Tom Hoznik of Unchained Capital Criticizes Bitwise’s Approach to Security in Spot Bitcoin ETF, Expresses Concern Over Multisig Protection Absence

Lack of Multisig Security at Bitwise Asset Management’s Bitcoin ETF Concerns Unchained Capital
Unchained Capital, a Bitcoin-focused financial services company, offers a range of services centered around Bitcoin, including secure custody, loans, and also provides multi-signature wallet services, allowing different parties to authorize transactions.
Enhanced Security with Multisig for Bitcoin Transactions
Multisignature refers to a digital signature scheme that requires multiple keys to authorize a cryptocurrency transaction, providing robust security.
Bitwise’s Spotlight on Transparency with BITB ETF
Bitwise took pride in disclosing wallet addresses in their Bitcoin Asset ETF to provide transparency.
Limited Security in Bitwise Bitcoin ETF
Unchained Capital’s Tom Hoznik argued that BITB’s lack of Multisig security is a significant oversight and may not provide the utmost security, given that the address begins with “1,” identifying it as a Pay to Public Key Hash (P2PKH) address used by single-signature (singlesig) wallets.

Choosing a Security Method for Bitcoin Wallets
Hoznik suggests that multisig addresses are crucial for protecting large Bitcoin balances and are more reliable and proven for secure Bitcoin transactions, compared to alternatives like Shamir’s Secret Sharing (SSS) and Multiparty Computation (MPS).
Ideal Security Measures for Bitcoin Wallets
Hoznik recommends that institutions like Bitwise use multisig as their foundational security method. They could also employ distributed key agents, each using SSS or MPC, for each key to further enhance security.