- Blockstream launched an institutional Bitcoin custody system with Thales.
- The design keeps the full signing process inside Thales security hardware.
- Adam Back said offline cold storage can lower cyber risk for institutions.
Blockstream has introduced a new institutional Bitcoin custody system developed with French technology group Thales, while CEO Adam Back argues that simpler and more offline setups are better suited to protect assets from cyber threats. The Bitcoin custody launch combines Thales hardware security modules with Blockstream’s Secure-MPC technology. According to the company, institutions can authorize transactions while sensitive cryptographic operations stay inside dedicated security hardware. Back said current risks, including unauthorized access to internet-connected systems and the possibility that AI tools could help attackers find implementation flaws, strengthen the case for cold storage and less complex security designs.
Bitcoin custody system built with Thales
The new Bitcoin custody product was announced Friday by Blockstream, the Bitcoin infrastructure company co-founded by Adam Back. It was developed with Thales and is aimed at institutional digital asset custody. Blockstream said the system combines Thales hardware security modules, or HSMs, with its Secure-MPC technology.
In Blockstream’s description, the setup allows institutions to approve transactions while keeping sensitive cryptographic activity inside dedicated hardware. That structure is central to the company’s Bitcoin custody pitch, which focuses on limiting exposure by using protected hardware for critical operations.
How the Bitcoin custody design handles signing
Blockstream said its Bitcoin custody architecture runs the entire signing protocol inside the protected environment of Thales’ HSMs. The company contrasted that with more conventional MPC approaches that may carry out part of the signing process outside dedicated security hardware.
Back told Cointelegraph that many MPC protocols are highly complex and require extensive communication between devices. He argued that this makes them difficult to use in a fully offline cold storage setting, which in his view is an important part of reducing cyber risk in Bitcoin custody.
Adam Back Advocates Simpler Offline Security Measures
Back pointed to the Binance $6.3 billion hack as an example of the risks facing connected custody infrastructure. According to Binance’s investigation, attackers compromised employee devices and obtained credentials that gave them access to the exchange’s wallet-signing infrastructure.
He said that once equipment is connected to the internet, even behind firewalls, there remains a risk of unauthorized access. In his view, hackers can penetrate networks or obtain logins they should not have, which supports the case for a Bitcoin custody model built around offline signing devices.
AI risks for Bitcoin custody models
Back also said AI could make existing security challenges harder to manage. He warned that attackers may use AI tools to identify subtle implementation errors in complex MPC systems, including issues that may not be obvious during normal review.
Asked whether the wider industry might adopt similar approaches, Back said he hoped institutions would adapt by moving assets into cold storage. He argued that complexity works against security and that a simpler Bitcoin custody approach based on offline storage is better suited to the current threat environment.
Conclusion
Blockstream’s new Bitcoin custody system centers on keeping the signing process inside dedicated Thales hardware while still allowing institutional transaction authorization. The company said the full protocol runs within the HSM environment rather than partly outside protected hardware, which it sees as an important security distinction. Adam Back used the launch to argue for a broader shift toward simpler, offline protection as cyberattacks grow more sophisticated and AI may help attackers uncover hidden flaws. Based on the company’s description and Back’s comments, this Bitcoin custody approach reflects a preference for cold storage, reduced complexity, and less exposure to internet-connected systems.
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