Two Interpretations of Bitcoin Custody With No Resolution

Ambiguous Custody Materials With No Resolution

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

How Two Interpretations Emerge

Someone dies. Materials related to their bitcoin custody remain. These materials can be read in more than one way. Specifically, two interpretations of bitcoin custody emerge, and neither can be ruled out. Both readings fit the available evidence. Both are plausible. No resolution exists because the holder is gone and no tiebreaker remains to settle which reading is correct.

This analysis addresses the condition of unresolvable interpretive deadlock. It differs from ambiguity, where a single text is unclear. Here, the materials may even appear clear, but they permit two distinct readings that point in different directions. The question is not what the words mean. The question is which meaning matches what the holder actually did.

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How Two Interpretations Emerge

Materials left behind encode information about a custody setup. A seed phrase, a device, notes about accounts, references to locations. These materials say something. But what they say can be assembled in more than one way.

One interpretation might read the materials as describing a single wallet with standard access. Another might read the same materials as describing a multisignature arrangement or a passphrase-protected layer. Both readings account for the evidence. Neither contradicts what was found. The materials support both without endorsing either.

This happens because bitcoin custody allows many configurations. The same seed phrase can generate different wallets depending on derivation paths. The same hardware device can hold standard funds or passphrase-hidden funds. The presence of an object does not specify how it was used. Two competent readers can look at the same materials and construct different pictures of what the holder did.

The holder knew which picture was real. They set up their own system. They used it. The picture in their mind matched reality. But that picture did not transfer fully to the materials left behind. The materials offer pieces. The pieces can be assembled in more than one way. Which assembly is correct cannot be determined from the pieces alone.

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The Structure of Deadlock

When two interpretations of bitcoin custody both fit the evidence, a deadlock forms. Neither interpretation can win by argument. Pointing to the materials does not help because the materials support both. Pointing to technical knowledge does not help because both interpretations are technically valid. The deadlock is structural, not intellectual.

One reader might say: the seed phrase generates wallet A, and wallet A holds the bitcoin. Another reader might say: the seed phrase generates wallet A, but a passphrase was also used, generating wallet B, and wallet B holds the bitcoin. Both readers are describing possible realities. Only one reality exists. The materials do not indicate which one.

Each side of the deadlock can make a coherent case. Each side can explain why their reading fits. Neither side can disprove the other because both readings are consistent with what was found. The deadlock persists not because the readers are foolish but because the evidence genuinely underdetermines the answer.

Effort does not break the deadlock. More analysis of the same materials yields the same two interpretations. Bringing in experts yields opinions that divide along the same lines. The problem is not that people have not tried hard enough. The problem is that the information needed to resolve the question does not exist in the materials. It existed in the holder's mind. The holder is gone.

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Why No Tiebreaker Remains

Resolution requires something that favors one interpretation over the other. A tiebreaker. This could be a statement from the holder, a dated record of the setup process, a note clarifying which configuration was used. Without a tiebreaker, both interpretations remain equally supported.

The holder was the ultimate tiebreaker when alive. Any question about their setup could be answered by asking them. They could say: I used a passphrase, or I did not. They could point to the correct wallet. They could demonstrate access. Their presence made interpretation easy because they could resolve ambiguity through direct answer.

Death removes this tiebreaker permanently. No questions can be asked. No demonstrations can be given. Whatever the holder knew, they took with them. The materials left behind carry only what was written down, stored, or implied. If the materials do not specify the answer, the answer is not available.

Some holders create tiebreakers intentionally. They write detailed setup records. They explain their configuration in letters. They leave notes clarifying exactly what exists and how to access it. Other holders do not. They operate their custody during life and assume they will always be present to explain. When they are not present, the explanation never arrives.

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Parallel Realities

Until the deadlock is somehow broken, two parallel realities exist in the minds of those trying to recover the bitcoin. In one reality, interpretation A is correct. In another reality, interpretation B is correct. Both realities feel real to those who hold them. Neither can be proven. Neither can be discarded.

This is disorienting. People expect reality to be singular. They expect questions about facts to have answers. The existence of two equally valid interpretations violates this expectation. It creates a situation where the question "what did the holder do?" has no definite answer accessible to the living.

Living with parallel realities is difficult. Decisions demand a single path. Attempting recovery requires choosing one interpretation. But the choice is arbitrary in the epistemic sense. No rational process leads from the evidence to one interpretation over the other. Any choice is a leap, not a conclusion.

The parallel realities may persist indefinitely. If neither interpretation can be tested without risk, no resolution may ever come. The bitcoin sits, accessible perhaps under one interpretation or the other, while those who would inherit it remain unable to determine which interpretation describes the actual world.

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The Shape of Practical Consequences

Unresolved interpretation affects what happens next. If two heirs favor different interpretations, conflict emerges. Each believes they understand the situation correctly. Neither can convince the other because neither has evidence the other lacks. The disagreement is not about values but about facts that cannot be determined.

Professionals brought in to help face the same deadlock. An attorney reviews the materials and may favor one interpretation. A bitcoin expert reviews them and may favor the other. Their credentials do not break the deadlock. Expertise helps identify possible interpretations. It does not select among them when both are possible.

Attempts to test one interpretation may be irreversible. Entering a passphrase that does not match the holder's actual passphrase does nothing harmful on its own. But if the testing process involves limited attempts or device lockouts, wrong guesses accumulate risk. Testing interpretation A may foreclose the ability to test interpretation B. The deadlock's stakes rise with each attempt.

Waiting solves nothing. The deadlock does not resolve with time. The materials do not become clearer. The holder does not return to explain. Delay simply postpones the moment when someone must choose despite uncertainty. Meanwhile, the bitcoin remains inaccessible under both interpretations until action is taken.

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The Finality of Absent Information

Information that was never recorded cannot be recovered. If the holder did not write down which configuration they used, that information is gone. It may exist in no form anywhere. The holder's brain held it. The brain is no longer functioning or accessible. The information died with the holder.

This finality is absolute. No technology recovers information that was never externalized. No investigation finds records that were never created. No interview elicits memories from someone who is dead. The finality sets a hard boundary on what resolution is possible. If the answer was only ever in the holder's mind, the answer is now nowhere.

Others may have partial information. A spouse might remember conversations. A friend might recall discussions about bitcoin. These fragments can be valuable. They can also be misleading. Secondhand memory is not the same as firsthand knowledge. Someone remembering what the holder said is not the same as the holder explaining directly. Fragments may suggest one interpretation or the other without proving either.

The situation inverts normal epistemic confidence. Usually, more investigation brings clarity. Here, investigation reaches a wall quickly. The materials are examined. The possible interpretations are identified. And then nothing further can be learned because nothing further exists to learn. The boundary is not time or effort. It is the absence of the information itself.

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Living Without Resolution

Some situations admit no resolution and require those involved to act anyway. Two interpretations of bitcoin custody with no resolution may be such a situation. The inheritors may need to choose a path knowing they cannot verify it is correct. This is unpleasant but may be necessary.

The choice, if made, does not become correct simply by being made. It becomes the path that was taken. If it leads to the bitcoin, the interpretation it embodied happened to match reality. If it fails, the interpretation was wrong, or the bitcoin no longer exists, or some other explanation applies. Success or failure provides feedback. It does not provide retroactive proof of correctness.

Those who cannot choose may find the bitcoin remains permanently inaccessible. Not because access is impossible but because no one was willing to act on an uncertain interpretation. The deadlock paralyzes. The paralysis preserves the deadlock. Years may pass with the bitcoin sitting in a state of Schrödinger's inheritance, potentially accessible yet practically untouched.

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Conclusion

Two interpretations of bitcoin custody can emerge from the same set of materials when both readings fit the evidence and neither can be ruled out. The holder knew which interpretation matched reality. The holder is gone. No tiebreaker remains to settle the question.

The deadlock is structural. More analysis of the same materials does not resolve it. Bringing in experts does not resolve it. The information needed to choose between interpretations was never recorded or has been lost. Without that information, both interpretations persist as equally valid, equally unverifiable possibilities.

Those facing this deadlock must act without resolution or accept permanent inaction. Neither path is satisfying. Both are consequences of a situation where the answer existed once, in a mind now silent, and was never fully captured in a form the living can access.

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