# Kagikai
> Peer-to-peer Bitcoin bearer instruments. Transfer bitcoin free and fast, online or fully offline. No central server. No channels. No fees. Self-custody always.

## What is Kagikai?

Kagikai is a Bitcoin application implementing Multisig Digital Bearer Instruments (MBI). It allows bitcoin UTXOs to be transferred between parties like physical cash: by handing over cryptographic keys, with no on-chain transaction, no fee, and no internet required at the point of transfer.

Only two on-chain transactions occur across an instrument's entire lifetime regardless of how many times it changes hands: one to fund, one to sweep.

## Core Protocol

Kagikai uses a 2-of-3 Taproot multisig scheme with a threshold inversion design:

- Key A: held by the issuer/creator, deleted before the instrument is funded. The creator is permanently locked out of spending.
- Key B and Key C: both held by the bearer. Together they meet the 2-of-3 spending threshold.
- Bitcoin consensus enforces the lockout. It is not policy; it is arithmetic.
- Keys B and C are aggregated via MuSig2 into a single Taproot keypair. On-chain settlement is a standard 64-byte Schnorr signature, indistinguishable from any ordinary Bitcoin payment (P2TR).

Transfer is key handover. Keys B and C are NaCl-sealed to the recipient's public key and delivered via QR code, NFC, HTTPS, or deep link. Transfer completes in under 5 seconds.

## Cryptographic Receipt

After receiving keys, the new bearer signs a nonce with Key B and publishes the proof to a Nostr relay. The sender verifies the proof and only then deletes their copy of the keys. The transfer is irreversible. No server or intermediary is involved.

## Offline Support

Kagikai works fully offline. Instruments transfer via QR code and verify against a locally cached bounded UTXO snapshot. Zero bytes of internet required at transfer time.

## Denominations

Instruments are created at fixed satoshi denominations (1-2-5 ladder):
1,000 / 2,000 / 5,000 / 10,000 / 20,000 / 50,000 / 100,000 / 200,000 sats

They do not make change. Bearers combine denominations to hit the target amount. Merchants maintain a change float.

## Hardware Security

- Android: Android Keystore (AES-256-GCM). StrongBox devices use Titan M2; keys are designed to never leave the chip.
- iOS: Secure Enclave; keys are generated and stored inside the enclave and are designed to be non-extractable under normal operating conditions.
- No cloud. No server. No custody.

## KMS: Kagikai Merchant Server

KMS is a self-hosted server for merchants to accept Kagikai instruments at point of sale. It runs on local hardware (laptop, mini PC, or VPS). No payment processor, no custody risk. The merchant key is AES-256-GCM encrypted at rest and only lives in memory while KMS is running.

## Status

Kagikai is currently in closed beta. A working proof-of-concept on Bitcoin Mainnet was demonstrated in March 2026:
- Batch issuance confirmed in block 297,032 on 2026-03-24
- Full peer-to-peer transfer including Nostr receipt, key deletion, and on-chain sweep confirmed in block 297,198 on 2026-03-26

Sign up for beta access at: https://kagikai.app

## Stack and Cryptography

- Bitcoin: P2TR (Taproot), MuSig2, Schnorr signatures
- Encryption: NaCl sealed-box (secp256k1 + ECDH), AES-256-GCM
- Receipt layer: Nostr public relay
- Key derivation: Standard HD wallet (BIP-32/39 seed phrase). Keys are recoverable with seed words.

## Transport Methods

- Online: HTTPS, QR code, NFC, deep link (MBI-PRP protocol)
- Offline: QR code + local bounded UTXO cache

## Comparison to Other Protocols

- vs Lightning: No channels, no liquidity, no routing fees, works offline. Trade-off: denominated amounts only, no arbitrary satoshi values.
- vs Ark: No server post-creation, truly offline, no VTXO expiry, zero trust model enforced by Bitcoin consensus. Trade-off: requires denomination ladder, no native change-making.

## Resources

- Website: https://kagikai.app
- Whitepaper: https://zenodo.org/records/19382670
- Research site: https://multisigbearer.org
- GitHub: https://github.com/multisigbearer
- Nostr: npub1l0gv34sntzlu4f63ltw4nw7yayxaac7a7g9263qrmuwvlknr2p2q664xt0
- X: https://x.com/kagikaiapp
- Contact: dev@kagikai.app

## Legal Note

Kagikai is a cryptographic protocol for transferring control of Bitcoin UTXOs. It is not a payment service, money transmission system, or financial product. Businesses integrating Kagikai instruments into commercial operations may have independent obligations under applicable AML, KYC, consumer protection, and payment services laws in their jurisdiction.