Multisig Bearer Instruments:
Non-Custodial Bitcoin Transfer

Abstract

A non-custodial threshold instrument for Bitcoin would allow value to transfer between parties without network connectivity, fees, or custodial dependency. We propose a system that inverts the key distribution of all prior multisignature schemes: the holder receives the two keys constituting the spending threshold of a 2-of-3 multisignature script, and the issuer holds one key arithmetically below it. The issuer's key is deleted before the instrument is funded. Transfer is key handover requiring no on-chain transaction, no network connection, and no fee. Only two on-chain transactions occur across the instrument's lifetime regardless of transfer count.