Custody Is a Socio-Technical System, Not a Technical One

Human Factors in Custody System Failures

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

Why Technical Correctness Does Not Predict Custody Outcomes

Custody outcomes are often evaluated after the original system designer is absent. Technically correct systems can still produce unpredictable or stalled outcomes once interpretation, coordination, and authority shift to others.

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Why Technical Correctness Does Not Predict Custody Outcomes

Custody is frequently discussed as a technical problem. Keys are generated. Secrets are stored. Transactions are signed. From this perspective, correctness appears binary: a system either works or it does not. At the protocol level, this framing holds. If a signature verifies, it verifies. If a transaction settles, it settles. Ambiguity is intentionally excluded.

That framing holds only while custody is treated as a closed system.

Once humans are involved, custody behaves differently. A custody system exists to be used, interpreted, and acted upon by people, not by mathematics alone. Intent, legitimacy, authority, timing, and motivation become relevant variables. Outcomes begin to depend not only on formal rules, but on how those rules are understood and executed by others.

This pattern is familiar in law. Legal systems attempt to define binary states—valid or invalid, permitted or prohibited—yet legal outcomes routinely hinge on interpretation. Meaning is contested. Authority is negotiated. Vast effort is spent resolving ambiguity around otherwise precise language. Custody systems exhibit the same behavior. The presence of precise rules does not eliminate interpretation; it relocates it.

Bitcoin illustrates this sharply. At the protocol level, Bitcoin is strictly mathematical. Ownership is not a concept the system recognizes. Control is. If one party acquires signing material, the system responds only to that capability. No distinction is made between justified and unjustified control. This is not an oversight; it is a design property.

As a result, custody outcomes frequently diverge from design intent once the original operator is no longer present to supply context, explanation, or coordination.

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How Human Factors Shape Custody Failure

Because custody must be executed by humans, it necessarily extends beyond cryptography. Secrets must be stored. Instructions must be interpreted. Authority must be recognized by others. Time must pass. Each of these introduces variables that technical systems do not constrain.

The effective boundary of a custody system often expands after activation. During setup, the system may appear to consist of keys, devices, and backups coordinated by a single individual. Once that individual is absent, executors, heirs, attorneys, institutions, and helpers become part of the system regardless of whether they were considered during design. The system becomes open, contested, and dependent on coordination among actors with different incentives and levels of understanding.

Documentation does not resolve this. Documentation is inert until read. Meaning is produced at interpretation time, not at creation time. Interpretation varies by role, literacy, emotional state, and stress. Information can be complete and still unusable if context is missing or trust is degraded. Custody can fail without missing artifacts because meaning collapses rather than access.

Authority further complicates outcomes. Authority is not a technical property; it is a social claim that must be recognized by others. Legal authority, familial authority, and perceived authority frequently diverge. A party may have legal standing without operational access, or operational access without recognized legitimacy. Technical systems do not reconcile these conflicts. They execute whichever control is exercised first.

Time acts as an active component rather than a neutral backdrop. Delay alters incentives, memory, availability, and willingness to act. Context decays. Relationships change. Institutions impose waiting periods. None of this requires a technical failure to alter system behavior. The cryptography remains intact while the human layer degrades.

Stress amplifies these effects. Under calm conditions, systems appear orderly and cooperative. Under stress, coordination capacity collapses. Risk tolerance shifts. Trust narrows. Actions diverge from those anticipated during design. The rules remain unchanged, but behavior does not.

Custody failure therefore often emerges through entropy rather than attack. Algorithms remain sound. Keys remain valid. Outcomes drift because interpretation, coordination, and authority no longer align.

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Assessment

Custody is a socio-technical system whose outcomes emerge from interaction rather than from design purity.

Technical correctness alone cannot predict custody behavior once the original operator is absent. Understanding custody outcomes requires modeling how people, institutions, authority, and time interact under stress, not merely how protocols function in isolation.

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System Context

Examining Bitcoin Custody Under Stress

Executor Access Failure as a Role-Capability Gap

Bitcoin Executor Legal Responsibilities and Access Constraints

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