Thank you for your feedback regarding Custodial Identities. I will address it to the mailing list for transparency.

Think of it as a 1-of-2 multisig edge case where Custodian Identities are actively managed by the Bitcoin Assigned Custodial Identities Authority/Regional Bitcoin Custodial Identity Registries. Once the optional identity layer is integrated, there are so many applications beyond dispute resolution, if you could effortlessly inject Custodian Identities into the blockchain itself as easily as providing 1-of-2 public keys.

Bitcoin Custodial Identities can be applied to coinbase transactions as well, in any or all jurisdictions, thus providing further incentive to keep nodes honest, or enabling a recovery mechanism in catastrophic failure events, such as a break in SHA-256. Custodians provide account addresses out of unused address space further alleviating address collisions as a psychological barrier to adoption. Custodial to non-custodial transactions could behave much like the UTXO of a coinbase transaction, which has the special condition that it cannot be spent (used as an input) for at least 100 blocks. It's based on open market competition, and there will probably always be users willing to live outside of the BCI address space.


>>On Tue, Aug 19, 2014 at 10:23 PM, 21E14 <21xe14@gmail.com> wrote:
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>>As suggested before submitting a BIP, I am sending this to the mailing list.
>>
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>>Bitcoin is often described as “the currency of the Internet”, “the TCP/IP of money”, or simply “the Internet of Money”. What is needed is an optional identity layer — a Bitcoin Assigned Custodial Identities >>Authority, much like the Internet Assigned Numbers Authority, to oversee global Custodial Identity allocation. Such an authority delegates Custodial Identity Spaces to Regional Bitcoin Custodial Identity >>Registries, much like the RIRs (Regional Internet Registries) managing the allocation of Internet number resources.
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>>A Bitcoin Custodial Identity (BCI) account address would consist of a Custodial Identifier allocated by the BACIA/RBCIRs (much like a bank’s routing number), and an account address (much like an account >>number). Bitcoin Custodial Identities allow dispute resolution in the legal system for transactions in the BCI address space. Free market would drive and determine the demand for custodial accounts. P2PKH >>users not affected.
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>>Feedback is appreciated.