Adam Back’s Bitcoin infrastructure company Blockstream has launched a new institutional digital asset custody solution developed with French tech giant Thales, as the cryptographer pushes for simpler offline security systems to protect Bitcoin from increasingly sophisticated cyberattacks.
The solution, announced Friday combines Thales’ Hardware Security Modules (HSMs) with Blockstream’s Secure Multi-Party Computation (Secure-MPC) technology, enabling institutions to authorize transactions while keeping sensitive cryptographic operations within dedicated security hardware, the company said.
Unlike traditional MPC implementations, which may perform parts of the signing process outside of dedicated security hardware, Blockstream’s architecture executes the entire signing protocol within the protected environment of Thales’ HSMs, according to Blockstream.
Blockstream co-founder and CEO Adam Back, a pioneering cryptographer whose Hashcash system helped lay the foundation for Bitcoin’s proof-of-work mechanism, told Cointelegraph that traditional MPC protocols are often too complex and require too much communication between devices to be practical for completely offline cold storage.
“When people talk about MPC, they’re talking about some very esoteric and complicated protocols that are hard to secure and very interactive. So you can’t really use them in a cold storage environment,” Back said.
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Adam Back advocates for simpler Bitcoin custody
Back pointed to the $6.3 billion Binance hack as an example of the risks facing internet-connected custody infrastructure, arguing that keeping signing devices offline can help prevent unauthorized access.
According to Binance’s investigation, attackers compromised employees’ devices and obtained credentials that gave them access to the exchange’s wallet signature infrastructure.
When you connect devices to the Internet, including through firewalls, etc., you risk gaining unauthorized access. They can inject hackers into the network, give hackers access to logins they shouldn’t have, and so on.
He also said AI could make existing security challenges more difficult to address, particularly by helping attackers discover subtle flaws in complex MPC implementations.
“The AIs can help attackers find small implementation errors and things like that that may not be obvious,” he said.
Asked whether the broader custody industry would adopt similar offline security models, Back said he hoped so, arguing that institutions should “adapt to the environment” by moving assets into cold storage to reduce exposure to potential AI-powered attacks.
“Complexity is the enemy of security. And the answer is, go back to basics, you know, just refrigerate,” Back added.
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