Adam Back makes case for simpler security as Blockstream launches Bitcoin custody system

What happened

Adam Back’s Bitcoin infrastructure company Blockstream has launched a new institutional digital asset custody solution developed with French technology group Thales, as the cryptographer pushes for simpler, offline security systems to protect Bitcoin against increasingly sophisticated cyberattacks. The solution, announced Friday, combines Thales’ hardware security modules (HSMs) with Blockstream’s Secure Multi-Party Computation (Secure-MPC) technology, allowing institutions to authorize transactions while keeping sensitive cryptographic operations within dedicated security hardware, according to the company.

According to Binance’s investigation , attackers compromised employee devices and obtained credentials that allowed them to access the exchange’s wallet-signing infrastructure. Blockstream’s new custody system, developed with Thales, operates with dedicated hardware for transaction signing as Adam Back advocates for offline security to reduce cyber risks.

Unlike conventional MPC implementations that may perform portions of the signing process outside dedicated security hardware, Blockstream said its architecture executes the entire signing protocol within the protected environment of Thales’ HSMs. Blockstream co-founder and CEO Adam Back, a pioneering cryptographer whose Hashcash system helped lay the groundwork for Bitcoin’s proof-of-work mechanism, told Cointelegraph that conventional MPC protocols are often too complex and require too much communication between devices to be practical for fully offline cold storage.

“When people talk about MPC, they’re talking about some very esoteric and complicated protocols that are hard to secure and are very interactive. So you can’t really use them in a cold storage setting,” Back said.