The Bitcoin whitepaper at 18: who holds the keys now?

The Bitcoin whitepaper is the nine-page paper Satoshi Nakamoto published on October 31, 2008, titled "Bitcoin: A Peer-to-Peer Electronic Cash System." It proposed a way for people to send money directly to one another without a bank or other trusted third party. Eighteen years later, many bitcoiners rely on custodians to hold their keys. For those who choose self-custody, multisig can reduce the risk of relying on a single key.

On October 31, 2008, someone using the name Satoshi Nakamoto sent a short email to a cryptography mailing list. It described "a new electronic cash system that's fully peer-to-peer, with no trusted third party," and it linked to a nine-page paper.

Eighteen years later, the company that holds most of the bitcoin backing US spot ETFs calls itself "the trusted counterparty." That puts an intermediary back into a system designed to let people transact without one.

You may already use a hardware wallet, store your seed phrase somewhere safe, and protect it with a passphrase. But could a failure at one company, a compromised device, or a dishonest reseller still put your bitcoin at risk?

[Embed: the whitepaper anniversary video]

The problem Satoshi named was trust

The whitepaper opens by describing online payments that "rely almost exclusively on financial institutions serving as trusted third parties." A paragraph later, it proposes a payment system "based on cryptographic proof instead of trust."

The rest of the paper explains how the network reaches agreement on transactions. Nodes group transactions into blocks, chain each block to the last with proof-of-work, and treat the longest chain as the record anyone can check. Together, these mechanisms prevent the same coin from being spent twice without a central party keeping the books.

The paper is about payments. Satoshi made the custody point a few months later, when he introduced the software on the P2P Foundation forum in February 2009. He wrote that banks "must be trusted to hold our money," and that in Bitcoin, users "hold the crypto keys to their own money."

That second line is where self-custody starts. Holding your own keys lets you transact without relying on a custodian.

Eighteen years later, the middlemen came back

Custodians have made bitcoin easier to buy and hold. Their failures have also shown what customers risk when someone else controls the keys.

On January 3, 2009, Satoshi mined the genesis block with a newspaper headline embedded in it: "Chancellor on brink of second bailout for banks." Nine days later, he sent 10 BTC to Hal Finney, and two people moved money with no institution between them.

Most ETF bitcoin sits with one custodian

US spot bitcoin ETFs held about 1.29 million BTC in early October. Coinbase's CEO, Brian Armstrong, said in February that Coinbase has "80% plus market share" of custody for those funds, and he called the company "the trusted counterparty."

Those funds have custody safeguards. Coinbase says the bitcoin sits in cold storage, its custody operation produces SOC 1 and SOC 2 audit reports, and each fund must hold real bitcoin behind every share.

Shareholders generally cannot verify those holdings independently onchain. Coinbase's CFO, Alesia Haas, said the company "would never disclose addresses that we hold on behalf of clients." One issuer, Bitwise, publishes its fund's addresses so anyone can verify them onchain. For most ETF shareholders, verification means trusting an auditor's report.

None of this makes an ETF the wrong choice for everyone. Casa's CEO, Nick Neuman, said in January that "not everyone wants to be a sovereign individual right now." The question is whether you understand who controls the keys and what happens if that custodian fails or suspends withdrawals.

Exchanges also hold bitcoin on behalf of customers. On September 24, Bitget suspended all withdrawals after attackers took $351.6 million from its hot and warm wallets, a figure it later revised to $387.5 million. Bitget says its Protection Fund covers the loss, and bitcoin withdrawals reopened on September 28. For four days, whether customers could move their own bitcoin was Bitget's decision.

Falling exchange balances do not necessarily mean more self-custody

Exchange balances keep falling. CryptoQuant puts bitcoin held on exchanges at about 2.67 million BTC, down from about 2.8 million in February.

People often quote that number as proof that bitcoiners are taking custody back. Exchange data can't tell you where the coins went, though. Some move to wallets their owners control, some move to institutional custodians, and bitcoin bought through an ETF usually goes straight to a custodian that exchange data doesn't track.

Trackers also disagree on the total because each one labels a different set of wallets as exchange wallets. If you follow this number, stick with one provider and watch the direction rather than the exact figure.

Even when coins move into self-custody, owners may still depend on a device manufacturer or, with bitcoin-backed tokens, the party holding the underlying bitcoin.

Self-custody still has dependencies

This fall produced two examples that involved people who held their own keys.

The first is the Liquid Network, a sidechain that runs alongside bitcoin. Users hold a token called L-BTC in their own wallets, and the federation keeps a real bitcoin behind each one in its 11-of-15 multisig.

On September 6, a software bug let an attacker create about 4,000 L-BTC with nothing behind them and redeem them for real bitcoin. About 3,400 BTC came back the next day. Direct redemptions stopped after the exploit. On October 20, Liquid restored swaps from L-BTC back to bitcoin through participating swap providers, but direct peg-outs through the federation remain restricted until the reserve is fully backed again, and Liquid hasn't given a date. As of October 28, Liquid’s reserve dashboard showed about 3,649 BTC backing about 4,249 L-BTC in circulation, roughly 86%. JAN3 CEO Samson Mow said the remaining shortfall of about 600 BTC would be added within days.

The attacker never stole any of the federation's keys, and the reserve sat in a multisig. Liquid users held their own keys the whole time, but those keys controlled a claim on bitcoin that someone else held.

The second example involves hardware wallets. In October, the hardware wallet maker Ledger found that devices sold through one reseller carried a hidden implant that stole recovery phrases. Owners who never shared their phrase with anyone still lost funds because someone had tampered with the one device they relied on before it reached them.

Casa co-founder and Chief Security Officer Jameson Lopp pointed out that compromised hardware is nothing new, with counterfeit Trezor One devices sold as far back as 2018. These examples involve different risks: a custodian controls the keys, a federation controls access to reserves, and a compromised device can expose a key you hold yourself.

Why many bitcoiners still hand over their keys

Holding your own keys comes with real challenges.

It’s all on you: there’s no password reset, so losing your keys and your backup means losing your bitcoin. In 2013, James Howells lost a hard drive holding the keys to 8,000 bitcoin, and in March 2025 a UK appeals court rejected his bid to dig through the landfill for it. One device or one backup can become a single point of failure, as the Ledger implant showed.

And the questions pile up: where to keep the backup, what happens in a fire, who inherits it. For many people, those questions are why a custodian feels easier. Casa exists to provide a secure foundation for people to take self-custody.

Multisig reduces dependence on a single key

Multisig requires a quorum, a set number of keys, to authorize a transaction. A 3-key vault is a multisig wallet where any two of its three keys can sign. With the keys held separately and made by different vendors, no single key can move funds alone, and a flaw at one vendor can’t reach every key.

In a 2-of-3 wallet, an attacker who copies one device's recovery phrase has only one of the two keys needed to spend. The remaining keys let you move the funds to a new wallet configuration that excludes the compromised key.

Casa's Wealth Security Protocol spreads a vault's keys across different manufacturers for that reason. If a malicious actor were to infiltrate and tamper with the devices produced by any one supplier, it would not be enough to compromise your vault. Using devices from different manufacturers reduces the chance that a compromised supplier affects multiple keys and buying straight from each maker, where you can, reduces supply-chain risk further. Casa buys the devices it ships to Premium members directly from the companies that make them, and you can bring your own.

If Casa holds one of the three keys, it's fair to ask whether Casa is a trusted third party too.

The Casa Key alone cannot authorize a transaction. In a 3-key multisig vault, you hold the other two keys, which is enough to move your bitcoin without Casa. Through Sovereign Recovery, you can move funds with open-source software.

Casa helps with key replacement, routine health checks, and inheritance planning. Members can also get support from trained advisors.

A single hardware wallet gives you self-custody. A multisig vault using devices from different manufacturers adds protection against the loss or compromise of one key.

A 3-key vault can start with the hardware wallet you already own

Casa guides you through setting up a vault, and this step-by-step walkthrough shows a full multi-vendor setup.

1. Start with the keys you have. Casa's Standard membership includes a 3-key vault: a mobile key on your phone, a hardware wallet, and the Casa Key. You can use a hardware wallet you already own.
2. Buy any new device from its maker. This reduces the risk of receiving a tampered device.
3. Send a small test amount first. Receive it, spend it, and confirm the vault behaves the way you expect before you move a significant position, as Casa's post-setup checklist recommends.
4. Store each key in a different place. Keeping keys apart reduces the risk that a single fire, theft, or other incident compromises the two keys needed to spend. Casa's guide to key distribution covers where to keep each one.
5. Keep your Sovereign Recovery instructions with your records. They show how to move your funds with open-source software, without the Casa app.
6. Check in on it. Casa's health checks and advisors help you confirm each key still works and guide you through replacing one that doesn't.

Five multisig mistakes that undo the protection

Multisig security also depends on backups, key storage, and recovery planning. A multisig setup holds up best when you've backed up the wallet descriptor, spread the devices from different manufacturers across different places, and tested recovery.

• No backup of the wallet's configuration. Restoring a multisig wallet takes more than seeds. It also needs the correct wallet configuration. Incorrect public-key information can cause recovery software to show a different, empty wallet. Casa's Sovereign Recovery instructions cover this for Casa vaults.
• Two keys in one place. A fire, a flood, or a single break-in shouldn't reach two keys at once, which is why Casa recommends never storing two hardware devices in the same location.
• Every key from one manufacturer. A flaw or a tampered batch at one vendor can then reach the whole vault, which is why Casa spreads keys across vendors.
• Never testing recovery. Test your recovery process with a small balance before relying on it for larger holdings. Separately, verify receive addresses on hardware devices that support address verification.
• No plan for the people who come after you. If only you know how the vault works, it still depends on one person. Casa's advisors help bitcoiners plan inheritance alongside the vault.

Casa's guide to supply chain attacks goes deeper on the third mistake.

Coins attributed to Satoshi, which the analytics firm Arkham estimates at 1,096,354 BTC, have largely remained unspent. Their onchain history does not establish who has held the keys.

Eighteen years after the whitepaper, bitcoin still lets people hold their own keys and send funds without a custodian's permission. Keeping that control requires a plan for lost keys, compromised devices, and recovery. Happy eighteenth birthday to the Bitcoin whitepaper.

To review the weak points in your own setup, take Casa's Durability Test.

Bitcoin whitepaper FAQ

What is the Bitcoin whitepaper?

The Bitcoin whitepaper is the nine-page paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System." It describes a payment system "based on cryptographic proof instead of trust," so two people can send money directly without a bank in between.

When was the Bitcoin whitepaper published?

Satoshi Nakamoto shared it on October 31, 2008, in an email to a cryptography mailing list. The Bitcoin network launched on January 3, 2009, with the genesis block.

Who wrote the Bitcoin whitepaper?

The paper is signed by Satoshi Nakamoto, a pseudonym. The author's identity is still unknown, and the coins attributed to Satoshi, an estimated 1,096,354 BTC according to Arkham, have largely remained unspent.

What did Satoshi mean by a "trusted third party"?

A trusted third party is an institution, like a bank or payment processor, that both sides of a payment rely on to keep the record honest. The whitepaper replaces that role with a public chain of blocks that anyone can check.

Is owning a bitcoin ETF the same as holding your own bitcoin?

A bitcoin ETF share is a claim on a fund, and the fund's custodian holds the keys to the bitcoin. In self-custody, you hold the keys, so you can check your balance onchain and move your bitcoin without asking anyone.

What is a multisig wallet?

A multisig wallet needs more than one key to send bitcoin. In a 3-key vault, any two of three keys can sign, so the loss or theft of one key alone does not give someone access to your funds or prevent recovery with the other two.

Can Casa move my bitcoin?

No. The Casa Key alone cannot authorize a transaction. You hold the other two keys in a 3-key vault. Through Sovereign Recovery, you can move your funds with open-source software and no Casa software at all.