Live Transaction How It Works
Confidential · For Brian Estes

Six objections to BitBonds. Six answers. One infrastructure.

"Too volatile."

Upside only. Full principal protection. 1% allocation.

ADDRESSED
"Tax law won't allow it."

Federal Treasury, not municipal. Lummis Act. White House addressed.

ADDRESSED
"How do you convert BTC to bond payments?"

Custodian sells at maturity. Same as gold/oil-linked bonds. FedNow ready.

ADDRESSED
"Bond buyers won't trust Bitcoin custody."

Right objection. No cryptographic proof of reserves exists today.

This Is Where H33 Enters
"There's no framework to verify custody or transfer Bitcoin to bondholders."
"What's still missing is the proper framework to ensure the smooth transfer of Bitcoin to bondholders when the bond matures."
— BeInCrypto

H33-74 is that framework.

"A 10-year bond must survive quantum computers."
Addressed — Operational Today

The Trust Gap Today

Every existing bond custody system has the same structural flaw.

Bond Created
plaintext in memory
→
Copied to DB
plaintext at rest
→
Encrypted Later
gap: already exposed
→
Signed After
proves nothing about origin
PROBLEM 1

Data was plaintext before it was signed. The signature proves the data exists — not that it wasn't seen, copied, or altered before signing.

PROBLEM 2

No provenance from creation. There's no proof of where the data originated. Anyone with access could have injected or modified it before the first signature.

PROBLEM 3

Verification = data access. To verify custody, you must decrypt and inspect. Everyone who checks gets a copy. More checks = more exposure.

This is why bond buyers don't trust Bitcoin custody. The proof architecture doesn't exist. Until now.

H33-74: Proof Starts at Creation

H33-74 establishes trust at the moment data is created — not bolted on after. Each bond event produces a canonical record that is signed, compressed into a verifiable receipt, and anchored to Bitcoin.

H33-74: Sealed
fingerprint + encrypt
in one boundary
→
H33-74: Dual Output
FHE ciphertext (compute)
encrypted fingerprint (verify)
→
H33-74: PQ Signed
3 PQ families at creation
provenance bound
→
H33-74: 74B Receipt
Bitcoin-anchored
before anything else happens
FIX 1: NEVER PLAINTEXT

Data is encrypted inside the generation boundary. Raw data never crosses the boundary. There is no plaintext window to exploit — not for a millisecond.

FIX 2: PROVENANCE AT BIRTH

Origin is cryptographically committed before any processing, transmission, or storage. The provenance chain is unbreakable from creation through the full 30-year lifecycle.

FIX 3: VERIFY ≠ ACCESS

Independent key hierarchies separate compute from verify. Auditors verify custody without accessing bond data. More verification = zero additional exposure.

The proof exists before the bond does. Every subsequent event — custody check, authorization, dispute, transfer — extends the chain. Never breaks it.

How H33-74 Wraps a Bond

The bond enters one boundary. Two encrypted outputs exit. Raw data never leaves.

HARDWARE-ATTESTED GENERATION BOUNDARY — NOTHING PLAINTEXT EXITS
Bond Data
CUSIP · allocation · terms · address
→
enters boundary as plaintext — last time it will ever be plaintext
OPERATION 1: FHE ENCRYPT
KEY A
Bond data encrypted under BFV fully homomorphic encryption. This ciphertext enables computation — custody checks, balance verification, threshold comparison — all on encrypted data.
OUTPUT: Ciphertext C for compute
OPERATION 2: QUANTUM TAG
KEY B
Fingerprint F(d) computed, then encrypted under independent PQ key (ML-KEM / Kyber + AES-256-GCM). This tag enables verification — custody proof, identity check, integrity audit — without accessing bond data.
OUTPUT: Encrypted Fingerprint E_F for verify
KEY SEPARATION
Key A cannot derive Key B. Key B cannot derive Key A. Operators who compute on the bond cannot inspect the verification tag. Verifiers who check custody cannot access bond data.
↓
FHE Ciphertext C
bond stays encrypted forever
+
Quantum Tag E_F
metadata access without decryption
+
3-Family PQ Signatures
ML-DSA + FALCON + SLH-DSA
=
74 bytes
persistent footprint

The bond is fully covered by FHE for its entire 30-year life. The quantum tag lets anyone verify custody, authorization, and integrity — without ever touching the encrypted bond. Patent pending.

How It Works

From bond data to Bitcoin anchor — every layer

OFF-CHAIN
ON-CHAIN
Bond Data
CUSIP · face value · allocation · maturity date
INPUT
↓
Claims & Authorization
VERIFIED
ACTION_AUTHORIZED CUSTODIAN_APPROVED LIMIT_WITHIN_BOUND SIGNATORY_VALID
↓
FHE Encryption
Data encrypted — never decrypted at any step
BFV
↓
H33-74 Primitive Minted
58 BYTES
type
1B domain
1B SHA3-256 hash
32B timestamp
8B nonce
16B
↓
3-Family PQ Signing
ML-DSA-65
FALCON-512
SLH-DSA-SHA2-128f
~21KB bundle · off-chain
Compact Receipt
version + flags
verify digest
timestamp
42 bytes · Cachee
↓
₿ Bitcoin Mainnet
Taproot key-path tweak — standard Bitcoin transaction
32 bytes
permanent · immutable

32 on-chain + 42 off-chain = 74 bytes. The persistent verification footprint. Full evidence bundle (~21KB) retrievable by hash.

Day One

ACTOR: TREASURY / ISSUER

Treasury allocates 1% ($1B in BTC)
↓
H33-74 commits: amount + address + timestamp
↓
32 bytes anchored to Bitcoin mainnet

Standard Taproot transaction. No protocol changes required.

Years 1–30

ACTOR: CUSTODIAN · AUDITOR / VERIFIER

CUSTODIAN_APPROVED
Verified at each checkpoint
LIMIT_WITHIN_BOUND
Allocation within policy
CHAIN_OF_CUSTODY
Every movement attested

30 annual attestations → one Merkle root → one hash. Unbroken custody.

Year 30: Redemption

ACTOR: BONDHOLDER · PAYING AGENT

PROVES
Valid CUSIP
Valid holder
Maturity reached
Not redeemed
Not disputed
REVEALS
Nothing beyond what the paying agent requires.

The paying agent learns eligibility, then pays according to bond terms — without learning unnecessary portfolio or identity detail. Zero-knowledge proof. No phone call. Mathematical proof.

The Full Lifecycle

Each step produces a 74-byte proof: 32 bytes anchored on Bitcoin, 42 bytes stored off-chain.

ON-CHAIN — BITCOIN MAINNET — 32 BYTES PER EVENT
Issuance
CUSIP + BTC amount
32 bytes
Custody
address + balance
32 bytes
Annual ×30
balance + prior hash
32 bytes each
Maturity
redemption value
32 bytes
Settlement
transfer confirm
32 bytes
Taproot key-path tweak — standard Bitcoin transaction Each node: 32 on-chain + 42 off-chain = 74 bytes
OFF-CHAIN — CACHEE RECEIPT STORE — 42 BYTES PER EVENT
Receipt + 3 PQ sigs
ML-DSA + FALCON + SLH-DSA
~21KB sig bundle
retrievable by receipt hash
Algorithm flags
enables family rotation
Verifiable without H33
open-source verifier

30 years. One Merkle root. One Bitcoin transaction. Unbroken custody proof. Trust no one.

Brian put BitBonds in the public domain
for the United States.

H33 provides the missing verification layer
as an open contribution. Same spirit.

Not a vendor.
The infrastructure that makes it verifiable.

Before You Ask

"74 BYTES SOUNDS TOO SMALL"

74 is the persistent footprint — 32 on-chain, 42 receipt. The full signature bundle (~21KB) lives off-chain, retrievable by hash. 74 bytes is enough to verify. Not enough to reconstruct.

"WHAT IF A SIGNATURE FAMILY BREAKS?"

Algorithm flags byte allows rotation. Flip one bit — disable the broken family. Remaining two provide protection during migration. No reissuance. No downtime.

"WHO HOLDS THE KEYS FOR 30 YEARS?"

Key rotation is supported — re-sign under new keys without breaking the attestation chain. Each rotation is itself attested. The custody chain is self-describing.

"WHAT IF H33 DISAPPEARS?"

The 32 bytes on Bitcoin are permanent regardless. The verifier crate is open source (Apache 2.0). Anyone can verify without H33. The proof outlives the company.

"HOW DOES ZK REDEMPTION WORK?"

ZK-STARK proves “I hold a valid CUSIP, maturity reached, not redeemed” without revealing identity, position size, or portfolio. Paying agent gets a boolean: eligible or not.

"WHY BITCOIN AND NOT A DATABASE?"

Bitcoin provides immutable timestamping under 15 years of adversarial testing. A database can be altered. Bitcoin can’t. The bond outlives any single institution.

The Cryptographic Layer BitBonds Were Waiting For.

BitBonds become auditable across issuance, custody, and redemption — without trusting a database, a custodian, or H33 itself.

Eric Beans · CEO · H33.ai, Inc.

eb@h33.ai

Patent Pending #19/645,499

Verified on Bitcoin mainnet: 7f8d9e...b028b4a7

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