Based on the construction of the multisig we never have custody over the Bitcion, even if we store the encrypted key (we don't).
> If the funds can be lost through loss of user keys, then this offers little practical advantage over bill-less bitcoin
There are several; easy key diversification across multiple wallets. Easy offline storage away from connected devices. Easy onboarding.
It would be possible to backup the user keys on the notes independent of the note, we just believe that having them function more like cash guides the user to make choices where they are far less likely to lose them -- e.g. storing in a fireproof safe, safety deposit box, etc.
> If the issuer can always sign unilaterally
Based on the construction of the multisig we never have custody over the Bitcion, even if we store the encrypted key (we don't).
> If the funds can be lost through loss of user keys, then this offers little practical advantage over bill-less bitcoin
There are several; easy key diversification across multiple wallets. Easy offline storage away from connected devices. Easy onboarding.
It would be possible to backup the user keys on the notes independent of the note, we just believe that having them function more like cash guides the user to make choices where they are far less likely to lose them -- e.g. storing in a fireproof safe, safety deposit box, etc.