failure family

custody and key loss

14 claims across 4 works.

• Irrevocability of decentralized errors: In a truly decentralized system any mistake, such as a stolen or lost password or a programming bug, is permanent and irrevocable.
• Irrevocability of error under code-is-law: In a truly decentralized system where code is law, any mistake such as a stolen or lost password or a programming bug is permanent and irrevocable, be
• custody gap blocks institutional entry: Without the ability to rely on proven custody providers, mainstream and legacy institutional investors are restrained from making digital asset invest
• ownership surrender as price of access: The majority of digital asset custody providers and digital asset exchanges require customers to surrender ownership of their digital assets as a prec
• irrecoverable private key loss: A private key differs from a password in that it is immutable and cannot be reset, so if the key is lost or stolen access to the digital asset may be
• hot wallet exposure: Hot storage buys easy access and quick transferability of digital assets at the cost of exposure to cyber attacks and to the difficulty of keeping pri
• exchange IOU substitution for asset ownership: Centralized cryptocurrency exchanges require users to hand over their assets and then act as custodian, issuing what are essentially IOUs for users to
• exchange honeypot: Because a wallet provider or exchange that has custody of a digital asset gains full control over transactions, hacking a digital asset exchange is eq
• no written loss allocation policy: Custodial exchanges are largely unprepared for breach: only 53 percent of small custodial exchanges and 78 percent of large custodial exchanges have a
• cold storage retrieval latency: Cold storage trades security for accessibility: retrieving digital assets from cold storage can take many hours or even days, which makes cold storage
• single agent key person risk: Cold wallets typically lack the multisig feature that is common in hot storage, so the single employee acting as agent for a corporation may be the on
• underdeveloped custody suppresses institutional demand: Institutional investors are less likely to engage in digital asset investments where custody solutions for digital assets are underdeveloped, and they
• uninsured custody providers: Insurance coverage among digital asset service providers is far from universal: 46 percent of surveyed service providers reported not being insured ag
• combined custody and brokerage role: Because digital asset exchanges perform both the traditional broker dealer function and the custody function, they face uncertainties and increased li