---
title: Vaulted Bitcoin custody, covenants and vaults
description: In this article, we describe Bitcoin transactions, restricted transactions called Covenants, and our own research into secure Bitcoin custody using a type of Covenant called Vaults.
---

[Trends & Signals ](https://www.fcatalyst.com/trends-and-signals)

# [Vaulted Bitcoin custody, covenants and vaults](https://www.fcatalyst.com/trends-and-signals/blog/sept2020/vaulted_bitcoin_custody)

 Written by [Sam Abbassi](https://www.fcatalyst.com/trends-and-signals/author/sam-abbassi) | Sep 29, 2020 4:00:00 AM

**In this article, we describe Bitcoin transactions, restricted transactions called Covenants, and our own research into secure Bitcoin custody using a type of Covenant called Vaults.**

Custody sits core to digital asset infrastructure and is dictated by key management. Keys are what generate signatures that can spend bitcoins, and thus, key management determines [how digital assets are held and secured](https://www.coincenter.org/the-occ-has-formally-stated-that-nationally-chartered-banks-can-hold-cryptocurrencies-for-their-customers/). The problem the FCAT team tried to solve was the access, incentives and corresponding attack surfaces that are presented when keys, or a set of keys, are compromised. In that, attackers can arbitrarily spend bitcoins custodied by those compromised keys at will.

The team presents a Vault custody protocol that uses pre-signed transactions, a relative timelock, and a key-deletion method to activate Covenants. [Read More](https://medium.com/fcats-blockchain-incubator/vaulted-bitcoin-custody-d10824b27141?utm_source=Medium&utm_medium=Observations%20-%20VBC&utm_campaign=Social%20Media) on our Medium page.

   

 References & Disclaimers

 946392.1.0

[View full post](https://www.fcatalyst.com/trends-and-signals/blog/sept2020/vaulted_bitcoin_custody)

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