Swiss bank now does 3-of-5 multisig bitcoin loans but you only get 1 key

[X-ray]

Honestly what's the point of 3-of-5 multisig with only 1 key, you can do nothing and it's the same as having read only wallet, you're a passive observer.

Since you're putting your bitcoin as a collateral to borrow money it's not really wrong to let them get control over your Bitcoin, but wouldn't it be more simpler to let the bitcoin in their custody and let them tell you the address because it would achieve basically the same thing?

Sounds like buzzword to me unless other keys holder are from independent companies not in cahoot and serve as countermeasure against insider job but they decided not to be transparent about it, so you could never know.

[Nheer]

A 3-of-5 multisig where you only hold one key isn't a multisig for you, it's a multisig for them.

Also, 65% LTV is incredibly aggressive for Bitcoin. A single nasty weekend wick could easily trigger a margin call, and by the time you wake up and check your email, those three anonymous keys will have already signed away your stack.

I agree, this setup is definitely more of a  Multisig for them than it is for you. A 3 of 5 Multisig wallet where you hold only 1 key is concerning because you practically don't have control of the wallet and can't authorize a transaction on your own, and what's more bothersome is that the other key holders can potentially move the funds without your involvement if three of them collaborate. And the fact that the other key holders are undisclosed makes it more concerning, though it doesn't mean they'll try to move your funds without your knowledge but the risk is there since you don't have full control of the wallet. Maybe it was made this way to protect the lenders.

What worries me most is people taking such high risk and still giving up control over their Bitcoin. I mean, you're already exposed to risk of price crash.

[Faisal2202]

That said, its pretty ridiculous to call that a multi-sig when your own key is mostly irrelevant in terms of securing your own assets.  It is pretty much just institutional marketing fluff.  At the end of the day, three third parties you never heard of can sign off and liquidate you whenever they want.  You are still basically trusting a custodian with extra steps... No chance.

Haha, that's what I was thinking. They made it clear in a way that suggests they are doing something unique haha, while there is nothing out of the ordinary here. Everything is as it is with other banks or platforms. We should not take baits like this and think we have financial freedom with Bitcoin. We don't own the funds unless we own the keys, but this slogan is losing its value due to the high number of hacks.

Like today, Electrum also released updates saying they have patched some vulnerabilities. So, at this point, every Bitcoiner is being attacked either by offers from banks or by attacks from hackers and scammers.

[Webutxo]

Honestly what's the point of 3-of-5 multisig with only 1 key, you can do nothing and it's the same as having read only wallet, you're a passive observer.

Since you're putting your bitcoin as a collateral to borrow money it's not really wrong to let them get control over your Bitcoin, but wouldn't it be more simpler to let the bitcoin in their custody and let them tell you the address because it would achieve basically the same thing?

Sounds like buzzword to me unless other keys holder are from independent companies not in cahoot and serve as countermeasure against insider job but they decided not to be transparent about it, so you could never know.

If they are going to create 5 keys, 3 will be needed to spend the coins and give one to the customer, then it's pointless because they are going to secretly control 4 from that 5 and with him or without him the banks will be able to spend the Bitcoin. The advantage of multisig here is defeated but it's understandable since the banks are very know to be centralized financially institution, they put their first before they consider an outsider, they make sure nothing harm their business.

It's left to the lenders that want to use Bitcoin to borrow money from the banks. I don't think this is useful and has any advantages but I just feel there are people out there that will use this service with or without the keys to them. After all, we use banks for non crypto transactions right and it doesn't disrupt our Bitcoin. This might just be another angle of adoption, just that I don't trust banks enough.

[hosemary]

If they are going to create 5 keys, 3 will be needed to spend the coins and give one to the customer, then it's pointless because they are going to secretly control 4 from that 5 and with him or without him the banks will be able to spend the Bitcoin.

They said the keys will be distributed among the borrower, the bank and independent institutional keyholders which means that the bank won't have the enough number of keys to sign transactions independently.
Assuming three of the keys will be owned by three independent institutional keyholders, the bank will need the transaction to be signed by at least two of those key holders.