as temporary or unexpected rather than structural. The narrative shifts from "we are attempting recovery" to "we have recovered, and now we are dealing with minor complications." This reframing affects how seriously problems are treated and how quickly they are escalated.

When a later step fails, it is interpreted as a technical glitch or delay, rather than evidence that a core dependency remains unresolved. A co-signer who does not respond to an email may be seen as slow rather than unavailable. A time-lock that prevents immediate movement may be seen as an inconvenience rather than a fundamental constraint. The framing of "almost done" makes it difficult to recognize that "not done" may be the more accurate description.

Partial recovery can introduce new failure paths by interacting with the system in a partially recovered state. Partial interaction changes system state, expectations, or timelines, introducing risks that would not exist if the system remained untouched. The act of attempting recovery is not neutral. It leaves traces, triggers mechanisms, and alters conditions in ways that affect subsequent attempts.

Attempted actions reset time locks, invalidate cached data, alert third parties, or exhaust limited attempts, making subsequent recovery harder or more constrained. A wallet with a PIN attempt limit may lock permanently after too many failed entries. A time-locked transaction may reset its countdown if conditions change. A third-party service may flag an account for review after unusual access patterns, introducing delays that would not have occurred if the first attempt had succeeded or had never been made.

These dynamics are not edge cases. They are structural features of systems that separate access from control, visibility from authority, and initial entry from final settlement. Partial recovery exposes these separations in ways that total loss does not, because total loss does not create the impression of progress.

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Why Partial Recovery Is Not Neutral

Partial recovery is often treated as a positive development. Some access is better than no access. Some progress is better than none. This framing is intuitive but misleading.

Partial recovery changes the situation in ways that are not purely additive. It introduces new information, new expectations, and new risks. The person recovering now believes something about the system that may or may not be accurate. They have taken actions that may or may not be reversible. They have made commitments—to themselves, to beneficiaries, to legal processes—that are based on an incomplete picture.

A widow who tells her attorney that the Bitcoin has been recovered has changed the legal posture of the estate, even if what she means is that she can see the Bitcoin but not move it. An executor who reports to beneficiaries that funds are accessible has created expectations that may not be satisfiable on the timeline implied. The partial recovery has generated consequences beyond the technical domain.

The system itself may also be altered. Actions taken during partial recovery can change the state of wallets, the status of accounts, the configuration of security mechanisms, and the relationship with third-party services. Some of these changes are reversible. Some are not. The person recovering may not know which category a given change falls into until after the change has been made.

Partial recovery is a distinct state with its own dynamics, risks, and failure surfaces—separate from both total loss and full recovery. Recognizing it as such allows for more accurate interpretation of what has happened and what remains.

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Summary

Partial recovery is a distinct failure mode rather than an incomplete success.

It describes modeled behavior: how systems behave when recovery is incomplete but appears sufficient. The dynamics outlined here—premature confidence, masked dependencies, state changes from interaction, and reframed subsequent failures—are structural features of partial recovery, not errors in execution.

The distinction matters because it affects interpretation. A situation understood as "almost recovered" will be handled differently than a situation understood as "partially recovered with unresolved dependencies." The words sound similar. The implications are not.

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System Context

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Auditing My Bitcoin Wallet

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