Bitcoin, A decentralized store of value

The blockchain and crypto-asset ecosystem have developed and evolved significantly since Bitcoin's creation in 2009. Since then, many innovations have come to the market which seeks to bring crypto and blockchain adoption to the forefront of tech innovation. One major problem that still plagues the space, the securely storing, transacting, and accessing of private keys and making the technology usable for everyone.

Becoming your own bank

The idea of becoming "Self-Sovereign" with your wealth was a major component of Bitcoin's whitepaper. The idea of a peer-to-peer digital and decentralized network would allow anybody to be able to transact, trade, barter outside of the "broken financial system” according to Satoshi Nakamoto, author of the Bitcoin whitepaper. While this point is still heavily published as the main feature and reason for crypto throughout social media by most crypto enthusiasts, being your own bank isn't for everyone.

High risk requires high security

"Being your own bank" is a high-risk venture. Securing your wealth is not an easy task when it comes to being solely responsible for your digital wealth. The digital aspect alone is daunting for even the most seasoned crypto-asset investor.  First, create a wallet with a 24-word seed key, and don’t forget it.  Next, transfer all your assets to your new wallet and then securely store them.  Lastly, physical security, where do you store the key? Where do you store the recovery key? If you write it down you must be sure to keep this backup key secured from prying eyes.  Some investors will hold these keys at their house, on a secure USB device, in a safe, or hidden in a desk but most often will opt for storing them in a safety deposit box in... a bank. The idea of being your own bank is great for some, but it's not for everyone.

Institutions need custodians

Institutional requirements with any asset class always require secure custody offered and administered by a 3rd-party custodian. These 3rd-parties will come with many protections for the investors such as regular audits, regulatory oversight, and importantly, insurance. For these investors, either they are not ready to become their own bank, don't wish to be, or legally are unable to. Custody providers for digital assets are forming an important and valuable part of the crypto ecosystem by providing a secure, regulated, and easy way to gain access to the crypto-asset space. Custodians of traditional financial assets are capitalizing on this opportunity by offering not only custody but also: trading, lending, and interest-earning on crypto to their existing client base to expand their offerings.

Trusted crypto-custody

A crypto-custody service works just like a normal crypto wallet that supports both deposits and withdrawals that you would experience with any other crypto-exchange or mobile wallet. All custodians offer a high-security solution for storing and holding crypto-assets and most importantly hold insurance policies against theft or loss. Most custody solutions charge a fee for using their services, either a monthly retainer or a percentage based on funds under management.  Traditionally, most of these services were reserved for Institutions and high net worth individuals as the cost of custody assets in traditional markets is a high-volume, low margin exercise. With crypto-assets however, the same technology can be expanded to include all market participants at a fraction of the cost through the use of blockchain technology and bank-grade encryption methods.

Insured crypto-assets = Peace of Mind

One of the most important things that crypto-asset custody includes is top-level extendable insurance on assets under management. Custodians offering insured solutions for crypto-assets give the investor a way to store their assets in a much more secure way than they could do themselves, but also offer peace of mind their assets are protected against theft or malicious loss.  How can regular investors benefit from all of the positives that custodians offer, without having to learn all the jargon, do separate onboarding processes, and pay all the fees?
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A crypto-custody service works just like a normal crypto wallet that supports both deposits and withdrawals that you would experience with any other crypto-exchange or mobile wallet. All custodians offer a high-security solution for storing and holding crypto-assets and most importantly hold insurance policies against theft or loss. Most custody solutions charge a fee for using their services, either a monthly retainer or a percentage based on funds under management.

Traditionally, most of these services were reserved for Institutions and high net worth individuals as the cost of custody assets in traditional markets is a high-volume, low margin exercise. With crypto-assets however, the same technology can be expanded to include all market participants at a fraction of the cost through the use of blockchain technology and bank-grade encryption methods.