“People are not good at securing their keys,” said Bryan Bishop, a longtime bitcoin developer. “To the extent that we can write software better and secure [bitcoin] better, that’s a win.
But as of today, Bishop is rolling out a fork-free prototype on GitHub and sharing it out over the Bitcoin Core email list.
The basic idea involves storing bitcoin on-chain in a particularly secure manner that allows for recovery from security mistakes. The on-chain approach is part of what makes Bishop’s vault distinct from a cold wallet.
Cornell professor and Ava Labs founder Emin Gün Sirer was part of the team that proposed bitcoin vaults back in 2016. He told CoinDesk he’s been watching Bishop’s work closely.
“It’s fantastic to see vaults go from concept to reality,” he told CoinDesk in an email. “We would like to see vaults become a standard feature on all cryptocurrencies, as they have the potential to avoid what are called ‘Sorry For Your Loss (SFYL)’ events.”
How it works
The thing about a normal wallet is you only have your own security model to protect you. If someone gets your private key, you have no recourse.
Vaults, as proposed by Bishop and others, offer a Plan B. If your security falters somehow, you have a clawback mechanism.
Users of such vaults would effectively be deciding to limit the pace at which their bitcoin (BTC) could be released in the event of a breach. The stored bitcoin would be divided into a series of what Bishop is calling “shards.” These shards could only release their bitcoin to a hot wallet one at a time at some pre-set interval.
The proposal also calls for something called a watchtower which would monitor vaults. Any time it saw BTC move from a shard, it would likely notify the owner. If the attempt to transfer the bitcoin had not been authorized, the user could activate a…